Harnessing Generative AI for Efficient Contract Management

Generative AI is a state-of-the-art technology that leverages natural language processing and is trained to create high-quality content. It is fast becoming a game changer where legal and contracting professionals are now using large language models to leverage the automation capabilities it offers. Gen AI can automate any process related to the contract lifecycle, including drafting, redlining, and contract negotiations. 

It can auto-read contracts by highlighting the critical areas in a contract that you should have a look at and automatically compare the contract with the rules or laws associated with the business. When you embrace your Gen AI system with the right prompt, it generates clauses and comes up with smart recommendations. 

Embrace Confident Compliance 

Legal teams frequently struggle to determine whether specific clauses are following regulations regarding compliance. 

The capabilities of generative AI go beyond simply searching your contracts for any undetected risks; it can also search through all your contract documents for any clauses that might pose a legal issue. 

Generative AI is incredibly adept at generating wording that adheres to regulations and internal policies. Your contract review processes get more reliable and consistent as revisions are made in standardized language and negotiations become more uniform. 

Organize and Migrate with Ease 

Generative AI makes searching your contract repository easier. The highly intelligent and robust indexing system recognizes and categorizes important information based on criteria such as contract type or expiration date, making it easily searchable and accessible from anywhere. 

It understands queries in natural language, helping you find what you are searching for within a couple of seconds. The contract files will always be up to date since generative AI offers better version control and efficiently tracks changes. 

AI-Powered Negotiation 

Creating mutually beneficial agreements and entering strategic collaborations that yield the best possible outcomes for all parties involved in a negotiation can be time-consuming. Generative AI can be your secret weapon to help you build winning strategies.  

Understanding contracts like non-disclosure agreements (NDAs) or service agreements is made simpler by generative AI, regardless of your background in law. You can create compelling counter-proposals, anticipate counter-arguments, and come to agreements that benefit both parties. 

Gen AI for Conversational Contracts 

Gen AI can work with you as your assistant legalese translator making your contract language more conversational, transparent, and easy for everyone involved in the contracting process. Understanding the context is critical for legal teams, and Gen AI uses concise language that reads like a simple conversation outlining the conditions and obligations. 

By providing suitable suggestions for alternative words, gen AI enhances communication and eliminates misunderstanding. It can generate clauses that clearly articulate your intentions in understandable language. 

You can discuss contracts with all the parties involved in real-time to make sure everyone is heard throughout the process.

Source: Gartner Newsroom

According to a Gartner report, by 2027 half of all organizations will leverage AI for contract negotiations. Furthermore, it says that generative AI takes center stage and that procurement team leaders believe it could potentially impact contract management and sourcing. 

How does generative AI make a difference in contract reviews? 

Reviewing contracts at different stages of their life and laboring through pages is an error-prone process. You spend hours reviewing stack after stack of contracts with your complete attention and we understand this can be stressful and time-consuming. 

The legal teams have realized all too well the efficiency that comes from automating their tedious and repetitive tasks. 

Wouldn't it be amazing if there is a way to locate crucial clauses in a contract, and streamline and automate reviews especially when you have a mountain of contracts to monitor?

Since generative AI capabilities have been leveraged by contract management systems, legal teams have realized that they may have more time to focus on more strategic tasks. 

Let’s take a look at some of the benefits generative AI provides in contract reviews: 

Contract reviews powered by Gen AI systems accelerate the entire contract review process. It points out any potential risks and confusing clauses that you might have overlooked. 

One of the biggest benefits is the ability to quickly extract important provisions from contracts, saving you the time it would take to read the entire document. 

AI contract review tools like Dock 365 which generative AI powers do more than just extract the important clauses; they also compare clauses throughout the contracts to guarantee consistency and identify any variations. 

Even the most experienced reviewer is not immune to overlooking crucial terms or features in a contract. It could be a dropped comma or a single piece of data. 

Gen AI contract review software systems ensure you haven't missed any important clauses or information in a contract. In a couple of seconds, AI can carefully review a contract by focusing on specific sections. 

Even with the sheer number of contracts that need to be evaluated, generative AI serves as an additional pair of eyes. AI-based review software solutions improve accuracy by tracking regulatory changes and identifying potential problems, all while assuring compliance. 

3. Summarizes key points 

It is not easy for everyone to understand the complicated legal language. For the legal teams going through these long-form contracts can take a while to break down the important aspects.  

Leveraging generative AI to break down long contracts into readable summaries helps speed up the legal contract review process. AI-based contract review software highlights important phrases and clauses in the contracts and summarizes the key aspects of each of them. 

4. Contracts are clear to everyone 

Today's businesses need to ensure that everyone who is involved in the contract review process, from legal experts to stakeholders, can easily understand all the critical aspects of an agreement. AI-enabled contract reviews to embrace clarity in contracts.

AI contract review software increases communication, reduces errors and misunderstandings, and promotes greater collaboration. AI reads the contracts and paraphrases them into simple English so that everyone involved in the review process, even those without legal backgrounds, can comprehend them. 

This allows for swift communication amongst all parties involved, resulting in faster decision-making. 

5. Streamlined Workflows and Collaboration

Every legal team would want to have their workflow automated, to receive instant feedback and approvals with ease. Generative AI streamlines workflow enabling all the stakeholders involved in the contracting process to contribute simultaneously. 

From intelligently assigning tasks to the right people at the right time, a generative AI-based contract management system eliminates any bottlenecks. Generative AI can produce various iterations of your clauses for you to choose from if you are running out of words or want to go back and review any of them.

Your legal team members can add a comment, ask for quick feedback or any questions, and no longer need to draft lengthy emails.

6. Risk Identification and Mitigation

Generative AI uses advanced algorithms in proactive risk identification and mitigation. AI-powered reporting features give you insights into your contracts after scanning through the trends and patterns across your agreements and suggest areas for improvement. 

Ai-based contract management systems, such as Dock 365, provide smart alerts and notifications to keep all parties informed. 

You can discuss potential risks or threats with your team in real-time to develop risk mitigation strategies. Gen AI systems assess the context of clauses and identify areas that require attention, ultimately boosting your risk management methods.

How to Implement Generative AI in Contract Management the Right Way? 

Contract management processes could be made simpler with the help of generative AI, but implementing it effectively in your organization requires a thorough strategy. To start, identify the primary difficulties in your current contract management process. Make a thorough assessment of the data.

Examine the structure and consistency of your current contract data before you get started.  Although generative AI is revolutionary, legal knowledge is still essential.  Work together with your legal team to make sure AI-generated clauses satisfy the legal requirements of your company. 

Make sure the AI solution you've selected places a high priority on absolute security and complies with industry standards regarding data privacy. Another important aspect to look at when implementing a gen AI system is to define clear roles and responsibilities. 

Determine who is in charge of training and who keeps an eye on performance to make sure it's being implemented correctly. Keep an eye on key metrics like productivity and turnaround time and evaluate them consistently.

Take control of your contracts with Dock 365 

Generative AI is transforming the way contract management is done. From intelligent clause analysis to identifying and mitigating risks, Gen AI systems empower the legal team by streamlining their workflow. 

Dock 365 is an AI-based contract management system that leverages the power of generative AI to enhance contract reviews, enabling smarter negotiations and helping you take a more strategic approach to contract management. 

We have a team of experts to walk you through the platform at every step of the process to ensure smooth and effective implementation. Schedule a free demo today to see how Gen AI can improve your contract management process.