Contracting is a widespread activity, yet it is one that only a few businesses execute well. It’s been estimated that inefficient contracting costs businesses anywhere from 5% to 40% of the value of a deal, depending on the circumstances.
However, new technological advancements such as AI-based contact management solution is now assisting businesses in overcoming many of the contracting issues.
- How Implications of Artificial Intelligence are reshaping Small Businesses?
- Impact of Artificial Intelligence in the Education Sector
How AI is changing Contract Management
Data from contracts may be easily extracted with AI-based contract management solution, simplifying the process. Contracts can now be renewed more quickly, disagreements can be reduced, and higher contract volumes can be arranged. By 2024, the AI software market in the legal business is predicted to grow at a CAGR of over 28%. According to IBM Corporation, lawyers in North America saved roughly half the time spent reviewing trademark search results. AI has resulted in an overall rise in efficiency and production.
- Modified Tools
Due to pattern recognition based on how the document is produced, contract lifecycle management software that uses AI can recognize and classify different types of contracts and terms. Based on the clause content, each contract can be classified by kind. Documents can be scanned, with the data presented with the type of clauses and all key information highlighted for easy understanding. This can be accomplished by training AI software on a large number of contracts. AI can then sort through large amounts of contracts using firm-specific data and indicate the individual contracts that are required.
- Maintaining Consistency
Firms can use AI to keep their terms and use consistently across all of their contracts. If any information needs to be categorized as confidential, such software can ensure that it is preserved in each contract. There are times when contract variants are introduced, either by vendors or by the business itself. It’s tough to keep track of these differences, but AI can help by recording and standardizing them.
Risk analysis is a critical component of contracts that should be error-free. AI-assisted contract management software can swiftly analyze these risks, reducing the number of errors produced throughout the drafting and review process.
- Lesser Resources
Previously, lawyers had to be capable of drafting, negotiating, maintaining, and reviewing contracts. Firms encouraged lawyers to craft clever terms that suited the organization, requiring hours of work from lawyers and contracting specialists. However, AI allows both basic and sophisticated contracts to be easily formed to meet the needs of the system. As a result, instead of reading documents, lawyers can devote their time to delivering advice.
AI can be used to automatically write contracts based on the firm’s basic criteria. AI will evaluate the context of the request and create a contract with the necessary clauses using natural language processing.
Taylor is a freelance SEO copywriter and blogger. His areas of expertise include technology, pop culture, and marketing.