Contract management and reviewing them is a laborious and time-intensive task. Comparing requirements, locating relevant phrases, ensuring consistency, waiting for approvals, and sending them for revision all take a lot of time and resources, not to mention they are repetitious.
According to McKinsey (1), the lack of efficient contract management resulted in a loss of sourcing value to businesses of 9% from their yearly revenues which is around $2.5 trillion in value.
With immense growth witnessed in Contract management technology lately, has led to significant changes in Contract document management which now almost needs no manual intervention. According to Gartner (2), enterprises that use Advanced Contract analytics will see a reduction in manual contract review effort of 50% by 2024.
If you’re using a legacy system for contracting, firms should check out the technology in the trend that can automate many of their tasks. LLMs have something for everyone, regardless of whether you’re interested in using them for personal projects, maximizing productivity at work, or summarizing research articles and search results quickly.
By streamlining, automation, and improving tasks, LLMs can help with various contract management-related issues. Among the popular language models of today are OpenAI’s ChatGPT, Google’s PaLM or LaMDA, Meta’s Galactica or OPT, and Microsoft’s Megatron-Turing.
Discussed below are LLMs in trend along with their benefits in the contract management system.
How does LLM transform an automated contract management system?
The type of AI powered by large language models (LLMs) is Generative AI which creates new content based on inputs or prompts. It receives the prompts and produces outputs in the form of text, images, audio, videos, code, simulations, and more. Open AI’s ChatGPT, Microsoft’s Bing, and Google’s Bard are a few examples of LLM Chatbots.
There are numerous methods to use LLMs to enhance the contract management system. They can create documents that are ready for inspection and approval. Next, contract managers only need to provide the needed information for a contract and Generative AI will create a draft that can be put out for review.
Documents that include internal policies, employment contracts, and other legal clauses can also be managed with LLMs. In using LLMs, an organization may make sure that all legal documents are current and adhere to all applicable rules and laws.
Take a real-time example of ChatGPT used for contract management for legal teams. It helps in gathering research information on laws, and regulations from contracts. Contract documents can be examined and made easier to review. Teams can make better decisions by using automated contracting to analyze legal data and provide predictive insights.
Benefits of LLM with Contract Management
- Easier ability to process natural language
The capability to process natural language is one of the main benefits of LLM. Consider where users can conversationally enter data rather than using legal jargon. Additionally, because LLM is based on the GPT-3 platform, it has access to a wealth of data and can give very accurate responses.
The adaptability of LLMs is an additional benefit. It is compatible with several contract management and document management programs, and workflow automation applications.
- Reduces time spent on researching and typing up
LLM and related applications help by summarizing case notes along with relevant laws and statutes and reducing the amount of time spent conducting research and typing up documents.
This time would be better spent meeting with clients directly, settling disputes with rival parties and their attorneys, questioning witnesses, and formulating legal plans.
It also helps automate time-consuming procedures like preparing legal documents, analyzing contracts, and performing due diligence, giving attorneys more time to concentrate on the more complex details of their cases.
With numerous in the market who can provide you with contract management services, it is necessary to select and pick the right Solution provider for your contracting.
A new era in contract management has begun with the advent of large language models. Professionals in contract management can use these technologies to handle contracts more effectively, lower risks, and produce better results in the end. Those who use it effectively will surely be at the forefront of a field that is changing constantly. To learn more, stay updated with us. For any doubts or guidance, reach out to [email protected].