Increasingly, Artificial Intelligence (AI) is overtaking menial and repetitive work. In one it is a bit scary. Yet in another sense – it now leaves humans to concentrate on work that requires critical and higher level thinking. This isn’t just affecting the manufacturing industry. AI is now entering the world of the professions. And, the legal sector is not untouched by this new technology wave. But does that mean that A will replace lawyers? The answer is ‘No’. Rather, it is set to revolutionize the legal sector. Already there is software available that perform legal evaluations superior to those provided by humans. The only thing that AI lags is the sensitivity, creativity, and strategic initiative that a good lawyer takes.
AI and the promise of the numerous legal tech offerings are changing the legal sector. It is doing so by transforming how legal services are delivered to clients. The major guarantees of AI in the legal sector are amplified efficiency, reduced costs and improved accuracy. AI for lawyer is already changing the face of contract management. Further yet, it has the potential to truly disrupt and revolutionize the contract management process for many companies with commercial relationships. Signed agreements are the very fabric of an organization. For the first time in history, they are being digitized. Before this digitization, it was difficult to use contracts tactically. They were lengthy and full of intense legal text that had to be tracked, reviewed and managed by hand. Now, artificial Intelligence can not only be applied to accelerate the digitization of legacy contracts but it can also be used to analyze a contract’s language. This is done to fully overhaul contract management and capture additional value.
‘Keeping up’ in the contract management processes landscape is a bother for most companies. That’s true of big companies and small ones, too. Whether the contracts are with contractors or customers, standard or tailored, the terms, prices and renewal need to be examined continually. When a business has a large number of tailored contracts, accessing and being able to scrutinize each is important. Even more so, to be able to do this on a mouse click. Making it intuitive, and easy to use means your staff engages the system, and test out the advanced features, leading to a boost in revenue and diminished contract risks.
How is this done? The Natural Language Processing (NLP) ability of AI has led to software tools that mechanically extract and review the key terms of the existing contracts. This allows for an instant analysis and comprehensive overview of a company’s contract universe. Alone, this could take a legal operations team weeks of manual labor. The capacity to extract key terms, and metadata from contracts gives you that immediate analysis capability. Think of it as a contract’s first pass, that lets the general counsel immediately find critical terms that need to be renegotiated before renewal.
Not only does AI allow for management of historic contracts, but it also permits a sleeker and more mechanized process for standardizing recurring processes. Using out-of-the-box AI equipped contract management customer contracts can be created quickly with less need to trouble the general counsel’s office. It means shrinking a company’s legal spend. It also means taking some of the pressure off your already heavily taxed legal counsel team. All told that means trimming down contract churn by speeding up renewal processes and removing holdups.
A variety of AI are already regularly touted in marketing material, and the press. But, from a decision maker’s perspective you need to scrutinize these systems carefully. Are the systems using trained AI networks, or are they still in the machine learning stage (could cost you additional months of training time). Also, question the underlying AI technology. Is the system built on industry trusted and tested platforms like IBM’s Watson?
As better and more trusted systems work their way through the contract management landscape, contracting will improve with time. With the development of these tools, the time and cost of becoming involved in litigation will continue to decrease. Clients will have a better understanding of the risks and potential benefits of litigation from the start. Most importantly, there will be greater certainty in corporations about the contracts, what is in them, and the boundaries that might lead to disputes.
Today, AI already offers the option of freeing up a legal counsel’s time from the humdrum efforts of the past. This permits them to focus on high value, and more strategic work. Our current AI tools are able to search thousands of contracts in a matter of hours. This is largely unsupervised. As a result, the systems are now able to spot key commercial components anomalies, outliers, and changes to the contract over time.Rather than reviewing each contract from start to finish, AI tools make the job of the legal counsel, a little easier. Powerful AI tools now let the legal team scour the agreement universe to immediately find concerning clauses, and the notable boundaries of the agreement. Ultimately, this helps keep the office fo the general counsel focused on strategic issues, rather than the mundane.
AI will not do away with the need for legal advisers. Instead, it will let them offer companies the higher value of using their legal training to resolve the more challenging problems and legal issues .The power of AI in corporate transactions lies in allowing due diligence to be performed more swiftly, more economically and more accurately.
(The author Sarvarth Misra is Co-Founder & CEO, ContractPodAi, a contract management solutions company)