Legal Teams play a vital role within organisations and are responsible for managing contracts, tracking and monitoring the terms thereof. This is known as Contract Management. Artificial Intelligence (AI) is gaining prominence and is no longer a futuristic concept. With that in mind, it is important to analyse how AI may impact the way in which Contract Management is handled.
To mention a few, poor contract management may have the following impacts within an organisation:
- Renewal dates that are missed can lead to costs incurred and potential disputes.
- Failure to stay updated with legislation and regulations may lead to non-compliance. This means the possibility of penalties and legal action, which are also costly.
- The approval and/or negotiation process may take longer than expected, which can lead to unnecessary delays. In certain cases, contracts may be required to be amended, and it leads to multiple versions of the same contract being circulated.
All the above occurs simply because the process of contract management is a human one. Although certain organisations may from time to time opt to rely on systems to bridge this gap, it remains to be a costly and inefficient process.
The benefits of utilising AI for contract management purposes:
- Enhanced security.
- Reduction in errors, such as conflicting version numbers.
- A centralized platform allows for increased efficiency.
- Real time compliance insights.
- Risk reduction.
Essentially, the collaboration between human contract management and AI may prove to be the true notion of effectiveness and efficiency.