AI: Lawyers moving up the value chain
More than a quarter of corporations using artificial intelligence (AI) software to review contracts are doing so for Brexit-related reasons but the technology will not remove the need for lawyers, new research has found.
The survey also concluded that a frequent misunderstanding about contract AI – which intelligently scans clauses in legal agreements instead of needing to manually review every one – was that it worked ‘out of the box’ without being trained.
The survey was a qualitative review of 30-40 hours of interviews with 30 decision-makers in corporate law departments, mostly from Fortune 1000 companies, all but one of whom was a lawyer and 83% of which were in the US.
It was undertaken on behalf of contract analytics specialist Seal Software, which was founded in the UK.
It found that nine out of 10 of contract AI users were doing so in a variety of risk assessment, sourcing and contract management areas, while over eight out of 10 were focusing on compliance and procurement.
Over half (55%) cited compliance with the General Data Protection Regulation (GDPR), 45% non-disclosure agreements or procurement/vendor contracts, and 27% Brexit.
The author of the report, lawyer turned analyst Ari Kaplan, said a common misconception about contract AI software was that it would replace lawyers, yet “human input and human review” would be necessary, “probably forever”.
Corporate legal departments needed to be reassured the software would not “completely replace human talent”, he urged.
However, as one survey participant said, after adopting the technology: “Now, we don’t need to rely on a lawyer to insert an insurance clause or a limitation of liability clause because the system knows the specific provisions that are appropriate for which types of contracts.”
Another pointed out that it freed up experts for more important tasks: “If you are saving time and ensuring accuracy, it moves people up the value chain so they can do more important things.”
Other findings noted by the survey were very high levels of executive buy-in at the top of corporations, and that law departments were “driving the use” of contract AI.
All of those companies already deploying the technology planned to expand its use in the next year, while many of those not yet using it planned to do so.
Ulf Zetterberg, CEO and co-founder at Seal Software, added: “Many companies are achieving impressive results using contract AI across common use cases, from data extraction and procurement to applications in financial services and regulatory compliance, and there are even more dramatic changes ahead.”
- Legal Futures is holding a GDPR, e-Privacy and Cybersecurity Masterclass in London on 2 April, with some of the leading figures in the field. Click here for all the details.
Interesting read.. AI definitely helps in better GDPR compliance and more…