Legal Process Outsourcing
Revolutionising contract management with AI and automation
Studies show that 70% of businesses struggle to manage their contracts efficiently, yet only 5% implement automation. This causes expensive delays, manual approvals, cost of intermediaries, violation of compliances, and court battles. CEOs across the world are realising the need for efficient contract management and want to leverage Artificial Intelligence (AI) to reduce the processing and review time by up to 50%.
Automation of repetitive and low-value work in contract management allows your legal team to focus on projects that need human expertise and achieve faster contract lifecycles.
This article explains the role and benefits of AI in contract management automation.
How does AI work in contract management?
From contract drafting automation to flagging the risks during review, AI assists you in complete contract lifecycle management (CLM). Here are some of the levels at which you can leverage it:
AI contract drafting
Input the information into the AI system and explain the context and requirements to generate the draft in seconds. Set specific guardrails within the AI instruction to minimise the risk associated with the contract terms.
Writing the first draft of a complex contract can take weeks, but with AI, you can do this quickly and efficiently while keeping a strict check on the contents and parameters.
AI contract summary
Reading and digesting information within a contract can be overwhelming for the stakeholders. Use AI for quick contract abstraction and make it easy for everyone to understand. Depending on the cultural background, language expertise, and legal knowledge of the stakeholder, you can customise the length, tone, and nature of the AI contract summary.
AI contract review
Use an AI assistant to review the contract and identify the risks. You can ask the AI assistant to flag the legal risks even if you do not have detailed knowledge of the state or national law. The AI assistant will parse the contract and will flag the possible legal risks that should be a priority during negotiations.
This reduces the contract review time for the legal team and eases the work of the negotiation team.
Benefits and use cases of AI contract management
Medium and large-sized companies can use AI tools to scale and speed up advanced contract management. It empowers business and legal teams to create, review, store, index, retrieve, negotiate, and approve agreements across the organisation.
Contract search and insights
Search and review contracts at scale based on pre-defined parameters and metrics. Find the associated legal documents that use similar clauses and make bulk modifications, if necessary. Advanced AI-based contract management helps your legal team identify KPIs, insights, and deviations from the expected outcome.
Contract clause analysis
Identify the type of contract before mapping it into existing templates, and extract the necessary terms and conditions and metadata before you categorise, parse, and match. This keeps the clauses and terms in line with the business template. It manages workflows during drafting, review, and negotiation.
Compliance and risk assessment
Ensure the necessary obligations across different contract types and classify them into categories such as operational and financial. Identify and evaluate the regulations and compliances simultaneously, along with impact analysis and risk mitigation.
Manage large data sets
AI contract management systems use Natural Language Processing (NLP) to search and understand legal terms. This reduces the time taken with no misunderstandings. NLP makes the data impactful, given its ability to extract and analyse it in the right context. An AI-based contract management tool retains and learns from the knowledge of hundreds of contracts.
It uses this learning to identify patterns, review new agreements, and create, edit, and finalise new ones without human bias.
Reduce repetitive tasks
Studies show that it takes an average of 92 minutes to review one contract. This is a long time for medium and large companies that deal with hundreds of complex contracts. Humans can make errors in analysing dates, terms, and deadlines if a contract goes through multiple iterations with long working hours.
AI contract management system is your assistant that works 24x7 on repetitive tasks without getting exhausted. Your legal team can focus on tasks that require greater analysis of the business’s overall interests.
Translate insights into intelligence
Intelligence into the contracts can give valuable insights into scheduled contract renewals, reasons for non-renewals, time taken to secure each contract, a trail of reviewers and approvers, and the long-term legal implications.
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How can Infosys BPM help?
The contract lifecycle management software by Infosys BPM leverages AI in contract management to centralise the process, enforce compliance, improve efficiency, and manage risk.
Read more about the CLM software by Infosys BPM.