What follows is an update of Arnaud Cervera’s article that was originally published March 14, 2020, on LinkedIn. We preface his piece with an endorsement from Tim Cummins, President of IACCM, who stated recently,
“This is an excellent article and absolutely hits the right points on the combination of simplification and the use of artificial intelligence (AI.) I’d like to suggest there are two additional issues that need to be addressed to make this change fast and effective.
- Economics- IACCM has been spending time (and using AI) to analyze the powerful business case - not only within individual organizations, but also now in the context of national economies.
- Standards - For benefits to be sustainable, we should avoid the mistake of replacing one art form (individual approaches to design and drafting) with another. There is a growing army of ‘design specialists’, each with their own view of how it should be done. Imagine if accountants took a similar view to producing accounts - we would finish up with replacing one form of chaos with another.
So again, IACCM has been working to create a publicly available ‘design library’. It’s also worth mentioning that the legal authorities which oversee court and dispute systems need to come on board with this - so we are working on that too.” - Tim Cummins
In these times where people are forced to work remotely, I must emphasize our need for digital ways of working. To me, it’s a bit discouraging that we need COVID-19 crisis to finally make us understand that digitalization is a compulsory step to go through when we speak about legal and contract management practices.
Simplify your agreements
Every year, Gartner, Forrester and other Analysts provide a very comprehensive view about the Contract Lifecycle Management (CLM) digital solutions landscape. Whatever the solutions you will select for your own business needs, don't feed them with complexity. Those solutions will generate the best value if you don't rush to upload your agreements into those solutions before simplifying them and your CLM process.
Several methods exist to assess to which extent a process may be simplified. And for agreement simplification, a discipline has been developed a few years ago by a few people among which three brave ladies -- Stefania Passera, Founder and Lead Designer, Passera Design, Finland; Marie Potel-Saville, Founder and CEO, Paris 08, France; and Tessa Manuello, Founder, Legal Creatives, Canada Legal Design ignited a new experience into agreements called legal design.
Legal Design combines two competencies -- design thinking and legal expertise to create “user-centric” agreements that will significantly improve business understanding and enterprise value. This solution makes it possible to combine creativity plus UX design competencies1 to create contract language to create contract language that could be a combination of drawing and plain language; a cartoon (like a comic contract); or even audio agreements.
Digitize your agreements
Digitalization allows your CLM process and agreements to be simplified and then ingested into digital solutions.
Legacy agreements are mostly paper contracts or just .pdf documents that are not searchable, and as such, no content extraction is possible. However, digital solutions do exist for agreements that allow you to turn your paper or .pdf contracts into data. Using this automation, you can perform data analytics and complex search into your legacy contracts via OCR (Optical Character Recognition) and machine learning.
These contract discovery and analytics solutions (applications) recognize certain wording that has precise and understandable legal meaning. As a result such analytics can answer questions like "How many of my agreements have a Force Majeure clause?" or "What part of my agreement is related to Incoterms?" One click in the app can pull up answers, but it’s not a one-off process. The data will still need to be analyzed to reveal new tenders or potential new negotiations because of remaining business gaps that still need to be solved.
CLM digital solutions allow you to create and assemble a library of clauses. The solutions can also automate the CLM process and improve drastically the way the various stakeholders collaborate on a given agreement. You may easily engage reviewers, approvers and for sure other parties in the negotiation and redlining process.
Finally, digital signature solutions also enable end-to-end digital CLM processes. And thanks to seamless integration you could push only the agreed data into your Enterprise Resource Planning (ERP) system or equivalent depending on your business needs.
AI for contracts is not SCI-FI
AI for Contract is happening now!
Once you've digitized your agreements and converted them into data, you can run analytics and even think about AI use cases.
Have you ever heard about negotiation bots? We don't believe that robots will negotiate with other robots, but we truly see how negotiation bots will speed up the agreement process to allow people to focus on strategic business stakes.
Imagine past years when you almost always agreed with your partners on the same deviations . So today, why should you restart the original negotiation on related articles or agreements? Thanks to the data and the AI mechanism, a digital assistant may allow you to validate this type of deviation to template wording while you focus your activity and time on strategic agreements where the negotiation is at stake. As such, you will get much quicker results with higher value for your stakeholders and you really feel empowered to make your own data-driven decisions.
We are not really far from offering prescriptive AI in the field of agreements. Prescriptive AI technology is already available as you practice it while using Google map as an example. But don't miss the opportunity to improve your data quality because without this key resource, you may fail in digitalizing and thus in offering prescriptive on AI as well.
When digitizing, use the opportunity to simplify, to listen to the end user and don't forget your focus on data quality! Data is your best friend providing you take care of it!
ABOUT THE AUTHOR
Arnaud Cervera is Project Manager in Digital world, passionate about legal tech and legal design; digital coach. He comments, In the COVID-19 context, you want to speed-up your digitalization journey to foster remote collaboration and access to law? You wonder what should be the right steps for a successful digitalization in the legal field? Be sure to follow Arnaud on Linkedin.