The world of contracts is changing. We’ve shifted away from obsolete methods of managing our contracts. The days of emails and spreadsheets are no more. In recent years, the industry has acknowledged the power of using sophisticated contract management software to eliminate human error and save time. One of the key features of such software is the revolutionary incorporation of artificial intelligence.
Okay, but what do you mean by Artificial Intelligence?
No, artificial intelligence in our context is not the work of SkyNet. Artificial intelligence, or AI, is a system designed to facilitate and assist the human decision-maker. Most programs depend entirely on the programming they received at the beginning of their conception. AI works a little bit differently. AI may perform a certain way at the moment of their creation. However, as the artificial intelligence system gets fed more data, it begins to “learn.” Like humans, artificial intelligence uses what it has learned to perform more effectively and efficiently in future situations. The beauty of artificial intelligence is its ability to improve over time.
It has already been mentioned, however, I’d like to drive this point home. Data is the speciality of artificial intelligence. The more examples of historical data that is made known to the AI system, the better the models become at predicting future outcomes. In our case, this data-centric nature of artificial intelligence becomes very useful. The value of AI for contracts will rise in relation to the number of data points captured in your contract management software. Good contract management software would have pre-trained their artificial intelligence before releasing their software to the public. Good AI can be utilized throughout the entire contract lifecycle.
Does AI help businesses?
Contracts are at the heart of our economic system. Business transactions cannot be performed without contracts. Despite the importance and frequency of proper contract management, it is surprising that only a few companies are efficient and effective in this regard. According to the Harvard Business Review (2018), it has been estimated that inefficient contracting causes firms to lose between 5% to 40% of the value on a given deal, depending on circumstances.
Firms of all sizes face a common problem: managing the sheer number of contracts they must keep track of. It is no easy task, after all. There is often a lack of uniformity and difficulty in an organization. AI software, however, can easily extract large volumes of data and transform it into something useful. Companies can handle contracts more rapidly and easily, with fewer chances of error. This streamlines the flow of workout throughout the entire contract lifecycle. Below, I will discuss in detail the ways ContractAwesome has incorporated artificial intelligence into its contract lifecycle management platform.
AI: Handwritten to Editable
ContractAwesome has a trained AI-based OCR algorithm to seamlessly convert handwritten documents to editable ones. You upload a photo of any handwritten document and their AI algorithm will accurately convert this into an editable document. You can see how this is already a huge time saver.
Perhaps you work better when drafting documents with a pen and paper. Or perhaps you left your laptop at home but needed to get some writing done. A pen and paper will do the trick. However if you plan on formally sharing these documents or are required to encode these documents, you will be forced to tediously copy your handwritten work onto a Word document. This can take up valuable hours of your time, which could be better spent performing more substantial tasks.
Using this AI-powered conversion feature, the handwritten documents can be converted into editable documents in just a few seconds. From there, you can edit the document as needed, save it in whatever digital format you require, and share it with your team. The flexibility of this feature is quite amazing. It also works for hard-copy printed documents which you may need to edit, but do not have access to the soft copy. For contracts, this is a game-changer.
Another useful AI algorithm that has been programmed into ContractAwesome’s platform automatically detects dates and other important data. In the context of contracts, this can make management much more efficient when handling large volumes of contracts.
First of all, reading through, or even merely skimming through contracts takes time. Contracts can be lengthy and can contain data that you may not be particularly interested in at the moment. The artificial intelligence basically eliminates the need for you to re-read contracts in order to simply find one piece of information.
By managing all your contracts on ContractAwesome’s platform, you have access to all relevant contract information at a glance. For example, if you want to find out which contract will expire first, you traditionally need to read through all your contracts, find the dates, and then compare them. By utilizing artificial intelligence, the AI will do all the reading for you. It will then present all your active contracts with their relevant dates. In just a few seconds, you can easily accomplish the task you originally wanted to perform: find out which contract expires first. As you can probably imagine, this becomes particularly useful when handling hundreds and hundreds of contracts at the same time.
The AI revolution does not stop here. There is yet another AI algorithm in ContractAwesome’s software that detects and highlights risky clauses in contracts. If you’re not a lawyer, you may not be aware of a risky clause within contracts. Or, you may simply not be familiar with the technical terminology. AI fixes this problem. The AI will scan through your contracts and mark any clauses that it deems risky for the parties involved. So, you can rest easy knowing the clauses in your contract are sound.
AI for contracts will change the way we deal with our legal documentation. The future truly is now.