Artificial intelligence-powered assistants are becoming increasingly important tools in various fields, including contract management. One of the AI technologies that has gained widespread attention recently are large language models, with the most famous being GPT-4 developed by OpenAI. These powerful systems have not only revolutionised text processing but have also created entirely new possibilities for contract management, making the process faster, more efficient, and more accurate. In this article, you will find nine ways in which large language models can already assist companies in contract management.
How can large language models help companies in contract management?
One specialised form of artificial intelligence are large language models, specifically designed to understand and generate human language. For example, GPT-4 developed by OpenAI has been trained on vast amounts of text to understand language structures, syntax, and semantics. As a result of this training, GPT-4 is already capable of generating high quality texts that resemble human language.
But how can AI models based on large language models specifically help companies in contract management? Here are nine examples:
Understanding and analysing contract content
One of the key advantages of large language models is their ability to understand complex text, including contracts. AI has been trained on a large corpus of texts, including various legal texts and contracts. Therefore, artificial intelligence can successfully understand the structure of contracts, identify important terms and obligations, and do so quickly. This ability forms the basis for more efficient and faster management of a large portfolio of contracts.
Searching and identifying contract terms
Large language models can search for and process information from long and complex texts much faster and more accurately than humans. This enables organizations to quickly find and identify specific clauses or terms in their contracts, saving time and resources.
Error analysis and dispute prevention
Large language models can detect possible errors or inconsistencies in contracts. For example, if a contract contains terms that contradict previous contracts or an organisation's standard terms, the AI can identify and alert the relevant team members about the inconsistency. This capability helps to prevent potential disputes and issues in the future.
Compliance monitoring
In addition to understanding and analysing contract content, large language models can help organizations monitor compliance with contractual obligations. They can identify significant contractual deadlines and obligations, providing alerts when it is time to fulfill them. This significantly reduces the risk of human error and improves organisational performance.
Contract structuring and formatting
Large language models can assist in structuring and formatting contracts, following predefined formats or standards. This can help ensure consistency and legal certainty, especially in large organisations where numerous contracts are being executed.
Risk analysis
The ability of large language models to analyze contracts can help identify potential risks, such as obligations that are not clearly defined or terms that may put the organization at a disadvantage. This information can be used as part of risk analysis to prevent problems and disputes.
Contract optimization
By analyzing an organization's existing contracts, a large language model can provide suggestions for improvements and changes that optimize the contracts. This may involve clarifying clauses, aligning terms, or even creating new and improved contract templates based on the organization's previous contracts.
Contract automation
The process of drafting and managing contracts can be significantly automated with the help of large language models. They can assist in generating contract drafts, identifying unfulfilled obligations, and even creating contract monitoring systems.
Understanding complex contracts
Sometimes contract understanding can be challenging, especially when they involve legal terminology or specific conditions. Large language models can help interpret complex contracts by explaining them in simpler terms or demonstrating how certain conditions may affect the parties involved.
Conclusion
In conclusion, it is clear that large language models like GPT-4 offer numerous possibilities in contract management, from understanding and risk analysis to structuring and automation. The simplified and faster search for important contract terms, with the help of AI, empowers human involvement in managing complex legal documents, reducing the risk of human errors and missed deadlines that could lead to unwanted consequences.
At Agrello, we have embarked on implementing our AI roadmap. Our vision is to create an AI-based legal assistant called Agrello Codriver. As a first step, we introduced Agrello Codriver as a contract reader. Now it is easy to ask Agrello Codriver various questions about a contract uploaded to Agrello platform and search for specific sections within the file. This is just the beginning of a long journey, but even today, we can provide new added value.
If this story sparked new ideas for you, and your company is interested in using a contract management platform, why not choose Agrello as your partner?
