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The state of AI and contracting: A 2023 snapshot of its usage and potential
If there is one message for tech buyers as we approach 2024, it is that AI is here – ready or not. That said, it’s important that professionals in all industries consider the potential uses of artificial intelligence, especially when it comes to their contracting.
After all, more than 26% of the business organization is involved in contracting one way or another. With such a significant business function, it’s no wonder that contracting has begun an AI transformation, bringing with it capabilities ranging from searching contracts to importing data from legacy systems.
But just how widespread is the use of AI in contracting? Who’s using it – and for what? And how high is the demand among those who have not yet taken the AI plunge?
Agiloft recently set out to answer these questions and more with "The State of the Market: AI Usage and Intent in the Legal Industry,” which surveyed legal and procurement professionals around the world.
Read on for key highlights from the report.
How many contracting professionals are using AI, and for what?
AI’s rapid emergence into the business world can be directly traced to the debut of ChatGPT in November 2022. The technology’s ability to scan and summarize large amounts of text quickly and form creative outputs from prompts has been a game changer for many industries, even in its nascent stage.
That said, AI is not just futuristic, aspirational technology. AI, particularly in the form of Machine Learning and Natural Language Processing, is already being used by contracting professionals to aid them in routine, repetitive, and tedious work.
According to our survey results, about one in five of our respondents actively engage with AI today, with the EMEA market ahead of the U.S. in current adoption. However, more than half of the remaining respondents plan to adopt AI over the next 6 to 12 months, suggesting the market may be as hot as the media hype.
AI can augment the efforts of a contracting team in numerous ways. Respondents to our survey currently use it to:
- Search contracts (56%)
- Summarize changes made from one contract version to the next (50%)
- Summarize key provisions to speed up approvals (50%)
- Import data from legacy contracts (44%)
In the future, this list could expand to include more complex tasks. Although creative generation is a challenge AI still struggles to solve effectively, this capability is on the horizon. Libraries of clauses can already be connected to one another to create a total contract, and future iterations of AI may be able to intuit from a natural language request what clauses need to be combined to form a complete contract.
AI's future potential in the contracting world
Regularly working with large amounts of text, legal departments, in particular, have adopted AI to ease duties, decrease time spent searching documents, and drafting contracts. Within the legal department itself, attorneys are catching on to AI’s effectiveness and ability to streamline workflow, since they are more than twice as likely as legal operations to have purchasing AI in their plans to assist with contracting tasks in the next 6-12 months.
We found that these professionals are interested in using AI to help:
- Auto-draft contracts (69%)
- Importing data from legacy contracts (57%)
- Summarize changes from one contract version to the next (54%)
Even at this relatively early stage of AI technology, legal departments are recognizing the value it brings, which will only increase as the technology develops, more uses are discovered, and hesitancy or fear related to new technology lessens.
About Agiloft's AI Platform
At its core, AI presents many opportunities for businesses and organizations, but it also comes with an equally important host of concerns, specifically about accuracy and data privacy.
Luckily, Agiloft’s AI Platform is designed to help deliver the highest degree of accuracy possible by putting you in the driver seat.
With our AI Trainer, you can “train” your AI with your organization’s own documents, operating at more than 90% accuracy – the gold standard for the industry. Plus, you can adapt your models over time to mirror your evolving business needs.
Our third-party contract review can reduce the time and cost of closing contracts by detecting key terms and clauses, as well as ensuring you’re not overlooking risky language by relying on a manual review of dense contracts.
And with Agiloft’s ConvoAI, you can ask questions using natural language like: “How many contracts do we have in Germany?” or, “Which contracts have a force majeure clause?”
Designed with the non-technical user in mind, our AI offerings are easy to use, straightforward, and can be a true force multiplier when implemented effectively and pragmatically.
