A significant part of a modern lawyer’s work depends on hours of sifting through paperwork, head-scratching, and more shots of black coffee. While we can’t really do much about the last two, there’s a lot that is already changing in contract lifecycle management with new and exciting software. Sometimes the solution is as easy as letting AI put the ‘act’ in the contract. In the past few years, AI has changed the Contract Management Software scenarios on various notes!
Here is how AI is gradually changing not just the way contracts are managed, but contract lifecycles at large.
Contracts formalize all agreements, exchange of resources, including money, and processes for organizations. Naturally, there is a large volume of contracts generated, and they are quite diverse: an NDA will be structurally different from a Purchase Agreement. Whether it is drafting contracts or reviewing them, storing or searching through them, a manual contract management system is inefficient and tedious.
Any basic contract management software should ideally automate the more mundane jobs described above. But AI based contract management opens up new opportunities for efficiency.
For instance, on a platform like SpotDraft, when a user uploads contracts in bulk, an intuitive AI automatically reads through all of them and based on recommendations from the user, highlights key contract details like - parties involved, effective date, jurisdiction, governing law, deal expiration date and more.
These key details then become the metadata for the uploaded contracts. Users can then fetch any contract by just using filters instead of manually scavenging through gigabytes of files. The process of discovering legacy contracts therefore dwindles into a seconds-long, crisp experience.
Minimizing time spent on the historical referencing of legacy contracts is only the tip of the iceberg. For contract lifecycles to be effectively shorter, neural networks need to have major bearings across all major touchpoints in the process.
And one of the most obviously time consuming processes in the equation is - creating contracts from scratch. A contemporary AI-led contract management software makes this better by adding a smart layer of drafting assistance to both check for errors and provide suggestions based on the type of contract, deal value, or other predefined criteria.
First, contract management vendors work with organizations to build a rule book from their existing guidelines. This is then used by the AI as a benchmark against which new contracts will be evaluated.
When a new contract is uploaded, two distinct backend services are run simultaneously:
The AI scours each nook and corner in a contract to identify undefined terms or cross-reference terms used across multiple instances in a contract. Any undefined term in a contract is instantaneously identified and highlighted for correction. Consistencies in references of repeat terms are also analyzed and any misrepresentation there is made visible.
The content within is also actively analyzed for errors ranging from - conflicts within the text to misspelt terms or even incorrect syntax. These are then flagged for redressal to the user.
All of this happens in real time and across the multiple edits made to the contract to minimize the need for a ‘second look’ to reduce risks.
Traditionally, once a contract is drafted, an in-house legal executive sends it for review via email to the counterparty. They then wait for the counterparty to send in their recommendation and update the contract draft. It usually takes a series of such back and forth until a contract is compliant for both the parties involved.
Because of the quantum of data shared, and because emails aren’t the best place to work on contracts together, it is easy to lose track of changes, entire files, sanity, and at worst key data.
While most contemporary contract management software accommodate track changes, very few provide the degree of granular control that is required to process sensitive data. With AI, track changes can be upgraded from maintaining a timeline of versions and editors to the microscopic understanding of what content changed and how it affects the overall contract.
Eventually AI can also add a layer of intelligence to the contract creation and collaboration process and analyze wait times, review trends, and monitor hold ups better.
Learn more about how Contract Lifecycle Management Software can help various teams across your organization here.
Giving contracts a ‘second brain’ does not only improve turnaround times or help minimize errors, it also helps improve quality of work within an organization’s legal, sales and business operations teams. And it does that instantaneously.
Quicker contract turnaround times directly impact customer onboarding and improve inbound consumer experience. AI-led data extraction can help teams stay on top of deal renewals, and can also provide actionable insights for teams to know what works for them. With a bevy of contracting superpowers, in-house legal teams can also break out of the back-office silos and contribute to the revenue stream.
If you want to witness what an AI-powered contract management solution can do for your organization, just leave your email ID with us here!