Artificial intelligence (AI) describes a computer-based technology that collects and analyzes data, draws conclusions, and completes tasks typically performed by humans. This innovative frontier extends technological capabilities to regions beyond software’s traditional mapped and predetermined possibilities. Attorneys and legal departments are just beginning to discover how artificial intelligence is changing the legal profession. In this article, we’ll examine several ways AI is transforming the process of contract review and negotiation.
6 Ways Artificial Intelligence Is Changing the Legal Profession in Contract Management
In 2021, AI-based software allows corporate legal departments to automate work such as the contract review and negotiation process. Instead of requiring in-house or outsourced attorneys to spend days or weeks reviewing and negotiating contracts, AI enables legal departments to complete this work more quickly by orders of magnitude. Listed below are seven fundamental ways that AI is reshaping contract management for corporate legal departments.
1. Clarifying Terms To Mitigate Risk
Because of advances in Natural Language Processing (NLP), AI can identify ambiguous terms and suggest appropriate replacements. Additionally, as contracts trend away from legalese, AI can automatically simplify and auto-insert preferable language. When it comes to risk, the AI can flag potentially risky clauses based on severity, so attorneys know where to focus their review and negotiation efforts. Upon a single scan, AI-powered technology can conduct a thorough risk analysis that previously would have only become available after an experienced attorney reviewed the agreement.
2. Standardizing Best Practices To Work Smarter
Legal departments often create playbooks to standardize definitions, preferred negotiation positions, and best practices. Artificial Intelligence can utilize a Digital Playbook and enforce the parameters of such a playbook when reviewing all new contracts.
3. Tracking Changes To Improve Accountability
A legal department can facilitate a contract’s progression toward execution by making changes visible to both parties. As an agreement moves from one party to another, the appropriate reviewers can recognize which clauses require attention. As a result, process bottlenecks become apparent and can be addressed in the Digital Playbook so they may be overcome at the earliest possible moment.
4. Negotiating Contracts To Expedite Close Times
AI collects data to help attorneys discover new insights, formulate evidence-based conclusions, and develop their contract negotiation strategies. The AI helps streamline the contract negotiation process by identifying how and where negotiated agreements deviate from standards and proposing substantiated changes. This kind of data-driven analysis leads to better outcomes and quicker resolution times.
5. Improving Client Relations To Secure More Referrals
Artificial intelligence is changing the way lawyers interact with their clients. Senior team members can reduce time spent buried in documents and concentrate on applying their knowledge and expertise, exploring and explaining strategies, and finding mutually agreeable solutions.
6. Reducing Burnout for Attorneys and Legal Staff
While contract review is necessary, it can also be mind-numbing work. Allowing AI software solutions to complete the first round of heavy lifting can alleviate this tedium while providing attorneys and legal staff with a comprehensive review free of human error. The best AI platforms not only flag areas within the agreement for review, but provide extensive analysis and suggested changes in the form of actual redlines.
Discover How LexCheck Transforms Contract Management
Artificial intelligence is changing the legal profession, as corporate legal departments have begun to implement AI platforms in their day-to-day operations. LexCheck, a leading AI-powered contract negotiation platform, enables attorneys to employ next-level artificial intelligence for everything from NDAs and service agreements to software licenses and lease renewals. LexCheck can save legal teams days worth of contract review and negotiation work while improving agreement accuracy and efficiency.