Why AI Is the Best Contract Negotiation Lawyer
The future work of a contract negotiation lawyer is rapidly changing. Forward-thinking legal departments have begun utilizing artificial intelligence (AI) to successfully negotiate cost-effective contracts aligned with company playbook standards. The transition marks a dramatic leap forward for automated contract review and negotiation.
How AI Outperforms the Best Contract Negotiation Lawyers
As legal departments consider ways to improve the quality of their work while reducing expenses, they must eventually consider the following question: should they hire and train more document reviewers or invest in technology to streamline and automate the review process? Every legal department has its unique needs, but the following three considerations—consistency, speed, and cost—make a compelling case for AI.
Relying entirely on lawyers and legal staff for contract review and negotiation opens the gate to potential errors. Like anyone, lawyers sometimes feel tired, stressed, hungry, burnt out, or distracted. At these times, it can be easy to overlook ambiguous language or omit necessary agreement terms.
An AI contract review platform can enhance the accuracy and consistency of your agreements by:
- Conforming to Digital Playbook standards that ensure crucial provisions.
- Applying best practices garnered from previous successful agreements.
- Allowing teams to specify which clauses to automatically require, accept, reject, or flag.
The most innovative AI platforms not only flag ambiguous language and potential negotiation bottlenecks but can also offer suggested revisions based on your company’s guidelines.
Corporate attorneys spend countless hours proofreading agreements to ensure all necessary clauses are included and potentially risky sections are flagged before passing the contracts to senior reviewers for further consideration. It can take weeks to finalize an agreement.
Advanced AI-powered platforms might take only a few minutes to complete document review and contract negotiation for most standard agreements. And these potential time savings become even more impressive when multiplied across hundreds or thousands of contracts a department negotiates in a given year. Over the last few years, advances in AI, machine learning, and natural language processing have made AI a viable alternative to hiring more staff.
The costs associated with adding a contract negotiation lawyer can be staggering. Below is a breakdown of these costs gathered from recent reports.
- Cost to recruit one first-year associate: $250,000
- Cost when one associate leaves: $400,000
- Annual attrition rate: 17%
- Contract review attorney salary: $109,726
- Client cost for review: $300 to $1,000
- Client cost for negotiation: $500 to $3,000
Turnover in legal departments and law firms, especially among new hires, is at its highest level ever. The top 400 law firms lose roughly $9.1 billion a year on the cost of hiring, training, and attrition. Beyond the dollars and cents, turnover hurts the quality of work, department culture, staff morale, and reputation.
Not only is AI a victory for time-strapped lawyers, but the AI frees attorneys from the manual, repetitive labor inherent in routine contract review. Legal departments can make strategic and competitive moves while saving money.
Consider this: only 28 percent of legal departments are hiring, even though two-thirds say there is an increased amount of legal work. Some 49 percent of law firms say they are using technology to overcome human resources challenges and improve efficiencies.
Before You Hire, See How LexCheck Fits Into Your Workflow
Artificial intelligence enables human lawyers to work faster and focus their attention directly on the critical business areas in an agreement. By leveraging AI technology, legal departments can reduce legal staff burnout by unburdening lawyers of the tedious and repetitive aspects of contract review. Instead, attorneys can focus on more impactful business objectives.
LexCheck is a contract negotiation platform offering true AI-powered, attorney-quality review and markup. The process is simple: attorneys upload or email agreements to the platform, and the AI returns edits (in just a few minutes), enabling your legal department to negotiate playbook-compliant deals faster.
Gary Sangha | Founder & CEO
Gary Sangha is the Founder and CEO LexCheck. He's a serial entrepreneur and an academic. Gary previously founded Intelligize, a legal technology company that was acquired by LexisNexis. He's affiliated with the University of Pennsylvania and Stanford University and started his career as an attorney at Shearman & Sterling and White & Case.