I am not convinced there is much artificial intelligence or machine learning actually applied in contract lifecycle management today, despite the claims of commercial CLM and legal tech vendors who are shouting it from the roof as the new thing in contract management. Old wine in new bottles. Also called ‘rebranding’ by some marketeers.
Smart Contract Technology But Not Contract Artificial Intelligence
Most of the solutions are smart search or extraction tools with business rule sets but don’t really do what AI is supposed to be doing: simulating human intelligence and learning, reasoning, problem-solving, and thinking like humans, and mimicking their actions.
Extracting data and for example, quickly pulling and organizing the renewal dates terms from any number of contracts is smart but still not AI. It becomes AI when the software actually starts learning from your queries and questions you ask.
Reviewing contracts by comparison with standard terms and conditions more rapidly, and organizing and locating large amounts of contract data more easily is extremely beneficial and will save you a lot of money, but still isn’t AI.
At most, it is business intelligence, since there is not much ‘artificial’ about this.
This doesn’t mean there are no AI solutions at all ou there. There are more and more point solutions. There is just no solution yet that AI-enables all tasks in all phases of the contract lifecycle.
What Should AI Contract Solutions Look like?
You would like AI contract solutions to provide advice, interpretation, or find previously unknown solutions, making discoveries, performing deeper or new analyses, or applying previously unknown or different approaches to data in order to yield new, or novel learnings or outcomes.
Now we are talking self-driving cars (Tesla), AI creating abstract art, self-learning manufacturing robots, proactive healthcare mapping, Google Nest etc.
AI requires (see above) also problem-solving or pattern-recognition capabilities, like identifying contract types (in multiple languages) based on how the document is drafted. Algorithms need to be trained on a set of data to recognize patterns.
Also, risk or expected contract value based on negotiated terms could obtained by using AI. And there is or will be a great use for AI contract technology in blockchain models (smart contracts), like contracts essentially re-writing themselves according to pre-set business rules and the parties’ needs.
Happy to hear which commercial CLM and legal tech solutions areas can deliver such ‘real’ artificial intelligence capabilities.