Artificial Intelligence is Transforming the Contract Management Process

Artificial Intelligence is Transforming the Contract Management Process
by Amulya Dutta

Inefficient contract management can cause firms to lose up to 40% of the value of a given deal, depending on the circumstances or challenges encountered. But, technological developments like artificial intelligence (AI) and machine learning (ML) are helping companies overcome many challenges related to contracting.

How are these revolutionary technologies helping the world of contract management? First, we will discuss the challenges associated with it.


The main challenge firms face with the process of contracting comes from the number of contracts of which they must keep track. Therefore, organizations often have difficulty organizing, managing, and updating their numerous contracts. Inefficient contract management can cause firms to lose 5-40% of value on a deal. Inefficient contract management can cause firms to lose 40% of value on a deal

Without a central database of contracts, there’s no efficient way to see how a specific topic is worded across different divisions. Or, how complex agreements have been written in the past.

It takes an enormous amount of people-power to create, edit, and finalize contracts. Also, to manage the facilitation and process of them all. In fact, over half of the legal professionals in one study pointed to administrative tasks of contracts as one of their biggest pain points.

Furthermore, inefficiencies related to traditional contract management can lead to several issues. This includes unauthorized access, missed deadlines, and compliance and regulation violations. Next, we will discuss how AI and ML can help address the challenges of contract management processes.


Harvard Business Review says the use of AI via a contract management solution “has the potential to improve how all firms contract – and it will do so in three ways: by changing the tools firms use to contract, influencing the content of contracts, and affecting the processes by which firms’ contract.”

The change, influence, and effect of a contract management software solution built on AI and utilizing ML can best be described in one word – consistency.


With one common tool for everyone in an organization to use, employees have a shared solution. Better yet a shared solution with a core set of rules and best practices built-in.

A CLM built on AI allows for designated access controls to make sure the right contracts are seen and approved by the proper people. This approval process can be as rigid as you want it to be.

A SET OF ‘EYES’ ON EVERY CONTRACT The capacity of a contract management solution built on AI is almost limitless

The capacity of a contract management solution built on AI is almost limitless. First, the solution retains the knowledge of hundreds of thousands of contracts. Then, it uses the information gleaned from each when reviewing new agreements. The capacity of a contract management solution built on AI is almost limitless.

In addition, it discerns the patterns from agreement to agreement. It then uses these assumptions to create, edit, and finalize future contracts. So, it becomes ‘the expert,’ eliminating any bias or arguments over who is the authority.


By removing the need for tribal knowledge in an organization, AI-powered CLM becomes the source for the efficient workflow of contracting. Also, without the need for employees to manage the process of the contract, time and money will be saved.

A clearly defined procedure for your contract management will consistently and accurately allow for the movement of the contract. So, when employees are freed from the administrative and repetitive tasks identified as pain points, they are able to focus on higher-value work.


The CLM system is designed to get smarter the more it is used. Artificial intelligence is the platform on which our CLM is built, here at ContractPodAi (the name of our company might have given that away). Machine learning is the training process used for this platform. Above all, ML is the reason why the solution can ingest hundreds of thousands of contracts from legacy systems and retain something from all of them.

Technology such as AI and ML allows us to meet the needs of the rapidly transforming legal industry. So, as the role of legal professions evolve, the need for tools such as an intelligent contract management solution becomes critical.

Do you have questions about the role AI and ML can play in transforming your contract management process? Contact us at ContractPodAi and we can help answer any questions you may have.

Amulya Dutta

 Amulya Dutta
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