Since ChatGPT launched at the end of 2022, AI has been generating some serious buzz. But just how is AI changing contracts? Much like its possible applications to just about everything, AI is a gamechanger. Here, we’ll look at just how AI is changing contracts.
In this article, we’ll cover:
- Draft contracts with AI
- Remove contract admin with AI
- Which AI tools are changing contracts?
- What are the benefits of how AI is changing contracts?
- How AI is changing contracts in the future
But before any of that…
What is AI?
AI stands for ‘artificial intelligence’. It refers to a range of computer programs and softwares that can do tasks that would normally require human intelligence to complete. In essence, AI software is programmed with logical algorithms that give them the ability to “think” and act appropriately.
AI has been around for a while, but it was the launch of ChatGPT in late 2022 that really led to its big breakthrough. We’ve probably all had at least a few goes on ChatGPT by now. So whether you find it fascinating, slightly terrifying or are indifferent toward it, we can all agree that we’re only just scratching the surface of what AI can do, especially in contract management.
So, without further ado…
1. Draft contracts with AI
Drafting contracts, whether it’s an ongoing process, or a one-time event for a template, is time consuming. That’s where AI comes in. It can help you draft complaint templates and to-go contracts in just a few moments.
Long gone are the days of old workflows. When you had to type a contract, or, at the very least, copy-and-paste it, then edit it. It takes time – too much time. Now with AI, you can cut the creation and approval process from hours or even days, to mere minutes.
Oneflow comes with an AI Assist feature. All you need to do is tell it what sort of contract you need and in which jurisdiction, and then the AI will do the rest for you. You can have a contract ready to go in moments.
2. Remove contract admin with AI
It can be oh so easy to lose contracts and mix them up. Filing systems, even virtual ones, can very quickly get complicated. Soon, only a handful of people at your organization will know how to find them. That’s where AI can help.
AI can automatically tag a contract, so you know exactly where you need to store in your digital archive. You can then search by that tag to find any given contract in just a few moments.
With AI, it’s never been faster or easier to manage your contracts.
3. Which AI tools are changing contracts?
It’s not so much individual tools that are how AI is changing contracts, but aspects of what AI can do. Here are just a few example:
- Contract analytics: AI-powered contract analytics tools can analyze large volumes of contracts, identify patterns, and extract critical information to help businesses make informed decisions.
- Natural Language Processing (NLP): NLP tools can understand and process natural language text in contracts, making it easier for businesses to search and identify relevant clauses, obligations, and risks.
- Contract automation: AI-powered contract automation tools can generate contracts from templates, reducing the time and effort required to create new contracts.
- Contract review: AI-powered contract review tools can help businesses identify errors and inconsistencies in contracts, reducing the risk of errors and omissions.
- Contract extraction: AI-powered contract extraction tools can automatically extract relevant data from contracts, such as names, dates, and key terms, making it easier to analyze and manage contracts.
Remember, we’re only scratching the surface of what AI could ultimately do when it comes to contracts. So, these are only a few of the possible uses of AI, even just a year from now.
Read also: Announcing AI Assist by Oneflow
4. What are the benefits of how AI is changing contracts?
AI comes with a lot of benefits for your organization and your personnel. These are just a few of the ways in which AI can benefit your business:
- Less human error: It’s happened to all of us. We’ve stored a Google or Word Doc in the wrong place, or filed it incorrectly. With AI, that can be a thing of the past. Your contract database will be entirely automated by AI.
- More time: With less time spent on manual admin tasks, your sales team will have more time to do what they do best: sell.
- Fewer internal stakeholders: When it comes to contract databases, there may only be a few people within your organization who have a full working knowledge of the database, putting a greater burden of work on them. With AI, everyone can easily and simply access contracts.
- No more lost documents: We’ve all given a document an unclear title, or forgotten what we called a doc. When you’re trying to quickly pull up a contract, that can be a nightmare. With AI, you can search using a simple, logical naming convention, or, better still, tags.
5. How AI is changing contracts in the future
The future is a great unknown when it comes to AI. But we can take a look at some ways that AI can impact contracts and their management:
- Contract drafting: AI-powered contract drafting tools could analyze data from past contracts and provide suggestions for clauses, language, and other terms. These tools could also help ensure that contracts comply with legal requirements and industry standards.
- Contract review and analysis: AI could be used to review and analyze contracts, identifying potential risks and areas of concern. This could include identifying clauses that may be missing or that could be improved, as well as flagging clauses that could pose legal or financial risks.
- Contract management: AI could assist with contract management by automating routine tasks, such as tracking deadlines, managing renewals, and monitoring compliance. AI-powered contract management systems could also provide real-time analytics and insights into contract performance, helping organizations make informed decisions about future contracts.
- Contract negotiation: AI could assist with contract negotiation by analyzing data on similar contracts and providing recommendations for optimal negotiation strategies. AI-powered negotiation tools could also analyze the language and terms of contracts in real-time to provide feedback and suggestions during negotiations.
- Contract dispute resolution: AI could be used to analyze contracts and other relevant data to help resolve contract disputes. For example, AI-powered tools could help identify clauses that are ambiguous or that have multiple interpretations, helping to resolve disputes more quickly and efficiently.
In fact, some of these benefits are already a reality. Find out more here.