Global News
An authoritative legal-industry report on the current state of artificial intelligence in contract analysis and data extraction, and its applications within the legal community was released today. Leading industry analyst firm Ari Kaplan Advisors was engaged by Seal Software to design and conduct unbiased research.
The findings provide clarity on how legal departments at large corporations perceive and practically apply AI-driven contract analytics in a broad range of matters.
The report is derived from comprehensive interviews with professionals, predominately at Fortune 1000 organizations, whom exercise influence over the adoption and deployment of AI technology. Law department leaders from American Express, Hewlett Packard Enterprise, Nokia, Novartis, Atos, Transocean Ltd., SI Group Inc., CyrusOne, PagerDuty, and Olympus Corporation of the Americas, among others, shared their views in the benchmarking study. All but one of the participants were lawyers, about two-thirds of which were with organizations that had more than $5 billion in revenue, and most worked at companies with more than 5,000 employees.
“It was a privilege to speak with so many industry leaders and I am proud to share their perspectives about the promise and practical application of this technology,” said Ari Kaplan, principal of Ari Kaplan Advisors. “I hope this report fuels a productive dialogue that drives the legal community forward.”
According to study participants, more than one-third (37 percent) are currently using AI for analysis and review of contracts and agreements, and half expect their spending on contract AI to increase this year. Of the respondents who do not currently use contract AI, fully 47 percent say it is likely or highly likely their organization will implement it in the coming year. The report also indicates, however, that contract AI must overcome popular misconceptions that AI automation will completely replace humans and serve as a panacea for contract management challenges.
Ulf Zetterberg, CEO and co-founder at Seal Software, commented, “These statistics point to expanding investment by corporate legal departments in contract analysis and extraction solutions. Many corporations trust Seal’s technology as the recognized leader in enterprise contract analytics and it is exciting to see legal operations evolve in-step with the technical advances of our platform.”
He 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.”
Users of contract AI, as indicated in the study, now deploy it in diverse areas with 91 percent applying it to risk assessment, sourcing and contract management, followed by compliance and procurement at 82 percent. Moreover, given the rising importance of data privacy and protection, it is not surprising that 55 percent of respondents who use contract AI identified GDPR and similar regulatory mandates among its leading use cases.
Study participants also articulated the overall benefits of contract AI in terms of increased clarity and the removal of ambiguity or uncertainty in the negotiating process, a unified approach to drafting contracts, and improved reliability and accuracy in contract analysis with automated identification of inconsistencies in agreements. They emphasized the increased speed with which they can perform these tasks using AI and the value of additional intelligence that can be gathered across an entire contract corpus.
Based on the findings, the researchers provide analysis and recommendations on how legal departments can get started with contract AI and increase its organizational adoption. This includes training programs, proofs of concept to measure success and identify return on investment, as well as side-by-side comparisons of contract AI with manual processes.
The complete study can be downloaded to read offline.
Copyright © 2023 Legal IT Professionals. All Rights Reserved.
We offer organizers of legal IT seminars, events and conferences a unique marketing and promotion opportunity. Legal IT Professionals has been selected official media partner for many events.
