Artificial intelligence is officially raising the bar for the contract tech industry. Contract review has long been a time-consuming part of traditional law practice. Attorneys meticulously scour these documents to spot errors and make corrections, all to protect their clients’ interests. And while human error has the potential to taint this process, that is about to change.
AI-driven contract review automation (CRA) platforms like LawGeex offer a more efficient and reliable alternative to traditional contract review, transforming the legal industry as we know it.
Contract Review Automation: The Future of Law
CRA can streamline law processes and reduce risk by automating a variety of legal tasks. So, how exactly does this work? LawGeex’s technology uses artificial intelligence to review documents such as nondisclosure agreements, master service agreements, SaaS service-level agreements, and more. An attorney uploads a contract onto the platform and receives it back with redlines — all in a fraction of the time it would take to review the document manually.
This advancement in contract tech marks a significant step forward from existing CRA tools.
“Most CLM platforms have a built-in basic CRA tool that can spot issues within contracts,” said Audelia Boker, VP of marketing at LawGeex. “These entry-level assisting CRA tools do not provide significant efficiency gains, though, as they flag unacceptable or missing clauses, but still heavily rely on legal teams to fix issues.” This means lawyers still need to do the actual review and negotiation work.
CRA tools that use artificial intelligence simulate a lawyer’s manual review process through machine learning, transforming contract review into a highly efficient process.
How AI-Driven CRA Is Disrupting Law
AI technology enhances CRA in a number of ways. Legal teams can expect the following benefits when incorporating this software into their practice.
Existing CRA tools work by identifying possible flaws in legal documents. While this can help with accuracy, simply pointing out issues doesn’t offer the time savings that firms need. Incorporating AI into CRA offers full redlining and iterations. After the contract tech system is done reviewing a contract, law firms can expect signature-ready documents that their clients can trust.
And these capabilities aren’t exclusive to certain types of documents. AI-powered CRA covers all routine contract types, including first and third-party paper. So clients who work with third-party vendors can trust the integrity of a firm’s contracts as well.
The applications of machine learning are seemingly endless, and most industries are starting to see this potential. Law firms in all disciplines can benefit from the wide capabilities of machine learning, and legal jargon poses no barrier.
“Pre-trained and self-learning AI solutions have reached a point where they understand legalese, even if they haven’t seen the exact expression before,” said Boker. “They truly mimic the way lawyers’ brains work and will automatically mark up a contract with the customer’s position in mind.”
Furthermore, once a law firm adopts an AI-enhanced CRA system, the system’s quality and accuracy will only increase with time.
Elimination of Human Error
Quality and accuracy are integral to law practices, and AI contract review takes this consistency to the next level. Lawyers traditionally spend long hours reviewing contracts for errors. However, if human fatigue leads to human mistakes, an attorney could jeopardize a legal case and their client’s interests.
AI contract review solutions streamline this process, eliminating the risk of human error. Firms can expect accurate and consistent results with every scan, while retaining the ability to edit the documents themselves.
Time and Cost Savings
Even with a CRA system in place, a lawyer may still spend hours reviewing contracts before a signing. This lengthy review process can lead to a multi-day turnaround time for contracts — and a slew of impatient clients. AI capabilities significantly reduce review times, allowing firms to offer same-day review and signing. Cutting down on contract review time means attorneys can devote their billable hours to higher-value tasks.
A law firm’s reputation is central to its brand, and supporting this reputation starts with building client trust. Law clients expect the contracts they sign to be accurate. If a firm fails to effectively review a document, they could compromise this accuracy. Additionally, AI takes the guesswork out of contract review and produces reliable results, so repeat clients and referrals become the norm.
Machine learning presents a multitude of benefits for law firms. Thus, incorporating this technology into a CRA system will no longer be recommended, but essential.
Looking Ahead on Contract Tech
The onset of the Covid-19 pandemic emphasized the importance of business continuity, and legal teams were largely able to adapt quickly to a work-from-home model. However, law firms whose teams were working remotely still needed to maintain consistent contract review practices and online signing processes. This proved to be an obstacle. Fortunately, the capabilities of AI technology can provide new solutions to enable legal business continuity in the face of future challenges.
“The need for driving legal efficiency has become a must, and the awareness of AI-driven contract review automation technology as a key driver of such efficiencies is gaining momentum,” said Boker.
Analytics features will be commonplace among leading CRA solutions, offering real-time insight for legal teams. Attorneys will be able to monitor daily workflows, make data-driven decisions, and delegate tasks according to workload. One day, if another global event like Covid-19 occurs, legal teams will be ready to continue their processes without a hitch.
Even though existing CRA systems provide a level of convenience, many law firms are missing out on the increased accuracy and efficiency an AI-powered CRA platform provides. The bottom line is that adopting an AI-based contract tech review system greatly enhances the integrity of a law firm. As more firms reap the benefits of machine learning, the legal profession as a whole will feel the disruption.