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Unleashing the power of GenAI in contracts management
Gabriel Buigas |
May 22, 2024 |

 14,890 total views

Eight ways to improve legal and compliance risk management

Corporate interest in AI, particularly generative AI (genAI), has surged dramatically. For many legal teams, there is pressure all the way from the C-suite to start using this new technology. However, the process of identifying use cases can feel like uncharted territory, fraught with indecision and concerns about technology readiness, defining internal appropriate use protocols and deciding whether and how to invest in any of the applications being offered.

The potential benefits are too great to ignore –automating time-consuming tasks, transforming knowledge management, and augmenting productivity of existing legal resources. It is only by engaging with GenAI that a true understanding of capabilities, use cases and required skill sets can be built. This post will detail three ways legal departments can create forward momentum today in using GenAI to deliver tangible value to legal teams and clients. Because current GenAI capabilities are very applicable to contracts support, we will begin our journey here.

Quick Wins

A: Redlining Third-Party Paper

Surveys over recent years have indicated that in-house legal teams feel overwhelmed by the amount of work piling up on their plates. This has been exacerbated by companies instituting hiring freezes and cost cuts as they navigate current environments, compounded by concerns about over-hiring during the Covid pandemic and about the impact of GenAI on future workforce composition.

A quick win for overworked teams relates to third-party paper received from contracting counterparties. Third-party paper has historically proven to be a real burden as most CLM systems don’t handle it well, many of the terms don’t conform to company standards and thus, are often assigned to the internal legal team to manage. Today, GenAI enables the ability to quickly do a first-pass review using client standards, significantly reducing the time spent negotiating terms and improving both responsiveness and the amount of time needed to complete a negotiation. This functionality is available today.

B: Legal Helpdesk

Legal departments have long battled the challenge of creating self-help tools for frequently asked questions about corporate and legal policies and procedures. The issue with past efforts is that the tools created were often static and frequently outdated as assigned SMEs moved on to other roles or were dealing with more urgent matters. Today, with GenAI and the ability to query documents in natural language, there is an incredible opportunity to increase the effectiveness of a Legal Helpdesk. Identifying areas where people have frequent questions, and then building appropriate responses to those queries, will enable businesses to move forward quickly and manage compliance risks. The ability to create such a Helpdesk exists today. This is a great tool for enhancing the overall productivity of the legal team.

C: Contracts Analytics

Despite the pervasive implementation of CLM tools and initiatives to consolidate contracts into a central repository, the truth is that much of the contracts portfolio for a company remains scattered and with limited ways to extract useful data. Required data can be as simple as understanding payment terms across customer/vendor contracts or understanding lease obligations from a large portfolio of offices and sites for a global company. The good news is that today’s GenAI technology offers a significant improvement over traditional AI in the ability to extract information from a contracts portfolio. The ability to do so and solve for pressing business needs represents a compelling opportunity for the legal function to add value. This capability exists today.

Faster, Safest Route: Leverage a GenAI-Enabled Services Provider
For companies that need to do more with less and see GenAI as the means to that end, the most expedient route is to partner with a GenAI-enabled legal services provider. In doing so, you remove the time-consuming task of vetting the myriad of tech solutions and going through the procurement, implementation, training, and change management processes. Additionally, service providers have access to a pool of resources skilled in both contracts and the use of GenAI to execute on any of the above-listed quick wins.

Once you discover the capabilities of GenAI-enabled offerings, there is always the option to insource technology and have internal legal resources drive transformative initiatives and use cases. However, you need to get in the game now. Learn what GenAI can do for you, work on use cases with your service provider, and learn the skills necessary to further capitalize on its uses. The key is to engage sooner rather than later so that you can better influence selected tools and initial set of use cases.

Auhtor: Gabriel Buigas

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