February 8 by Eric Dreshfield
There is a lot of chatter and a plethora of shows and movies about AI and robots replacing human work. For certain jobs, that may very well be the case (e.g. self-checkout at the grocery store). But let’s face it, no matter how smart technology gets, there are certain jobs that require the human touch. In these cases, AI does not replace or displace humans, it merely enhances their ability to do their jobs, making them more efficient and freeing up time to focus on high-value tasks that drive the enterprise forward. As a result, more companies are using AI to solve real business issues like contact lifecycle management and commercial relationship management.
For example, take a look at the contract management space. Accurate contract management is critical to a business’ success, but today the review and import processes are costly, redundant, error-prone, inefficient, and mundane. Imagine the workload for the Legal team in an acquisition or merger – thousands of legacy or third party contracts must be reviewed and imported into the new system. Or perhaps there has been a change in the product or service that requires edits or changes to current contracts. In large enterprise businesses, this could mean hours, or even days, of sifting through contracts to manually search for and replace clauses or terms.
The Legal teams should be spending their time negotiating high value contracts, not mining through contract metadata. That’s where AI for contract management steps in. Imagine a world where AI can:
•Seamlessly identify, classify, and extract key terms and clauses: Easily surface contracts that contain specific or similar language so you can make necessary changes.
•Identify risks and obligations within a contract: Pull up a contract and immediately see verbiage tagged yellow or red for review.
•Recommend or swap terms from a pre-approved clause library: Quickly replace or swap out terms with language that has already been approved for use.
•Predict risk associated with new regulations and recommend renewal amendments: Identify terms or clauses that may cause risk and replace the language with recommended amendments that protect the business.
While AI enhances contract management processes, it’s important to remember that the technology is not 100% accurate. Human interaction is a critical and mandatory step to increasing the accuracy of machine learning. The more humans train AI with feedback, the more the technology learns, and the closer the experience inches to 100% accuracy.
This type of AI does not replace the human work needed to ensure accurate contract management. Instead, it tackles the mundane and often error-prone aspects of the contract management process, saving money and freeing up time for the Legal team to focus their attention where it’s needed most – building and negotiating tier one contracts for the business.