Artificial Intelligence or AI is now being used by almost every sector. Global research and advisory firm Gartner predicts that the business value created by AI will reach $3.9 Trillion in 2022. That explains why businesses are heavily investing in the technology — legal being no exception.
If you are an attorney, AI can help you in managing administrative workloads like managing contracts. This will enable you to concentrate on more complex tasks such as appearing in the court for a hearing — something that is beyond the capability of AI.
Speaking of managing contracts, or more technically, Contract Lifecycle Management (CLM), AI has made its way into this as well, and only for good.
We know that creating a contract is no easy job. From ensuring the inclusion of all the appropriate clauses to the long-drawn contract approval process — the demand for accuracy in the quickest duration keeps breathing on your shoulder. AI can be THE SAVIOUR here. Continue reading this article to know how.
While we have already discussed at length how Artificial Intelligence can be a game-changer for contract management, in this blog post, we will zoom in on how the technology can enhance pre-award contracting processes.
What is the Role of AI in Pre-Award Contract Lifecycle Management?
1. External Contract Data Extraction
AI-led contract lifecycle management software like Ultria ORBIT GUIDE have built-in support for loading external agreements through the request-intake portal. Utilizing Natural Language Processing (NLP) and Optical Character Recognition (OCR) integration, it can parse through papers to extract contract metadata like contract titles, effective start/end dates, currencies, contracting parties, etc. So, it allows your lawyers and legal operations team to process external contracts easily into the organization’s system.
2. Third-Party Contract Risk Review
The financial implications of errors in legal phrasing are huge. So, it is imperative to have a provision that provides a safeguard against such errors. Advanced AI engine ORBIT GUIDE can extract key clauses from third-party contracts, identify the missing ones, and add them with just a click. Analyzing the differences between external agreements and the preferred language, it standardizes the contract language and obtains accurate terminologies with OCR powered with NLP — reducing risk and ensuring you stay compliant.
3. AI-Assisted Contract Authoring
Corporate legal departments need to draft hundreds of contracts, but many of these do not require very specialized legal input. However, lawyers spend their valuable time drafting these contracts.
According to the Gartner legal and compliance automation study, the number one priority of executive teams is to increase the legal department’s speed of delivery. On top of that, most of the enterprise contracts have varied clauses and styles. It is a very laborious task to draft such contracts from scratch.
Here too, AI can be the rescue — ORBIT GUIDE enables easy contract authoring with customizable contract templates and pre-approved clauses. It also provides suggestions on alternative, missing, and fallback clauses based on comparison with defined standards. So, it not only speeds up the contract creation but also eliminates the use of improper contract formats or non-standard language.
4. Negotiation, Review, and Approval
Multiple negotiation cycles often elongate the contract sign-off time. Having an automated negotiation process with AI-led suggestions based on historic data can be a real savior. According to Gartner, by 2023, AI will enable 30% faster contract negotiation for organizations that deploy leading CLM solutions.
After a contract has been negotiated, the review and approval stages often take the longest due to multiple revisions. Learning from the organization’s transaction history, AI can review high-volume but low-edit agreements and suggest revisions to bring them up to the company’s standards. This will unburden the attorneys and enable them to focus on contracts that have the potential to fetch more value for the organization.
Well, there is more to it. Without visibility into the workflows, stakeholders are often unaware of where the contracts are stuck. Ultria’s AI persona ORBIT improves visibility and generates alerts to reviewers — avoiding delays. The version control and management ensure you are not accidentally accessing the wrong version and keeps a track of changes made by every stakeholder — increasing accountability and maintaining an accurate audit trail.
Now that you know how Artificial Intelligence, more precisely, AI-powered CLM software can accelerate pre-award contracting, do not let your organization stay behind the game. Build a case for contract management today! Remember, a smooth pre-award process paves the way for an effective post-award contracting experience.
In this blog, we have spoken about how Ultria AI can enhance pre-award contracting, click here to know how we can do the same for the post-award stage.