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Legal tech technology has taken a qualitative leap forward thanks to the emergence of legal AI. In this article, we show you the perfect match between artificial intelligence (AI) and Contract Lifecycle Management (CLM) to transform your legal department. This union optimises processes and increases efficiency and accuracy in contract management. Explore with us how the integration of AI and CLM helps you revolutionise your legal practice: get ready to discover how these innovations can propel your legal department to new heights.
What you will find in this article:
- What is AI in contract management?
- Benefits of integrating AI with CLM
- Use cases: AI and CLM in action
- Challenges vs. recommendations when implementing AI in CLM
- The future of the legal department with AI for contract management
- The next step for your legal department
What is AI in contract management?
Artificial intelligence (AI) in the context of Contract Lifecycle Management (CLM) refers to the application of advanced algorithms and machine learning to automate, analyse and optimise the different phases of the contractual process.
Legal AI tools applied to CLM are trained on large volumes of legal data to learn and continuously improve. This allows the systems to identify patterns, predict outcomes and provide data-driven recommendations. For example, a legal AI can analyse contracts to detect clauses and exceptions, as well as offer improvements or changes and draft new legal content, thus facilitating review and ensuring compliance.
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Benefits of integraing AI with CLM
Increased efficiency and time reduction in routine tasks
Integrating AI with CLM enables the automation of a number of routine tasks that consume much of legal professionals' time and eliminate the ability to perform strategic tasks at critical times of high peak workloads. By streamlining certain processes, lawyers can spend more time on more strategically valuable activities, such as contract negotiation and legal planning. This time saving not only increases productivity but also enables lawyers to provide a better service to their clients, for example, by being able to engage more closely with them, respond more quickly to their needs and provide more detailed and accurate advice.
Improved accuracy and speed of contract review
AI can quickly analyse large volumes of contracts, identifying key clauses, critical terms and potential risks. This allows lawyers to review contracts more accurately and in less time. In addition, legal AI tools can automatically flag discrepancies and suggest modifications, making it easier to review and approve contracts.
Optimising data-driven decision-making
AI solutions in CLM provide real-time data and analytics, enabling lawyers to make informed, fact-based decisions. By analysing trends and patterns, AI can predict potential problems and anticipate recommendations to mitigate them. This not only improves risk management but also optimises the firm's contractual strategy.
Use cases: AI and CLM in action
Contract drafting and review
Tools such as the Libra legal AI wizard use AI to analyse and extract relevant information from contracts. These tools can identify clauses, exceptions and potential risks, facilitating review and ensuring compliance through a wizard that can be accessed from within the CLM software.
Legal research
AI is also used to conduct legal research. For example, Lex Machina analyses millions of court documents to identify patterns and predict litigation outcomes. In-house lawyers can use these insights to develop more effective strategies and increase their chances of success in the most complex court cases. Integrated with the CLM, this type of solution offers key strategic insights for legal departments.
Deadline and compliance management
CLM tools can send automatic alerts and reminders about key dates, such as contract renewals and expirations. This ensures that contracts are proactively managed and important dates are not overlooked, which could lead to non-compliance. These automatic alerts are invaluable in maintaining control and ensuring that all contractual aspects are handled in a timely and compliant manner.
Challenges vs. recommendations when implementing AI in CLM
Main challenges
Despite the benefits, the implementation of AI in CLM is not without its challenges. One of the main hurdles is integration with existing systems. Companies must ensure that their AI solutions integrate seamlessly with their contract lifecycle management systems and other enterprise platforms. In addition, AI adoption requires a significant investment in terms of time and resources, which can be a barrier for some organisations.
Recommendations for overcoming these challenges
To overcome these challenges, a clear and well-defined strategy is crucial. Companies should conduct a thorough assessment of their needs and objectives before implementing AI solutions. Trying out a CLM that includes AI is a tip to keep in mind because, in addition to being AI-trained specifically for the legal sector, it will avoid unnecessary integrations. When selecting a provider, it is also important to opt for those that offer ongoing support and training to ensure a successful implementation. In addition, fostering a culture of innovation and adaptability within the legal department can ease the transition and maximise the benefits of AI.
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The future of the legal department with AI for contract management
As predicted by multiple studies and experts in the field, this has only just begun. As technology advances, the integration of AI and CLM is expected to continue to evolve. Let's just look at the evolution of generative AI in video creation in a single year, from 2023 to 2024:
Impressive, isn't it? This is not something that will only happen in the field of audiovisual creation. In the future, AI and CLM are expected to become essential components of any company's legal strategy. AI solutions will become increasingly sophisticated, offering more accurate predictive analytics and data-driven recommendations. Legal departments will need to stay abreast of these trends and adapt quickly to take advantage of new opportunities and address emerging challenges.
The next step for your legal department
The integration of AI and CLM offers a perfect match to boost the efficiency, accuracy and effectiveness of your legal department. By adopting these technologies hand-in-hand, lawyers can transform contract management, improve decision-making and optimise the firm's legal strategy. Don't get left behind and discover how legal generative AI can help you take your legal practice to the next level - explore the future of law today!
