How AI Contract Management Software Maximizes the Capabilities of Technology
It is not the source of fun dinner-party conversations or the subject of best-selling novels (to our knowledge). Yet, legal technology – like artificial intelligence (AI) algorithms – is ideally suited for processing large amounts of data quickly and accurately. It is also a ‘must have’ when you need information stored and classified for a long time. In fact, it is your best bet if you have thousands of contracts to manage and a staff that has other important work to do.
For instance, if you have large volumes of contracts in various digital and physical formats, you may need to capture and maintain them in a fully indexed repository. Although you could hire a team of people to do so manually, it would cost more and take more time. And there are bound to be countless inefficiencies and frustrations.
BUILDING A BUSINESS CASE FOR CLM
Recent research from World Commerce and Contracting (formerly IACCM) found that the average company loses just over nine percent of its bottom line because of ineffective contract management. So, ask yourself if your business can justify these inefficiencies in the contract management processes – those that are likely carving out nearly a tenth of your hard-earned revenue.
AI in contract management platforms helps corporate lawyers to create, store, and review contracts. As stated above, AI in contract management platforms empowers corporate lawyers and business users to create, store, review, index, retrieve, analyze, negotiate, and approve contracts. However, upgrading to an AI-powered contract lifecycle management (CLM) platform is not an easy decision.
With this fully in mind, we gathered some data to accelerate your due diligence. The following opinions and views from legal professionals will help you see the value of adopting and implementing a reliable contract management solution.
WE SURVEYED ATTORNEYS ABOUT CONTRACT MANAGEMENT SYSTEMS
In ContractPodAi’s 2020 research paper, “Why Corporate Counsels Need to Digitally Change,” we interviewed 53 corporate in-house attorneys in Canada and the United States. We found that only 8 percent of respondents had fully digitized their contract management systems (CMS) and 61 percent felt automation is their best option to streamline their contract generation and management processes.
Still, 9 percent of survey respondents said they felt they should hire staff to oversee their existing CMS. This suggests they did not invest in an intelligent contract management solution – or their existing system is far too complex.
Nevertheless, nearly half of the corporate lawyers we interviewed said they plan to automate contract creation and review, and other processes. Some even said they will leverage standard contracts and templates for automation, while others said they will extend AI across the whole contract lifecycle.
After all, AI-powered contract management platforms help legal professionals, paralegals, and contract managers. And to create and maintain agreements and monitor legacy contracts.
PRIORITIZING THE FEATURES AND BENEFITS OF AI CONTRACT MANAGEMENT
The legal professionals who said they were exploring an AI-powered CMS had many common goals:
- Empower sales personnel to create their own standard contracts from templates
- Find contracts or language within contracts quickly with cognitive search
- Prompt contract managers to follow up on renewals or other key contract milestones through analytics and alerts
- Deploy intuitive interfaces that are easy-to-use
- Ensure compatibility with digital e-signatures
- Have the ability to manage third-party contracts
Interestingly, most survey respondents said they wanted a cloud-based application, which transforms physical contracts into digital, searchable documents. But the ability to search for and analyze all contract types is key, according to respondents.
LEGAL PROFESSIONALS HAVE SHORT FUSES FOR COMPLEX TECHNOLOGY
Ultimately, general counsels (GCs) and corporate lawyers will embrace legal technology that helps them work more efficiently and effectively. Executives are highly motivated to accelerate legal work, such as reviewing sales contracts or third-party agreements of strategic value. And a system capable of natural language processing – to help them find a contract or clause to expedite the creation of another – can be highly beneficial and lucrative then.
We shared just a few insights on contract automation and AI from legal professionals. But you can find many more nuggets of wisdom in our contract management usages and practices research paper.
Be sure to enrich your own research and download a copy from our website today!
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