Legal Process Outsourcing: How AI Simplifies Contract Negotiation

Increased contract volume and a growing backlog of negotiations pose a significant challenge to corporate legal departments and contract lawyers. Since most corporate legal departments lack an AI (Artificial Intelligence) Digital Playbook and are unable to leverage automated processes to accelerate contract review and negotiations, they cannot efficiently negotiate a high volume of agreements. Instead, legal departments have increasingly turned to legal process outsourcing services to perform contract reviews.

Recent legal tech innovations in artificial intelligence are enabling  corporate legal departments to reclaim their contract review functions. By employing an AI-powered contract negotiation platform, in-house legal departments can accomplish contract review and negotiation protocols while alleviating the need to outsource and train additional resources. Next-generation technologies like machine learning and natural language processing now make it possible for the AI to mark up and evaluate agreements as if a trained in-house attorney were conducting the review. 

Let’s examine a few critical ways AI simplifies contract negotiations and allows corporate legal departments to increase efficiency without outsourcing their contract review process.

AI Standardizes Playbook Compliance 

Contract consistency is an ongoing struggle—particularly when contract volume and budget requirements require legal departments to outsource contract review and bulk contract management services. Regardless of whether an in-house or an outsourced team completes contract reviews, an AI Digital Playbook ensures consistency across the review and negotiation process. 

With an AI Digital Playbook, legal departments can: 

• Deliver automated attorney-quality redlining and guidance.
• Ensure strict adherence to the Digital Playbook.
• Identify instances of noncompliance.
• Keep track of variations in a particular type of provision.
• Iteratively improve playbook standards based on negotiation results. 

Additionally, the contract intake process simply requires an attorney or legal staff member to email or upload the agreement for AI review.

AI Completes Near-Real-Time Contract Review and Markup

Legal document review software has existed for years to help companies store and organize contracts in a digital format. However, an AI contract negotiation platform dives deeper by: 

• Identifying contract types based on pattern recognition and drafting similarities.
• Training the AI to extract key variables such as clauses, dates, and terms.
• Detecting anomalies or departures from standard protocol.
• Predicting which aspects of a contract will need to be rewritten or negotiated. 
• Flagging particular passages for senior lawyer attention. 

An AI contract negotiation platform “reads” and responds to contracts with insights and analytics that accelerate negotiations while adhering to playbook guidance. As such, attorneys are free to focus on more complex, higher-value matters.

AI Reduces Legal Process Outsourcing

Legal departments spend millions of dollars each year combating the effects of  staff turnover. Unsurprisingly, many of those departments choose to outsource contract review to save on the costs of hiring, training and retaining in-house legal staff. However, corporate legal departments have found that legal process outsourcing introduces its own liabilities. Frequent communication gaps and cultural barriers can become an obstacle for clarity and precision in contract language. Likewise, a legal department’s outsourcing partner often faces quality control, confidentiality, and employee turnover issues. And these issues can affect the quality of outsourced contract services and lead to prolonged and escalated negotiation cycles.

Technological advances in AI and machine learning have rewritten the rules on legal process outsourcing. An in-house AI-powered contract negotiation platform can replace the need for legal outsourcing altogether by completing playbook-compliant, attorney-level contract reviews in a fraction of the time required by an outsourced partner. Moreover, the speed of AI-powered contract review and negotiation enables attorneys and legal staff to accumulate that most elusive asset: time.

Intuitive AI Adapts and Responds to Your Language

Only the top legal AI innovators have been able to harness machine learning and natural language processing technologies to perform playbook guided, context-sensitive insertions and suggestions. 

An intuitive AI-powered platform can:

• Identify patterns in contract structure, language, and clause options. 
• Compare original versions to negotiated versions and extract ideal phrasing.
• Validate language adjustments and deletions with explanatory notions.
• Insert best practice guidance where appropriate to improve playbook standards.
• Automatically analyze historic contracts to identify and reproduce win-win clauses.
• Nimbly change its negotiation positions in response to an evolving business landscape.

Legal self-service and AI-assisted contract negotiation present new opportunities for legal departments as evinced by early adoption of the technology among Fortune 500 companies. Instead of entering complex and sometimes inefficient relationships with outsourced partners, corporate legal departments are discovering the benefits of an in-house AI contract negotiation platform.