“For CLM, AI and ML are no longer ‘nice to have’ capabilities to help solve challenges such as contract document e-discovery, deduplication, clause extraction, and smart recommendations based on contract type.”- Forrester
Legal departments are updating their legal processes by digitizing. When a legal department digitizes, they introduce legal technology that has been optimized to automate tasks, review contracts, or redline parts of contracts, for example. With Contract Lifecycle Management (CLM) solutions, legal departments can digitize and refresh their manual processes or current legal technology.
Taking Contracts Digital
By digitizing contracts, legalease departments can streamline their contracts processes. Digitizing contracts involves Artificial Intelligence and Machine Learning to extract data and capture it from contracts to create useful insights and metrics. Although used interchangeably, the term digitalizing is used specifically to define the automation and streamlining of contracts workflows and processes.
- Digitizing Contracts
The first step to digitizing the contracts process is by moving all contracts to a single repository. All physical contracts are scanned and then their digital copies are uploaded to local servers and ideally to cloud computing systems.
There are two ways to input contract data, with the first way being through optical character recognition (OCR). The second way is by using the intelligent character recognition (ICR) technology to scan, identify, and upload text.
- Automating Contracting Tasks
Although the term automation is gaining popularity in the contracting space, it is a highly underrated process. By automating contracts tasks, legal departments can be assured of error-free and accurate outputs, while being able to clear their to-do lists to focus on more pressing matters for their company.
- Leveraging AI and ML
AI and ML have brought about a seismic shift across the legal world in terms of legal technology transformation. Predictive intelligence, natural language processing (NLP), and generative artificial intelligence are redefining the way legal data is identified, captured, processed, and utilized. The use cases of these AI and ML capabilities unlock exciting and beneficial applications such as predicting which way a case will swing, forecasting litigation case payouts, and mining legal data for valuable insights.
CLM platforms unify contracts and other legal data onto one handy dashboard. This allows legal departments and other teams easy access to contracts, and enables communication and collaboration across the organization. After all, the role of the legal department is to help the company stay compliant with regulations and to iron out any legal issues they may run into. A single CLM platform offers greater transparency and a way for legal to share information quickly, and reliably.
Contract digitization boosts the legal department’s efficiency, helps manage contracts, and mitigates the risk of human error such as oversight. In addition, legal departments can collaborate with the rest of the organization and meet the company’s goals.
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