For the study, 20 human lawyers were pitted against LawGeex`s AI in the review of 5 NDAs. The controlled terms of the study were designed to resemble the way lawyers typically reviewed and approved day-to-day contracts. That`s where AI comes in. Natural language processing (NLP) is an AI technique that can help lawyers quickly gain insights from millions of unstructured data sources such as print books, legal websites, business databases, and historical records. By extending manual processes with AI, paralegals and lawyers can focus on more rewarding, higher-level tasks, such as working with clients. As a result, contracts can become as thick as books. An entire industry of lawyers, lawyers, paralegals and consultants is busy sorting the world, often accused of dark art with complex terms and impenetrable language of its own. Law firms are experimenting with digital subscription services that offer fast and affordable online legal services that can help reduce operational costs and enable teams to serve other smaller clients without sacrificing quality. Teams can leverage AI-powered customer service to provide customers with a faster way to automatically answer common questions. For example, teams can use AI-powered chatbots that are equipped with search capabilities that can display relevant data, introduce clients, and perform other tedious tasks, allowing legal teams to focus on higher-level work.
A new study published this week by LawGeex, a leading AI contract review platform, has revealed a new area where AI surpasses us: law. In particular, the review of non-disclosure agreements (NDAs) and the precise identification of risks in the legal documentation. The ability to identify and extract key data points also helps companies organize and execute contracts. For example, a company with a large number of supplier contracts must ensure that it keeps an eye on the differences between termination provisions and punitive and indemnification provisions – both in its own contracts and in supplier contracts. Managing variations is a huge undertaking that requires proactive organization. However, AI contract software can record and standardize these provisions in company contracts and those sent by suppliers, making it much easier to identify instances of non-compliance and ensure that adverse provisions are dealt with quickly. 2. Prepare contracts. The “holy grail” for in-house lawyers who draft contracts is the ability to create and use a form contract, i.e. an agreement that has standard terms and requires (or allows) limited changes/adjustments.
Form contracts are a huge time saver and allow the company to conclude a consistent set of agreements. There are AI tools that can create contracts, using all the parameters that the legal department considers important. In addition, the tool can be configured as a “self-service” for customers, i.e. the customer can connect to the system, select the type of contract it needs, enter certain variables and the system creates a standard form agreement out of the box. The legal department can decide to what extent it wants to be involved in the creation process, i.e. a quick review of all contracts generated by the system (or at least an approval process) or only see contracts of a certain type or if the client needs something non-standard. [2] In my research, I saw that many companies use contract management software, and a smaller number of companies – mainly those with a high volume of routinized contracts – use more advanced software with AI capabilities. These companies have generally noticed an increase in the productivity and efficiency of their contracts. Let`s explore some of the main responsibilities of lawyers and the main use cases of AI in the legal field.
Beverly Rich, J.D., is a graduate student in strategy at the Marshall School of Business at the University of Southern California. His research focuses on how organizations use legal strategies, particularly contracts and technologies, to gain a competitive advantage. Contracting is a common activity, but it is an activity that few companies do efficiently or effectively. In fact, inefficient contracts are estimated to cause businesses to lose between 5% and 40% of the value of a particular business, depending on the circumstances. But recent technological developments such as artificial intelligence (AI) are now helping companies overcome many of the challenges of procurement. This is essentially what the legal industry usually does by hand. Instead, you can further help your stakeholders by equipping automation tools with the ability to compare results with the mass of similar files. If the tool was able to recalibrate continuously and automatically, it would not be a big effort if it also removed recommendations or took action itself, such as transmitting a detected anomaly to a human examiner. The de facto standard adopted by dozens of Global 2000 legal teams looking to do more with less.
LawGeex automates the contract review process to expedite the conclusion of future-proof transactions and contracts. Legal organizations are exploring AI to automate time- and labor-intensive workflows in the legal industry. By providing employees with quick access to high-quality information, companies using AI achieve cost-saving efficiency and greater customer and employee satisfaction.