For lawyers, the big lesson of COVID is that technology is essential to your business continuity and future success.
That’s especially true for firms that practice business, corporate and transactional law.
“The legal industry has consisted of manual and siloed processes, historically speaking,” according to lawyer and tech expert Matt Gould. “But the average Fortune 500 company can have as many as 40,000 active contracts at any given time, and the consequences of one little mistake can be rather high. That is why using legal technology and making artificial intelligence (AI) a part of your contract management process is crucial. With such automation, legal teams are able to have unlimited access to — and control over — contracts, as well as mitigating risks, cutting costs, and freeing up their time for higher-value, strategic work. They can also shift the perception of in-house legal teams from a cost center to a total value center.”
Bottom line: the old days of manual systems and physical documents are gone. The strategic use of contract management tools will increase efficiency, save money, reduce errors and make clients happy.
Another takeaway, according to Gould: innovation is no longer an option.
In his article, he cites a recent survey in which more than 80 percent of law firm leaders say they plan to implement innovative AI solutions in their firm. Those firms that are already using AI say it is “critical” to keep doing so.
“The reality is that as companies scale, so will the need for legal technology that supports their individual growth — and inevitable expansion,” according to Gould, who runs the in-house legal team at ContractPodAI.
Read his article How AI and Automation are Transforming Legal Teams here.
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A Better Way to Manage Contracts
More than 7 out of 10 companies use old-fashioned, manual processes when it comes to drafting, negotiating and reviewing contracts. They’re making a mistake, says Gould. An AI solution could save then tons of time and money.
“By adopting end-to-end contract lifecycle management (CLM) solutions, though, they can reduce pressure on the legal department,” he writes. “With a controlled negotiation cycle, a common approval workflow, and an industry-standard, integrated electronic signature system, more specifically, they are able to focus on more strategic matters.”
Here are three other benefits of automated contract management, with quotations from Gould’s article.
- Remote work. “One of the many benefits of contract automation, though, is that legal teams can have unlimited access to contracts. This enables them to work anytime and anywhere — when access via digital platforms is more important than ever before.”
- Reduced costs. “On average, agreements cost $6,900 but can reach as much as tens of thousands of dollars to generate. Though legal teams are commonly referred to as a “cost center,” the reality is that automation can help change this perception by making contracts easier to understand and more standardized. End-to-end CLM technology also leads to the quicker creation of contracts and reduces production costs, while serving companies’ overall objectives.”
- Decreased risk. One study showed that 64 percent of all US state court cases involve contract disputes. “To mitigate the risk associated with contracts, then, companies tend to purchase insurance. But through the use of AI, legal teams can quickly find outliers, spot risky clauses like limitless liability, improve compliance consistency and never have to worry about contract mismanagement.”
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