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Contract AI Changes the Game for Legal Professionals

  • Conga

The ultimate goal of applying contract AI software solutions to Contract Lifecycle Management (CLM) is to unburden legal teams of time-consuming, low-value, and repetitive tasks. Contract AI is empowers corporate legal teams to accomplish more work, in less time, while still protecting the organization and its customers.

As organizations that are behind the curve in terms of technology adoption continue to embrace digital transformation going into 2023, legal departments are becoming more integrated into the enterprise revenue cycle.

With that they’ll need technology solutions to automate repetitive, day-to-day tasks so they can train their focus on higher-value, more strategic initiatives that support profitability and not just operationally.

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Signing on the dotted line isn’t the final phase of a contract’s life cycle. Every contract as it approaches its end date may be amended, renewed, terminated, or let to expire. Ineffective contract lifecycle management loses money.

Management of where a contract is in the cycle, what information needs to be included, is time-consuming and possibly overwhelming if done manually.

In response to the contract management activities that legal teams are tasked with, organizations looking for a competitive advantage now turn to legal contract automation through machine learning and artificial intelligence to simplify contract operations, accelerate review and revenue cycles, and maximize the value of every individual contract.

More benefits in contract intelligence for legal teams

The contract process and lifecycle is now digitally managed. It helps legal teams filter, sort, review, and approve contracts more quickly. It enables them to set up pre-defined terminology and clause libraries to make contract creation and review simpler. Move away from administrative contract management tasks and focus on strategic, needle-moving initiatives for your organization.

What’s more, contract intelligence helps legal teams realize the full value of every contract by extracting unstructured text from commercial agreements and organizing it into structured data. This allows for full visibility into contracts so the business can confidently track obligations, manage opportunities, and mitigate risks.

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Major benefits of investing in contract AI for your legal teams:

Legal teams must keep track of contract autorenewals and other date-driven events. With contract AI, legal teams can stay on top of contracts by setting up automated alerts and notifications. These alerts can be sent before every date-driven event and allow legal teams to collect insights that help renegotiation before a renewal. What’s more, risk reports highlight potential liability exposure and questionable clauses that are present in contracts or within a clause library.

Ensure signoff on good deals and mitigate risk for the company with more visibility into every contract, during every stage of the contract lifecycle. As exposure to liability and risk increases, contract automation and AI for legal teams will support optimal management of obligations, opportunities, and risks.

Manual tasks take legal teams’ focus away from strategic initiatives that grow a company and profitability. Instead of finding, sorting, extracting, and updating contract information and data post-signature, manually, contract AI, frees up the legal team’s time so they can focus on the bigger picture. The slow, costly process of manual data entry and information seeking is solved with contract AI because these tasks are automated. This automation now easily provides contract managers with the information they need in seconds instead of hours or days.

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Contract AI Changes the Game for Legal Departments

The world of legal operations and the role of the legal team in the revenue process has changed quite a bit recently as Contract AI and contract lifecycle management tools gain popularity. CLM technology has become a staple of modern business practices and is projected to grow on average 11% per year through 2030.

The automated workflows and processes alleviate much of the manual data entry and paperwork legal teams had to contend with over the years. But in an era where time is money and when legal teams are now positioned to take on a new strategic role in the businesses, simple automation won’t be enough.

Contract intelligence is a next-generation approach to CLM that empowers sales, procurement, legal, and other teams across the organization to gain full visibility into past and present contracts to track obligations, mitigate risk, and maximize the value potential of contracts.

These solutions use AI and machine learning to extract unstructured text from commercial agreements and organize that information into the contract, so the data is structured and easier to analyze and manage. 

This automated and streamlined process allows legal teams to populate the right data, in the right contract which in turn eliminates the need for manual entry and multiple rounds of reviews and revisions.

Automated document management and generation software will help legal teams save time with contract creation

With the quick shift to remote and hybrid working environments due to the COVID-19 pandemic, organizations have had to figure out how to support remote contract management creation, management, and overall legal operations.

A critical activity in the contract process—mitigating risk and ensuring legal language is accurate–is not only extremely time-consuming, but it can be a huge headache for contract managers as clauses, terms, and conditions can vary depending on multiple different factors including region, engagement, and more.

What’s more, sales teams, under pressure to hit revenue targets, might include incentive language in a contract to help close a deal faster but might not comply with corporate policies or industry standards. And when the contract reaches legal review, the sales rep and their prospect will certainly be disappointed when any rogue clauses or promises to get nixed.  

Intelligent CLM solutions eliminate virtually all of this complexity, friction, and risk by automating contract drafting activities and populating each contract with pre-approved legal language. AI-powered contract solutions use a range of contract templates and generation wizards to enable sales, procurement, legal, and other teams to generate new legal documents—contracts, quotes, and more—with just a few clicks. 

With the introduction of clause libraries legal teams can assert more control over contract language, without having to be directly involved in every step of the contract negotiation. Plus, all these activities can be done in one centralized system, allowing for greater visibility for all teams involved.

A centralized and smart contract repository

Organizations that have cycled through different contract software—from simple, consumer-grade contract templates to robust, enterprise CLM solutions—frequently have legacy contracts saved as scanned PDFs in some type of digital document repository that still requires a level of manual organization and categorization. 

Legal and sales teams have only a hazy understanding at any given time of the many and varying contracts and obligations that exist in their environment.

Artificial intelligence empowers legal and sales teams to make more informed decisions when it comes to

1) Contract renewal pipeline
2) Up-sell or cross-selling opportunities
3) Existing and upcoming obligations
4) Accounts with termination clauses

Contract AI and machine learning can help overcome these challenges by centralizing contracts into a single solution where AI can help categorize the documents for easier reference and management.

The repository becomes the company’s single source of truth, replacing disparate storage systems that demand complex and time-consuming manual contract management tasks with intelligently automated ones and enabling more robust and accurate search queries.

The legal team’s and contract manager’s role in the contract lifecycle will continue to be critical

With the introduction of new, innovative technology aimed to reduce manual, administrative, and tedious work for contract managers, the legal team’s role in the organization might shift. However, legal operations are actually critical to digital transformation initiatives and business strategy more now than ever before.

Legal teams will be tasked with managing these digital solutions and ensuring that even with the robust automation, that contracts are still doing their job—protecting the company and mitigating risk–all while having the right clauses, terms, and conditions included for the deal.

Additionally, with the introduction of these solutions, the legal team can help define how the software can be used cross-functionally which will empower departments from all over the organization to work more closely and collaboratively.

With the implementation of in-house legal software that centralizes all contract activities and is fitted with automation, the legal team can now focus on more strategic, needle-moving projects that will bring the organization into the future.

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