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How to Get Started with Contract Analytics for Lawyers

In 2018, aMcKinsey study found that poor contract management and analytics meant that firms could be losing as much as 9% of the contract's value.

For the 2020 Fortune 500, that equates to $1.23 trillion of potential lost value.

The reality for most firms and corporate lawyers is that if you don’t stay on top of contract management, you could be losing significant sums every year.

How to Get Started with Contract Analytics for Lawyers: eAskme
How to Get Started with Contract Analytics for Lawyers: eAskme

Contracts form the foundations of almost all transactions yet come with a hefty price tag for time and effort.

Firms enter thousands of contracts a year and it has become a true challenge. Renewal and renegotiation oversights are commonplace because lawyers just don’t have the time.

But if the LawGeex study shows how AI runs contract analytics in 0.004 of the time it takes trained professionals, it is time big firms sat up and assessed their options.

What is Contract Analytics?

Contract analytics is the digitizing of the review process using legal document software.

It introduces machine learning AI to help lawyers identify specific data, renewal dates, clauses, terms, and other elements of critical information. The software can be used at any stage of the contract lifecycle on a large scale.

The AI is run on a machine-learning algorithm that analyzes every part of a contract searching for mistakes, facts, and figures, and assessing against pre-approved templates.

Every facet of the contract becomes searchable allowing the person responsible to drill into any detail needed.

The AI does this by applying natural language processing (NLP). NLP uses a text-based approach to surface high-value information for review.

It even applies optical character recognition machine learning to convert images into searchable text.

What are the benefits of Contract Analytics?

Contract analytics AI gives you visibility, control, and efficiency in multiple areas of contract analysis.

1. Improve Risk Management

Contracts tend to breed an adversarial image. The general purpose is to enforce an agreement and provide a legal remedy in cases where one party defaults on its promises. Their very nature suggests risk.

From a top-level, a solid contract analytics software will scan documents for risky clauses and data especially with suppliers operating in markets with considerable risk or changeable regulation.

It also allows you to identify and manage risks around off-contract buying, deviations from standard operating procedures, and cost overruns.

Strict machine learning software will help you in the process of vetting your potential suppliers so you don’t suffer because you don’t have enough time for thorough due diligence.

Lastly, contract analytics help remove the risk surrounding ambiguity and inconsistency in terminology.

In broad, lengthy contracts it can be easy to make mistakes that go unnoticed without the use of AI.

When you build contracts from scratch or review often, AI helps ensure consistent language reducing ambiguity risk.

2. Tracking Expiry and Renewal Dates

If your firm had the option to renegotiate on every contract at the renewal date, you could be guaranteed to make significant savings. However, size often means you forgo those chances.

Contracts rumble forward without your intentional consent to legacy terms.

One of the least appreciated features of contract analytics is the ability to monitor all expiration and renewals so that contracts don’t auto-renew or lapse without your noticing.

AI sends you alerts to the renewal and a summary of the contract performance and compliance to vastly expedite renegotiation.

3. Contract Fulfillment

When your firm grows, it can be hard to monitor every individual milestone in the millions of contracts you enter. Analytics does it for you.

By setting alerts when significant milestones are due, you can always keep abreast of imminent deliverables.

Similarly, CA tools can issue alerts to other contracted parties who are expected to provide results.

Although simple; reminders and alerts can stop deliverables and milestones from becoming oversights. Oversights always come with costs, disputes, and losses but these are all mitigated easily.

Top Contract Analytics Tools on the Market

Loio

G2 named Loio as number 2 in the list of best free contract analytics software.

Loio generates an easy-to-use map of your contracts using supercharged artificial intelligence contract analysis.

It works as a Microsoft Word add-in and can scan legal documents providing one-click solutions without any hassle involved.

It takes 5 seconds to scan 13 key detail groupings in any legal document. Reviewing your ongoing contracts is made simple and secure.

Ultria

Ultria Orbit AI is a free-standing contract analytics system that can integrate with an existing CLM or document management system.

The savvy machine learning algorithm extracts details on clauses, dates, parties, and more in thousands of contracts.

The AI even understands the intent of your terms and clauses which gives you an edge for compliance.

Their confidence in the tool is exemplified in the ROI calculator.

ThoughtRiver

ThoughtRiver approaches analytics from the document management end providing users with intuitive dashboards that make viewing your risk portfolio and important days easy.

Beyond renewal status, the dashboards analyze the risk position of all contracts with the option of digging into which clauses have been used and graphing the room for improvement.

Conclusion

Large corporate clients are facing turbulent economic times and will be looking for cost savings and additional value from every department and vendor.

If lawyers are to stay ahead and find such economic efficiencies, contracts provide the best avenue of doing so.

However, law firms can’t generate these values by hand. There are simply too many contracts to review. This is where contract analytics steps in.

AI software that scans the current suite of contracts, streamlines the document generation process, and gives companies hundreds of extra productivity hours is a major weapon in your attorney arsenal.

Going forward,the future of law features heavy automation, and the benefits of adding value and de-escalating portfolio risks will be a major demand.

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Gaurav Kumar

Gaurav Kumar is the founder of eAskme.com. He is the professional blogger, writer, motivational speaker and online. He the man behind "Blogging for money guide" and "complete domain name guide". eAskme will help you to become an online entrepreneur. You can learn SEO, Money MAKING, SEO, blogging and more.

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