Powered by
MOMENTUM
MEDIA
Luminance has released a report titled The State of Contract Intelligence, which highlights that the intelligence gap is not about what businesses possess but about how effectively they utilise it.
While contracts contain critical intelligence about obligations, pricing, renewals, concessions, and commercial decisions, the report noted that the knowledge remains fragmented across systems, documents, emails, and individuals.
Contract intelligence connects contract content, context, and history to assist companies in making better decisions, managing risk, and unlocking commercial value.
Key findings
The research from Luminance, which surveyed 538 senior legal executives, revealed a large gap between storing contracts and utilising the intelligence they contain.
Seventy-nine per cent of respondents were found to be unable to reliably explain the reasoning behind their commercial contract terms.
Research revealed that for 31 per cent of respondents, more than $1.3 billion in annual contract value is associated with contracts where the reasoning sits solely with individuals, in emails, or in personal files – one in 10 put that figure above $6.6 billion.
Only 20 per cent of respondents can immediately access why contract terms were agreed, while one in three people have missed or delayed a commercial decision because contract information was not accessible.
The cost of inaccessible intelligence
While legal teams have spent the past decade digitising contracts and investing in contract lifecycle management (CLM) systems to bring greater structure to how agreements are stored and managed, the report found that digitisation hasn’t solved the intelligence problem, with 24 per cent of respondents reporting that their organisation currently stores key information in email or personal files, while 30 per cent hold contracts across multiple systems.
Thirty-seven per cent of respondents said their organisation’s critical contract knowledge is dependent on the specific people who “happen to know about it”.
As a result, it can make contractual knowledge more difficult to retrieve, vulnerable to being lost, and dependent on individual memory rather than a shared source of intelligence.
The impact was found to be particularly visible among senior leaders, with CCOs reporting the highest levels of fragmentation, as 39 per cent hold contracts across multiple systems and 36 per cent need to conduct a manual search to find a single term, despite 45 per cent saying they have a platform.
Among general counsel, 46 per cent said that the reasoning behind a negotiation sits elsewhere or cannot be found.
Commenting on the findings, Luminance CEO Eleanor Lightbody emphasised the strategic risks of maintaining fragmented contractual knowledge.
“When the reasoning behind billion-dollar contract portfolios lives in inboxes or individual memory, that intelligence cannot compound,” Lightbody said.
“As access to powerful AI becomes widespread, differentiation will come from what an organisation knows: its data, history, workflows and the thousands of decisions it has made over time.”
Contract storage to contract intelligence
The report showed that contracts have always contained intelligence about how businesses operate; however, what has been missing is a practical way to activate that intelligence at an enterprise level.
That notion is changing with AI search and contract intelligence tools enabling users to retrieve contractual knowledge in context and make it available across the business; however, only 23 per cent of respondents currently use them.
The research revealed an enterprise in transition, with organisations digitising contracts and increasingly adopting AI, but contractual context is still fragmented.
AI continues to give organisations the capacity to analyse information at a scale and speed people are unable to achieve manually, with people bringing judgement, curiosity, and leadership needed to interpret that intelligence and decide what should occur next.
The power of contract intelligence connects the two.
