Routine to any negotiation, an exchange of contract is necessary to secure and protect parties agreeing to engage in any form of partnership rendering a good or service. These often-lengthy statements contain valuable information outlining what’s expected of each party and the repercussions for failing to fulfill any of the agreed-upon responsibilities. To ensure all are doing their due diligence, it’s of the utmost importance that contracts are reviewed thoroughly by a competent member of a legal team to ensure the legitimacy of the outlined information. However, with such tedious labor required to do just that, emerging software systems powered by artificial intelligence (AI) are being implemented by companies looking to streamline complex processes, improve productivity and reduce the risk of human error.
Working within such a fast-paced ecosystem allows little to no room for mistake or delay on contract review and approval. That’s why AI-powered systems are being used to provide lawyers and other in-house legal personnel invaluable support to relieve them of duties that would otherwise take hours to complete when conducting contract analysis.
Despite contracts remaining an integral part of nearly all legal business transactions, up until now few companies have implemented a system that delivers an efficient and error-free process. As a result, organizations are estimated to lose on average anywhere between 5% and 40% of deal value. However, the adoption of AI-powered software systems utilizing machine learning (ML), natural language processing (NLP) and other subsets of artificial intelligence is providing organizations with a major advantage in efficiently navigating this stage of the procurement process.
Accuracy that Saves Time and Money
Reviewing legal documents can, as expected, take hours of manual labor and still contain the risk of human error that could have severe legal consequences. In addition to the high cost associated with compensating the hundreds of billable hours required to review the most tedious of contracts, the time spent can delay internal operations, such as hiring or other in-house undertakings that rely on thorough review and approval of legal agreements. AI systems relieve companies of the excess time and money spent on processes that can be managed by state-of-the-art software programs that take just a fraction of the time and cost to complete.
Provide Database to Easily Store and Access Contracts
While reviewing and approving contracts is a time-consuming process, another challenge faced by companies is maintaining a scalable storage system. With such an influx of contracts received on a rolling basis, many companies lack the capacity to maintain organizational efficiency.
As with anything, organization is key to the success of a company which is why it’s just as important to have a proper database where contracts can be filed for seamless access in the future. Automated solutions powered by AI help companies of any size maintain and manage a large volume of contracts within an organized and easily accessible database.
Offer Valuable Insights
AI-powered tools help to promote more efficient analysis, review and management of contracts among such a heavy volume received and stored within company databases. Not only do these tools collate data, but extract information to provide valuable insights that can help drive new opportunities and generate revenue.
By using AI-powered tools to draft and review contracts, companies can reduce the risk of future legal issues often associated with misinterpretation of terms or simply human error. Using artificial intelligence, the software can review contracts to ensure that all information aligns with the corporate policy in addition to identifying anything that needs to be reviewed further. This will save money, time and frustration from ending up in a litigious battle that could have been otherwise avoided using an automated tool.
Invaluable Benefit of AI Tools
Artificial intelligence has a major impact on contract analysis and its role in helping companies avoid any frustrations stemming from human error or complex systems. An astounding 88% of business professionals admit that they find contracts difficult to understand, and with such severe repercussions resulting from not complying with contract requirements, it’s necessary that everything is reviewed and understood properly.
From streamlining processes to maximizing efficiency, more companies than ever are introducing AI-powered tools to be used by their organizations on a regular basis. By incorporating solutions that aim to relieve pain points around contract analysis, companies can benefit from the invaluable advantage that promotes overall efficiency and ease for all parties involved.