How contract AI is changing the game for legal teams in 2022
Signing on the dotted line isn’t the final phase of a contract’s life cycle. Every contract as it approaches its end date may be amended, renewed, terminated, or let to expire. And companies can’t afford ineffective contract lifecycle management.
For many legal teams, keeping track of where a contract is in the cycle, what information needs to be included, and when, is not only overwhelming, but also time-consuming. On top of that the lack of transparency and visibility turns would-be simple decision making into a frantic race against time to (hopefully) avoid letting a valuable contract lapse or otherwise missing out on incremental revenue opportunities.
In response to the chaotic and burdensome contract management activities that busy legal teams are tasked with, digital-first organizations are now turning to legal contract automation through machine learning and artificial intelligence to simplify contract operations, accelerate review and revenue cycles, and help organizations maximize the value of every contract.
The benefits of contract intelligence for legal teams
The contract process and lifecycle are now being digitized. This shift to digital-first is not only helping legal teams quickly filter, sort, review, and approve contracts, but it is enabling them to set up pre-defined terminology and clause libraries, making contract creation and review quicker and simpler.
Legal digital transformation is enabling legal teams to move away from administrative contract management tasks and to focus, instead, on strategic, needle-moving initiatives for the organization.
What’s more, contract intelligence is also helping legal teams realize the full value of every contract by extracting unstructured text from commercial agreements and organizing it into structured data. This allows for full visibility into contracts so the business can confidently track obligations, manage opportunities, and mitigate risks.
Here are a few major benefits of investing in contract AI for your legal teams:
Proactive alerts so you never miss a renewal or revenue opportunity
Legal teams are tasked with keeping track of key events in the contract’s lifecycle--like contract autorenewals—and other date-driven events.
With contract AI, legal teams can stay on top of contracts by setting up automated alerts and notifications. These alerts can be sent before every date-driven event and allow legal teams to collect insights that help with renegotiating contract terms before a renewal. What’s more, risk reports highlight potential liability exposure and questionable clauses that are present in contracts or within a clause library.
Minimized risk and more robust contract visibility
One of the main tasks of the legal team is to ensure that the company is signing off on good deals and mitigating risk for the company. When there’s a lack of visibility into every contract, during every stage of the contract lifecycle, exposure to liability and risk increases.
With legal contract automation and AI, legal teams can help ensure that the company is signing off on good deals, avoiding risks, and has full visibility into all contract obligations.
With Conga Contract Intelligence, legal teams can confidently track obligations, manage opportunities, and mitigate risks.
Eliminate manual process and tedious, time-consuming tasks
Manual tasks are taking legal teams’ focus away from strategic, needle-moving business initiatives, and requiring them to focus on administrative work. Contract managers are often tasked with finding, sorting, extracting, and updating contract information and data post-signature, manually.
With contract AI, manual tasks that legal teams had to manage like redlining, approvals, reviewing contracts, and more, are now a thing of the past, freeing up the legal team’s time so they can focus on the bigger picture. The slow, costly process of manual data entry and information seeking is solved with contract AI because these tasks are automated. This automation now easily provides contract managers with the information they need in seconds instead of hours or even days.
How contract AI is changing the game for legal teams in 2022
The world of legal operations and the role of the legal team in the revenue process has changed rapidly in the past few years. Here are a few top trends in contract management and contract AI that will change the game for legal teams in 2022:
Contract AI and contract lifecycle management tools will continue to gain popularity in 2022
Contract lifecycle management (CLM) technology has become a staple of modern corporate business practice and is projected to grow on average 11% per year through 2030 more businesses begin to adopt CLM platforms.
The automated workflows and processes alleviate much of the manual data entry and paperwork legal teams had to contend with over the years. But in an era where time is money and when legal teams are now positioned to take on a new strategic role in the businesses, simple automation won’t be enough as we approach 2022.
Contract intelligence is a next-generation approach to CLM that empowers sales, procurement, legal, and other teams across the organization to gain full visibility into past and present contracts to track obligations, mitigate risk, and maximize the value potential of contracts.
These solutions use AI and machine learning to extract unstructured text from commercial agreements and organize that information into the contract, so the data is structured and easier to analyze and manage.
This automated and streamlined process allows legal teams to populate the right data, in the right contract which in turn eliminates the need for manual entry and multiple rounds of reviews and revisions.
Automated document management and generation software will help legal teams save time with contract creation
With the quick shift to remote and hybrid working environments due to the COVID-19 pandemic, organizations have had to figure out how to support remote contract management creation, management, and overall legal operations.
A critical activity in the contract process—mitigating risk and ensuring legal language is accurate--is not only extremely time-consuming, but it can be a huge headache for contract managers as clauses, terms, and conditions can vary depending on multiple different factors including region, engagement, and more.
What’s more, sales teams, under pressure to hit revenue targets, might include incentive language in a contract to help close a deal faster but might not comply with corporate policies or industry standards. And when the contract reaches legal review, the sales rep and their prospect will certainly be disappointed when any rogue clauses or promises to get nixed.
Intelligent CLM solutions eliminate virtually all of this complexity, friction, and risk by automating contract drafting activities and populating each contract with pre-approved legal language. AI-powered contract solutions use a range of contract templates and generation wizards to enable sales, procurement, legal, and other teams to generate new legal documents—contracts, quotes, and more—with just a few clicks.
With the introduction of clause libraries legal teams can assert more control over contract language, without having to be directly involved in every step of the contract negotiation. Plus, all these activities can be done in one centralized system, allowing for greater visibility for all teams involved.
A centralized and smart contract repository
Organizations that have cycled through different contract software—from simple, consumer-grade contract templates to robust, enterprise CLM solutions—frequently have legacy contracts saved as scanned PDFs in some type of digital document repository that still requires a level of manual organization and categorization.
Legal and sales teams have only a hazy understanding at any given time of the many and varying contracts and obligations that exist in their environment.
Artificial intelligence empowers legal and sales teams to make more informed decisions about
- Contract renewal pipeline
- Up-sell or cross-selling opportunities
- Existing and upcoming obligations
- Accounts with termination clauses
Contract AI and machine learning can help overcome these challenges by centralizing contracts into a single solution where AI can help categorize the documents for easier reference and management.
The repository becomes the company’s single source of truth, replacing disparate storage systems that demand complex and time-consuming manual contract management tasks with intelligently automated ones and enabling more robust and accurate search queries.
The legal team’s and contract manager’s role in the contract lifecycle will continue to be critical
With the introduction of new, innovative technology aimed to reduce manual, administrative, and tedious work for contract managers, the legal team’s role in the organization might shift. However, legal operations are actually critical to digital transformation initiatives and business strategy more now than ever before.
Legal teams will be tasked with managing these digital solutions and ensuring that even with the robust automation, that contracts are still doing their job—protecting the company and mitigating risk--all while having the right clauses, terms, and conditions included for the deal.
Additionally, with the introduction of these solutions, the legal team can help define how the software can be used cross-functionally which will empower departments from all over the organization to work more closely and collaboratively.
With the implementation of in-house legal software that centralizes all contract activities and is fitted with automation, the legal team can now focus on more strategic, needle-moving projects that will bring the organization into the future.
Overall, the legal team will become an indispensable asset for digital transformation initiatives in 2022 and be an even more strategic partner.
Is your legal team ready to embrace contract AI in 2022?
Contract AI is an augmentation solution that empowers corporate legal teams to accomplish more work, in less time, while still protecting the organization and its customers.
The ultimate goal of CLM and contract AI software solutions is to unburden legal teams of time-consuming, low-value, and repetitive tasks.
As organizations continue to embrace digital transformation efforts in 2022 and legal departments increasingly become integrated into the enterprise revenue cycle, they’ll need technology solutions to effectively automate repetitive and tedious day-to-day tasks so they can train their focus on higher-value, more strategic initiatives that help the company be more efficient, competitive, compliant, and profitable.
Learn more about how contract AI is changing the game for legal teams in our recent webinar, How AI impacts your contract management process - separate fact from fiction.