Conversations about artificial intelligence in a business setting are important. According to a study performed by MIT Sloan Management Review, over 80% of organizations see AI as a vehicle for strategic opportunity. Additionally, 85% of organizations view AI as a means for competitive business advantages.1
This interest in – and implementation of – AI applies to legal teams and other contract managers as well. Manually managing and reviewing an ever-increasing number of contracts of varying complexity is stressful and inefficient. But it does not have to be.
Organizations can improve contract review with AI-powered contract management software.
Contract AI supports contract managers with tools for drafting, reviewing, and executing contracts. It can help them decrease instances of human error during contract lifecycle management while ensuring that the best contract language and clauses are included in finalized contracts.
These AI-based contract review tools should be important to legal ops professionals because those who present the most accurate and favorable contract language can reap the most value from business relationships while maintaining healthy legal standing.
Let's go over key steps for getting started using AI to review contracts in the most efficient way possible!
Start your contracting process by uploading your contract to AI contracting software.
Once you upload your contract, data mining and intelligent contract data extraction can begin. This process helps convert static contracts into dynamic, meaningful data.
First, contract review software can identify key data such as places, dates, financials, contact information, and more. You don’t have to waste time manually keying in contract metadata.
Next, intelligent contract data extraction can scan contracts and locate key terms, legal phrases, clauses and other important text. This process is powered by natural language processing (NLP) so that you can reap the most from purposeful, favorable contract language.
Now you can further enjoy an automated contract review process with auto-redline. Auto-redlining contracts allows you to automate the inclusion of clauses from your pre-approved library – if preferred – to virtually ensure that favorable clause language is included.
Depending upon the contract type, preferred types of clauses are included in the original contract drafts. However, these may include errors. Auto-redline can serve to fix up these clauses.
You can auto-redline documents as needed or configure your contract software system to redline documents upon upload. You can quickly see auto-redline in action while leveraging comments and comprehensive audit trails for each version.
You can use auto-redline tools within a native online document editor within contract management software or within MS Word.
Your team likely has clauses and sections that commonly appear in your contracts. It only makes sense that you have metadata fields for those clauses – so that they are easily capturable and searchable.
Thankfully, AI tools for contract review support proactive CLM field recommendations so that you can enjoy visibility and governance for extracted, common clause types at a glance.
Contract review requires healthy and efficient collaboration. Thankfully, contract review software has you covered.
Configurable user permissions can allow you to make sure that only relevant personnel have access to certain contracts.
Online negotiation with clause ownership functionality helps ensure that internal employees and counterparties alike are on the same page with clause versions. Those assigned to clauses are alerted if anyone tries to make contract language changes.
With contract workflows, automated approval processes can be assigned to virtually any part of a contract’s life – including configurable electronic signature processes.
Contract analytics help your team to analyze a given contract and a legacy of contract data at a visually-engaging glance.
In the end, the key takeaway here is that there are myriad contract review tools at your disposal with AI-based contract management software. The data shows that the vast majority of legal ops professionals (74% according to CLOC) are embracing contract management software.
To get started with AI-based contract review automation and a streamlined contract lifecycle, book a free demo of CobbleStone Contract Insight® today.
*Legal Disclaimer: This article is not legal advice. The content of this article is for general informational and educational purposes only. The information on this website may not present the most up-to-date legal information. Readers should contact their attorneys for legal advice regarding any particular legal matter.
1Enholm, I. M., Papagiannidis, E., Mikalef, P., & Krogstie, J. (2021). Artificial intelligence and business value: A literature review. Information Systems Frontiers, 1-26.