With on-going changes in both legislation and regulations, knowing what is happening with your existing contracts, agreements, and legal documents is becoming more challenging than ever before. More so, these external changes are so fast and vast, that keeping track of complex contracts and large volumes of documents manually are almost impossible. This is especially true in light of the work the legal teams take on, day in and day out.
Of the many daily contract management challenges legal teams to face, one that often keeps them awake at night is managing contract compliance across the number of contracts they must track, which were difficult to organize, manage, and update before the increased regulatory and legislative changes impacted them in the first place. Contract risk identification in contract tracking is another area where the contract and legal teams desire complete control, yet are typically overwhelmed.
From contract authoring to contract analytics, risks can be reduced throughout the entire contract life cycle with AI boosted CLM in the following ways:
Clause identification and tracking contract performance:
To address this, ULTRIA CLM’s Artificial Intelligence Engine rapidly finds, highlights and parses Terms, Clauses, and Sections from Third Party or Legacy Contracts. This means that the CLM can help not only in building the contract from your internal content but can also identify the clauses in external agreements that should be reviewed more closely.
An AI-boosted CLM can recognize and inform users that certain clauses should be included in certain types of contracts or should be included based on contract party specifics. This risk identification interpretive capability can prevent the company from future compliance risks by mitigating them at the contract generation stage.
Predictive Risk Analysis:
Risk Is predicted based on clauses used, past performance of similar contracts, and historic data of contracting party as well as leveraging external data feeds from Accounts Receivable or Vendor Management systems.
The contracts can also be easily tracked and managed with the help of metadata extraction. Contracts can be uploaded to the system for analysis and tracking, where critical information including the contracting parties; liability limits; renewal and termination information; governing law; privacy provisions and more can be extracted using Zycus iContract’s AI boosted metadata extraction functionality.
Is AI really here and is it ready for Prime Time?
Artificial Intelligence enabled contract parsing, metadata extraction, and even predictive risk modeling is ready and is here to stay. Previously considered a high-end add-on, we are seeing the inherent value of integrating AI into the core processes of contract management – and this echoes the market’s requirement.
In a recent webinar poll that we conducted, nearly 2/3rds (64%) of the attendees from corporate legal teams responded saying smart contract parsing is their top “future-tech” CLM concern. And nearly half (46%) of the attendees said they would like to have predictive risk analysis capabilities in their Contract Management system. You can replay the webinar or download the presentation of the webinar – Artificial Intelligence: Aligning Strategy with Operations here.