Matt Gould, Head of Legal Transformation at ContractPodAi, delves into the latest trends in legal tech below. What are the benefits of transitioning away from traditional contract management processes and adopting AI and automation?
The age of automation has been upon us for a number of years now, but the legal industry in particular has been less inclined to adopt and implement this new technology. Prior to the COVID-19 pandemic, legal teams’ success was possible despite how little they used advanced digital tools.
Nevertheless, companies are evolving quickly during this time of crisis, which has only increased the need for legal automation. If the pandemic has taught us anything, it is that technology is critical to companies’ productivity, business continuity and overall sustainability.
The legal industry has consisted of manual and siloed processes, historically speaking. 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 centre to a total value centre.
Time Management
It may surprise you to learn that the majority of medium and large companies still have manual contracting processes — more than 70%, in fact, according to Gartner. Perhaps the most time-consuming responsibility for legal teams is the management and manual review of contracts and related documents. By adopting end-to-end contract lifecycle management (CLM) solutions, though, they can reduce pressure on the legal department. 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.
Perhaps the most time-consuming responsibility for legal teams is the management and manual review of contracts and related documents.
Given the importance of moving an agreement forward in a timely manner, deploying legal technology to lessen — and even eliminate —the time-consuming work around them not only benefits legal teams, but also the wider organisation.
Productivity from Anywhere
For some industries, the shift to remote work was a near-seamless transition. Unfortunately, this was not the case for legal. Remote work has presented a challenge for lawyers, as many contracts still consist of physical documents and files or are stored digitally within on-site servers. 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.
Granted, the use of tools like Excel and cloud storage for contract management is a small step in the digital transformation journey. However, using end-to-end CLM technology will take general counsels (GCs) and legal teams even further along the path.
Lowered 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 centre,” the reality is that automation can help change this perception by making contracts easier to understand and more standardised. End-to-end CLM technology also leads to the quicker creation of contracts and reduces production costs, while serving companies’ overall objectives.
Reduced Risks
Due to the high volume of contracts within a company, as noted above, mistakes are inevitable. These mistakes include losing contracts, with 12 to 15% of all contracts being reported as lost or unaccounted for, according to the Aberdeen Group. The consequences of such errors can be extremely serious and, oftentimes, leads to lawsuits. In fact, according to Gartner, “contract disputes represent 64% of cases in (US) state courts.” 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.
According to Gartner, “contract disputes represent 64% of cases in (US) state courts.”
Total Control
Finally, CLM systems offer legal teams total control of their contracting ecosystem. They allow for approvals across the organization while setting up processes to request, produce, negotiate, analyse, sign, and manage companies’ agreements.
As long as this legal technology continues to digitally transform organisations’ systems and processes, it will go on disrupting the legal industry in new and exciting ways. In the end, such legal digital transformation will not only refine, but also redefine the legal profession. But adapting to new technology certainly requires change management and an alignment with forward-thinking partners and customers. This enables all parties to manage contracts and related documents, and overall business operations, with the future fully in mind rather than being held back by traditional contracting processes.
Indeed, innovation is no longer merely a choice. In a World Commerce and Contracting survey, the majority of respondents acknowledged the need for contract management technology. In fact, more than 80% indicated that they have already implemented automation solutions or have plans to do so. Respondents who currently utilise automation in their contract management systems (CMS) said they considered the disruptive technology to be ‘business critical.’
So, it may not seem like a must-have for your business right now. However, the reality is that as companies scale, so will the need for legal technology that supports their individual growth — and inevitable expansion.
Matt Gould, Head of Legal Transformation
5 Merchant Square, 7th Floor, London W2 1AY
Tel: +44 (0) 207 096 1401
Matt Gould is the Head of Legal Transformation at ContractPodAi and leads the firm’s legal teams. He brings over 20 years experience as a general counsel leading global in-house legal teams in the telecommunications and tech sectors. Previously, he was General Counsel for EMEA at Telstra and General Counsel at LycaMobile.
ContractPodAi is a well-established leader in end-to-end contract lifecycle management, harnessing the unrivalled AI power of IBM Watson and Microsoft Azure to lead corporations around the world. From its London headquarters and global offices, ContractPodAi amplifies businesses’ readiness through partnerships with complementary technology providers including IBM, Microsoft, DocuSign, and Salesforce. ContractPodAi is also the recipient of several awards and has been named a Visionary in the 2021 Gartner Magic Quadrant report for Contract Lifecycle Management.
