AI is well and truly making its mark in contracts in the form of contract intelligence. But you might well be wondering which contract types are seeing the greatest AI usage. We wondered that too, which is why we included that question in our exclusive report on the state of AI in contract management.
In this article, we’ll cover:
Which contract types are companies using AI for?
Why is AI being used in different contract types?
What could the impact of the use of AI in these contract types be?
Which contract types are companies using AI for?
Before we get into that question, let’s take a quick look at our numbers. We surveyed hundreds of people at companies across the Nordics (bar Iceland), the Netherlands, France, the UK and the US. Among the questions we asked them was: In which types of contracts is AI technology most commonly incorporated? It’s the answer to that question that we’ll look at here.
30% of respondents said that they were using AI contract intelligence in low-risk contracts. These could be things like renewals for long-term clients, or for contracts with low deal sizes, such as small self-service purchases.
25% used AI for service agreements, as it can assist optimization of service contracts. These are important in any organization, but can become crucial depending on which kinds of services an organization is selling. This figure of one-quarter suggests businesses are already seeing huge benefits of letting AI take care of the difficult, time-consuming work of checking contracts.
A little more than one-fifth of all respondents are also using AI contract intelligence for their employment and purchase contract types. These numbers suggest that companies are already seeing the value of using AI to speed up their internal contract processes. This is good, not only for saving time, but also for helping the bottom line. When purchases can be made more quickly, and new employees can start adding value more quickly, it’s great for business.
So now that we know which contract types companies are using AI for, let’s look at how they’re using it.
Read also: What is contract management? Your ultimate guide
Why is AI being used in different contract types?
This will vary from organization to organization, as AI contract intelligence can be adapted to meet your individual business needs. With lawyers using 40% – 60% of their time drafting and reviewing contracts, there is a huge use case for AI across various industries and types of businesses. But these are the key ways in which many businesses are using AI in different contract types.
So, without further ado, here are the key ways organizations are using AI in their different contract types.
Save on legal costs: Whether you have an inhouse legal team or use an agency, legal services aren’t cheap. After all, you’re paying for someone’s expertise. This is the key part here: AI isn’t going to replace this expertise; it’s going to enhance it. Think of it this way. Your legal expert has to look through each and every word across all contract types, making sure that it’s correctly conveying each relevant regulation. AI contract intelligence technology, such as Oneflow’s AI Review package, can help spot any mistakes or inaccuracies in mere minutes.
Get your vital contracts ready for use faster: Instead of waiting days or even weeks, AI can have various contract types ready-to-go in just a few hours. Instead of having to subject your legal expert to hours or even days of pouring through every last word in a given contract, you can instead go to market with them in just a few hours.
Continually align your contracts with the latest regulations: Laws change. Sometimes, it’s a flagship national change. Other times, it’s something more local. Some come with months, or even years, of warning; other changes come with very little notice. AI used across contract types can identify where your contracts don’t align with the latest changes and tell you exactly what needs to be edited and where, helping you to keep up with the latest regulatory changes.
These are just three examples of how using AI in your contract types can be great for business. There are, naturally, lots more use cases, including ones that are specific to your industry. If you’d like to find out more about AI Review and how it can help you with your contract types, reach out to us. We’re more than happy to help.
Read also: Why Oneflow is a contract management platform for everyone
What could the impact of the use of AI in these contract types be?
A lot of the answers to this question are unknown. AI contract intelligence is rapidly evolving, and we’re only just scratching the surface of what it could be used for. That being said, there are a few things we do know about how it could impact different contract types.
Let’s take a look at those three contract types again.
Low-risk contracts: For those low-risk contract types, like small deal sizes or renewal of happy customers, it’s looking increasingly likely that companies will happily let AI take care of it. Finding flaws and tweaking clauses will no longer have to be done by hand.
Service agreements: If these agreements are for smaller services, then this is one of the contract types that will definitely become automated. After all, it makes sense. Why ask your legal team to pour over it when AI can help them catch any possible mistakes or errors in minutes. This is one of the contract types that is ripe for AI automation.
Employment and purchase contracts: These contract types are extremely important. However, they’re generally identical beyond personal details. Employment contracts, in particular, only need to be changed. AI can help manage any changes in these contract types, and keep them evergreen for longer.
Read also: What is contract lifecycle management? A complete guide
The key takeaways
People we surveyed are already using AI contract intelligence to assist them with various contract types. In particular, their low-risk contracts, their service agreements and their employment and purchase contracts. This is because AI can help find and identify mistakes and errors at scale. Your legal team no longer has to spend hours or even days pouring over their contracts.
Curious to see how AI can benefit your business? Click here to find out more.
