Contract management continues to evolve as the technology and tools involved improve and new features are introduced. One recent change that has already had a tremendous impact on legal teams is the introduction of artificial intelligence, which offers the ability to immediately extract actionable data from corporate agreements, among other benefits.
AI contract management is most likely to benefit industries with highly routine, template-based contracts such as healthcare, government, and manufacturing -- but as the technology continues to evolve, many other sectors will also benefit.
In contracting specifically, AI is expected to have a positive impact in three key areas, according to a Harvard Business Review article:
1) by changing the tools firms use to contract;
2) by influencing the content of contracts; and
3) by affecting the processes by which firms contract.
Contract AI is also expected to engage lawyers in higher value work. Professor Gillian K. Hadfield, a law professor at the University of Southern California who specializes in contract law, said she believes that AI in contracting will lead to a better use of legal talent: “[L]awyers will shift their focus from routine activities to much more high value work involved in shaping strategies and navigating complex legal problems.”
While AI is still in the early stages of both growth and adoption, what matters is the effectiveness of contract management software. Having visibility into your contract portfolio helps legal teams avoid risk and make better business decisions. We are not close to realizing the full potential of AI, but it can “supercharge” certain elements of the technology, enabling faster and more efficient contract drafting, review, and execution. Ultimately, though, the people using the contract management tool will decide the true value it brings.
ContractWorks’ latest Ebook, How AI Contract Management Improves the Value of the Legal Department, takes a deep dive into how artificial intelligence is actually impacting corporate legal teams, the rise of legal technology, and a look at what is to come. Download your complimentary copy of the Ebook to read more about how contract management with AI impacts legal departments.