It starts innocently enough. You buy 5 licenses for the legal team. The price per seat seems reasonable. But then, the VP of Sales asks, "Can my reps generate their own NDAs?"
This is the moment where the standard "Per-User" pricing model transforms from a predictable cost into a punishment for efficiency. In the world of Contract Lifecycle Management (CLM), the value of the software comes from adoption—getting business users to initiate requests inside the system rather than via email.
Yet, most legacy pricing models are designed to tax exactly this behavior.
The "Casual User" Paradox
Consider the usage profile of a typical organization:
- 5%Power Users (Legal Ops, GC)Live in the tool daily. Drafting, redlining, analyzing. High value per seat.
- 95%Casual Users (Sales, Procurement, HR)Log in once a month to request a contract or approve a renewal. Low individual utility, but high collective volume.
If your vendor charges $80/user/month for everyone, you are effectively paying $960 a year for a Sales Director to click a "Request NDA" button four times. That’s $240 per click.
This economic absurdity forces Legal Ops teams into a corner: they restrict access to save money, forcing business users back to email and spreadsheets. The tool remains a silo for lawyers, and the organization loses the "single source of truth" benefit that justified the purchase in the first place.
Visualizing the "Expansion Trap"
The chart below illustrates the crossover point where per-seat pricing becomes unsustainable compared to platform-fee models that allow unlimited light users.
The "Read-Only" License Trap
Some vendors will offer cheaper "Read-Only" or "Viewer" licenses. Be very careful here. You must define exactly what "Read-Only" means in their ecosystem.
Often, a "Viewer" cannot:
- Upload a third-party paper (even if they don't edit it).
- Approve a workflow step (even if it's just a button click).
- See the audit trail of a negotiation.
If a "Viewer" license prevents a stakeholder from participating in the approval chain, it is useless for workflow automation. You will inevitably be forced to upgrade them to a full paid seat just to let them click "Approve."
Better Models to Negotiate For
When evaluating CLM software cost structures, look for vendors who align their revenue with your value, not just your headcount.
1. The "Active User" Model
You provision 500 users, but only pay for the 50 who actually logged in this month. This de-risks the rollout and encourages broad deployment.
2. The "Requester" Tier
A specific, low-cost (or free) license type that can only fill out intake forms and view status, but cannot edit documents. This is the gold standard for enterprise adoption.
The Consultant's Takeaway: Never sign a contract based on your current user count. Model your costs based on the "Success State"—where every department uses the tool. If that future number bankrupts the ROI model, you are looking at the wrong vendor.