Everywhere these days, people seem to be talking about artificial intelligence (AI). But it’s more than just a technical jargon – AI can be harnessed to reduce contract delays, enhance collaboration, and turn Legal into an effective and strategic business partner for your business and the future.
When you think of the term artificial intelligence, what immediately comes to mind?
Are they the self checkout kiosks at the local supermarket? Ask Siri to “play old-fashioned hip-hop” while you’re making dinner? star WarsShiny gold protocol droid C-3PO proclaims to be fluent in more than six billion forms of communication — or a far more outrageous Hollywood vision, in which sentient machines rise up and threaten our survival, like HAL 9000 from “2001: A Space Odyssey”?
While each of these illustrates some aspect of AI — or intelligent automation, of which AI is a key component — the reality is that AI is not now, and likely never will be. AI will not destroy humanity as we know it. What AI can do, especially in the midst of a rapidly evolving business landscape, is serve as an essential tool to elevate connectivity, reduce costs, and enhance your organization’s competitive differentiation.
The birth and growth of artificial intelligence
A common buzzword of the 21st century, artificial intelligence was initially launched and named by mathematician and cryptanalyst Alan Turing in the 1950’s with the question, Can a machine imitate human intelligence?
Today, AI can refer to any machine, tool, or technology that is designed to act intelligently and mimic human actions and decision-making. While AI can make decisions, those decisions are mapped via complex machine learning (ML) algorithms that collect data patterns to evaluate correlations, predict behavior, and reach a predetermined outcome. Most of us were subject to ML testing. It’s what’s used to provide insights for things like “Movies We Think You’ll Like” on Amazon Prime and other streaming services. Another widely used commercial application is natural language processing (NLP), which is the software’s ability to recognize human speech patterns and determine output. “Intelligent” assistants like Siri and Alexa use NLP, splicing language into word trunks, parts of speech, and other linguistic features in order to respond. Chatbots who communicate on the company’s websites do the same, but in written text.
Over the past decade, AI has proliferated and emerged as an evolving phenomenon for retail, manufacturing, banking, and healthcare—and legal processes are no exception. More than 90% of new Contract Lifecycle Management (CLM) solutions include AI as a critical function as it can enhance operational efficiency and drive revenue generation in game-changing ways. For example, during the contract drafting phase, ML can propose, simplify, and organize the creation. NLP can be used to “catch” missing phrases or correct inaccurate terms in new or existing contracts. Both missile accuracy while reducing the time spent on compact – which is absolutely essential when 2022 Corporate Legal Reputation Report (ELR) He revealed that Legal can spend half their working days reviewing contracts and Sales and Purchases often spend the same amount 65% of their time is on administrative taskssuch as preparing documents.
Leverage the power of CLM using AI
Contract management isn’t just a legal issue – it’s an enterprise issue, inextricably intertwined with both revenue and relationships. As every function within a company requires contracts, leveraging next generation CLM proves a golden opportunity to impact and transform the business overall by:
Speed up contract cycles.
Artificial intelligence is shorthand for shortening contract management time, acting (and even thinking and reasoning) like a junior lawyer by reviewing contracts and Rework contracts, often in less than two minutes.
Slowing the speed of the contract review process can increase contract portfolio risk. AI-enabled CLM libraries can update and make actionable decisions backed by data – and when contract language is standardized and pre-approved and AI-powered playbooks are used, iCan speed up time to revenue generation by 24%. This time can then be used to focus on cultivating relationships with partners so that revenue is not left on the table.
Maximize productivity while reducing spending.
CLM plus AI intelligent automation significantly speeds up operations, primarily reducing operating costs. By automating the extraction of contract data, AI can remove large costs from large projects. Moreover, it can reduce the possibilities of human error.
Eliminating repetitive data entry is a simple and effective way to speed up CLM as well as amplify cross-functional collaboration by confirming correct data for each department. In fact, a study found that AI legal contract review software made new users 51.5% more productive and 34% more efficient. AI-assisted verification has also been shown to escalate contract data entry and field verification by 400%.
reduce overall risk.
CLM solutions infused with AI can significantly increase contract control by defining, calculating and assigning a degree of risk to each contract within your portfolio. This provides comprehensive visibility and transparency into an organization’s contracts, proactively identifying non-compliant contracts, checking for compliance, and reducing the odds of non-fulfillment of obligations resulting in penalties, fees, and fines. Up to 9% per year per contract and 15% additional revenue each year.
Exhilarating CLM – and business – forward
There is no doubt that AI is transforming digital transformation, driving organizational change, and revolutionizing the world as we know it. However, CLM+AI has proven to be much more than a buzzword.
There is hope in technology, and artificial intelligence is the core of innovation. Being at the forefront of their adoption and integration is sure to help you lead your organization into the future in pioneering ways.