Artificial Intelligence in Contract Management – The Robot Lawyers are Coming!: Part 3

After discussing Artificial Intelligence and how it matters for contract management in the previous blog posts, it is now time to dig deeper into AI.

The functions of a contract management solution can be broadly divided into three parts – authoring, storing and analysing. AI helps in each of these stages, making the automated process of contract management more powerful and enables organizations in realizing greater value from their contracts.

  • Authoring –Most CLM solutions have a repository of templates and clauses which can be used to build a contract. However, artificial intelligence takes this feature to the next level. With an AI engine powering the CLM, the level of awareness of the tool moves from content to context. This means that the CLM can help not just in building the contract, but also identify the pertinent clauses that should be used for a particular type of contracts. E.g. the CLM will recognize and inform you that a procurement contract should contain a currency fluctuation clause if the vendor is not based in the US.
  • Storing – Storing might be the most passive part of contract management, but AI can add something during this stage as well. Searching for a record in a repository having hundreds of thousands of contracts is cumbersome. A CLM with an AI engine that learns on the job can perform a Google like free-text search rather than search based on exact text matches.

The third stage of contract management – analysis – is the part where AI really comes into its own. That will be the topic of discussion in our next (and concluding) part of this blog series. Needless to say, we would love to hear from you in the comment section below.

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Author Arthur Raguette

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