Harnessing Cloud-Based AI Benefits for Corporate Contracts

May 18, 2021
May 18, 2021
Gary Sangha | Founder & CEO

Over the past year, corporate legal departments have experienced a pandemic-induced shift in contract management processes. Tasks previously completed in boardrooms and offices suddenly moved to digital environments. For traditional legal operations, this transition has signaled a paradigm shift. 

Illustration of tech-enhanced brain shows cloud based AI benefits

Cloud-based AI benefits proved how companies could overcome challenges related to the pandemic while at the same time improving traditional processes. The successful adoption of these legal tech innovations could represent a long-term change rather than a temporary solution.

Shifts in the Legal Industry

Throughout 2020, many legal departments significantly adjusted their standard processes. Some of the more challenging aspects of these adjustments were outlined in Thomson Reuter’s 2021 State of the Legal Market Report. Among the issues noted were the following: 

  • Reduced staff: Departments faced serious challenges that required cuts to positions across the board. About 36 percent of legal departments reported laying off legal support staff, while 11 percent also laid off fee earners. 
  • Changing demand: While the daily need for lawyers dropped by about 3 percent across departments of all sizes, some legal niches experienced increased demand. Many corporate and labor departments expanded their offerings to accommodate these changes.   
  • Remote work:  Remote work greatly benefitted the workforce during the pandemic, and opinions of it have shifted significantly. Pre-pandemic, only 37 percent of attorneys had an interest in telecommuting. Since mid-2020, that number has increased to 76 percent. 
  • Increased technology adoption: Eighty-four percent of legal management expected their companies to invest more in technology. Legacy systems no longer supported workers the way that cloud-based software-as-a-service offerings could. 

In addition to the issues covered in the report, legal departments also discovered the flaw of expecting overworked attorneys to negotiate agreements within unrealistic deadlines while depending on contract templates and a novella-sized playbook to guide them on their company’s preferred negotiating positions. 

Many of these contracts were drafted before the pandemic when no one anticipated such a business crippling event and not including the company’s standard negotiating position on force majeure was a harmless omission. As such, they had no provisions in place for what would happen for missed deadlines, closed businesses, and lost revenue. In light of failing to negotiate for a simple and relatively non-controversial provision, legal departments realized the benefits of cloud-based AI solutions.

How Cloud-Based AI Benefits Contract Review

Cloud-based AI helped corporate legal departments recover from the challenges created or exacerbated by the pandemic—especially for contract management, where the AI can review, redline, and make contract suggestions on par with their own top-tier attorneys. The table below describes a few ways AI assists in-house legal departments in contract review: 

Reduced staff stress

Accelerated turnaround

Improved results

Lawyers and support staff have been forced to do more with less during the pandemic, and this has resulted in increased stress and workplace morale issues. Contract review can become a time sink for attorneys, as they must fastidiously review each clause and section. A quality review can take hours, or even days, to complete. Artificial intelligence can help reduce legal staff stress by replicating the accuracy of a top-tier attorney while completing the review in minutes. 

Legal departments aim to minimize time spent on administrative tasks like contract review. Cloud-based AI enables legal departments to review contracts from anywhere and complete a thorough analysis in only a few minutes. It can also help accelerate negotiations by highlighting focus areas to ensure adherence to negotiation playbooks. Utilizing an AI-enabled platform can reduce negotiation time by over 50 percent.  

Negotiating guidelines can be time-savers—after all, you shouldn’t have to reinvent the wheel every time an NDA is needed. However, overreliance on outdated, dense, and paper-based guidelines can cause attorneys to miss vital clauses. An AI platform will review these contracts, assess risks, and consider opportunities. It may, for example, recommend adding a force majeure clause to limit liability in the event of extraordinary circumstances. 

Cloud-based AI benefits for contract review and negotiation can enable law firms to overcome many of the issues resulting from the pandemic. AI-powered platforms are accessible from anywhere, which makes them perfectly fitted to remote work. These cloud-based platforms can also provide support for overworked staff and allow firms to reallocate resources. This innovative technology has proven itself as a game-changer for the legal field, and its impact will help create the “new normal” of the post-pandemic legal operations department.

LexCheck offers a cloud-based AI platform to improve contract review processes and enhance negotiations. Our innovative tech can be a game-changer for overworked legal departments. To discover our solutions, request a demo or contact us at sales@lexcheck.com.

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