Artificial Intelligence in Contract Management- Rhetoric to Reality

By AIA Contract Documents

January 18, 2023

Today’s automated contract management systems and their use of Artificial Intelligence (AI) grew out of three different disciplines – contract management, document management, and business analytics.

Contract management companies were usually founded by legal experts who sought to automate time-consuming tasks involved in contract administration. Their value statements revolve around faster approvals and automated management of contract to-do lists. Most were founded in the early to mid- 2000’s, with many adding AI text search capabilities in the last few years.

Document management companies first appeared in the early to mid- 2010’s and began as automated workflow tools. They grew out of the need to manage large volumes of electronic documents, but were not originally intended to assess document content. Their value is based in “document engineering” for efficiency. Like contract management systems, many have recently added AI text search features to further improve efficiency.

While there are a host of artificial intelligence startups in the past ten years, AI has its roots in the business analytics industry originating in the late 1970’s/early 1980’s. Leaders in that marketplace first added AI capabilities to their offerings about twenty years ago. First AI applications were often in marketing to determine sentiment and behavior from text-based consumer comments. It has been a natural progression from there to applying those same AI capabilities to legal contracts.

AI has become a buzzword that companies across all industries are using in a variety of ways to imply innovation. Business realities are driving this craze – the continuous need to innovate to be competitive; vastly increased volumes of data, compute power, and new technologies; and the urgency for faster, smarter business decisions in every phase of the business process.

In this White Paper, we’ll dispel misconceptions about AI and provide a working definition of AI and its use in contract management.

View Now: Artificial Intelligence Rhetoric and Reality White Paper