The possibility of generating and modifying contracts instantly based on existing documents has had a profound impact on the legal sector in recent years. Indeed, artificial intelligence (AI) automates the entire contract review process in order to achieve perfect optimization and to remove the tedious and repetitive work that once took up the time of so many employees.
However, the legal field has been slow to take advantage of AI to deal with complex issues such as contract management. Despite its numerous advantages, legal teams have long hesitated to use it, for fear of losing control or losing quality. In this article, we return to this very promising new trend.
The gradual arrival of AI in the legal sector
Today, AI-driven contract management has advanced so much that past concerns have easily disappeared. AI is rapidly being adopted in all sectors of activity and is radically changing the daily life of corporate legal services.
Machine learning (ML) And the natural language processing (NLP) now imitate human processes and learn independently. AI-powered contract lifecycle management (CLM) tools are used to:
- Building standardized models to streamline the contract creation process;
- Analyzing the data to identify risks, costs, and anomalies, using NLP to determine the type of contract;
- Automatically send contracts specific to the competent legal bodies for review and, once approved, receive a notification that they are ready;
- Set reminders for contract expiration and renewal dates so you never forget them again;
- Automatically identify problem clauses in contracts to allow you to resolve any issues before you send them
Why is AI creating so much value in this sector?
A lot of research has shown that AI can outperform humans when reviewing contracts. She offers an advantageous option for all parties involved, creates value out of nothing, reduces headaches, and eliminates an incredible amount of system inefficiency.
AI for contract management is changing the world of contracts three main ways : by changing the tech stack that lawyers use for contracts, by changing the contracts themselves, and by amplifying the evolution of standards in the legal sector.
While contract management software has been a part of the legal ecosystem for years, it is generally extremely limited in the scope of its functions. AI-powered contract management goes further, allowing you to automate and streamline your processes.
AI-generated contracts are easier to read, set up, and modify. A single software can now track a billion contracts, analyzing them to extract important technical aspects and bookmarking important clauses and dates, freeing up valuable lawyers for higher value-added tasks.
Finally, one of the main benefits (even if somewhat predictable) of the proliferation of AI for contract management is the standardization of complicated contracts across the sector. AI contract management systems use algorithms to search large databases for contracts that were similar and modelled over the past few decades. This allows contracts to be standardized to a much greater extent than in the past.
Our advice for deploying your AI contract management solution
As you can see, AI is able to examine the terms of a confidentiality agreement to identify risks in a matter of seconds, with almost perfect precision. But it is not enough to entrust all your tedious tasks to him and hope for results. To take full advantage of AI for contract management, you will need to have a implementation plan clearly defined.
- Evaluate. Review your current contract management systems, whether manual or automated, and identify areas for improvement.
- Develop an implementation proposal. An AI contract management system will affect everyone in your business, from lawyers to accountants. Develop a proposal to get buy-in from your management and remember to include your internal business partners.
- Develop an implementation strategy. Setting clear goals is critical as your team moves to a new technology system, including for managing AI contracts. A clear strategy will help everyone adopt the new systems more easily.
- Choose a powerful software.
- Maintain your systems. Be sure to have a maintenance plan in place to keep your AI-based contract management system working at peak efficiency.
- Train your teams. Make sure everyone on your team knows how to use AI-based contracts in your new system. They need to feel comfortable with new contract enforcement processes. Your AI solution will work better if everyone is on the same page.
Finally, clearly define the scope of application to ensure that you are intentionally running your AI system optimally. So, make sure that knowledge about how to use the system is widely available to maximize the benefits you'll get after implementation.
