In February 2017, an article in the Independent revealed how one of the largest BFSI companies in the world is using Artificial Intelligence (AI) to replace thousands of legal man-hours with machine hours worth a fraction of it at a higher accuracy and incredibly lower costs. To quote the article:
Sounds great, right? But, what’s in it for you? Like you, we too started wondering - is contract intelligence a luxury that only a handful of global giants can afford? And that led us to the more important question - can we at FORMCEPT do something to disrupt and democratize contract intelligence as a service?
Turns out we can, and we did. In this article we share with you how AI-powered contract analysis can increase your RoI manifold, and what we at FORMCEPT can do to make that happen for your business.
What is Contract Analysis?
Simply put, Contract Analysis is automation of the process of deciphering important provisions in a contract by deploying powerful Artificial Intelligence (AI) algorithms. This is done with a view to extracting timely, actionable insights from it. To understand this better, let us take the case of a banking company. Needless to say, the company signs hundreds of contracts every year. These contracts pertain to different commercial engagements and every year the company undergoes one or more of the following legal events - some of the contracts expire, some are updated, while some trigger legal eventualities like termination, breach, litigation, and so on. Each contract entails certain actions that need to be taken based on the time left for expiry, updates made, or eventualities triggered.
There are also legislation uncertainties and staff turnover that affect the company. Changes in legal provisions directly affect the contracts and their execution. Staff turnover in the legal team makes it difficult to manage contracts seamlessly as employees are tagged to specific contracts only, and every time an employee leaves, someone needs to catch up with what’s going on - even to take the most basic actions.
Now let us look at the following two scenarios:
In Scenario 1, the company has a legal team which has expert counsels who are dedicatedly looking at all the above functions. The result? Higher inaccuracy due to human error, cost-heavy structure due to exponentially high manpower requirements, delays to human limitation in document comprehension and processing, missing of important deadlines, and higher uncertainty due to volatile legal environment, attrition and unforeseen triggers.
In Scenario 2, the company still has a legal team, but it is now supported, augmented and assisted on a timely manner by a super-powered contract analysis tool. Preliminary legal review time comes down by 50%-80%, legal counsels have more time and focus on implementing the contract, managing negotiations, and handling eventualities, the frequency of missing important deadlines comes down significantly (like changing prices or interest rates a certain period of time before contract termination), and inaccuracy issues are lowered due to reduced human errors.
Who Can Benefit from Contract Analysis?
First of all, it’s you.
Whether it is banking, real-estate, insurance, or any other industry that feeds on contractual engagements, your business can realize massive cost-savings translated into a multiplier effect on the RoI with a powerful contract analysis tool.
Secondly, it is your legal team and / or the independent legal counsels who shoulder the bulk of your contract analysis work.
The catch? Just like any other job automation, when it comes to automated contract intelligence, your legal team can be apprehensive about any technology that appears to replace them. But here’s the best part - contract analysis solution stands to benefit your legal service providers as much as it can benefit you. By deploying this solution, law firms can get more done with less resources, grow their client base with the savings in costs and manpower, improve performance and retain more customers. It is, in fact, a perfect win-win solution since this technology does not replace lawyers or their intelligence. Instead, it empowers them, and most importantly, it empowers you.
How Can We Help?
Now that you know how contract analysis works and how it can transform your business, this is where we come in. Our flagship unified analysis product MECBOT is an AI super-power that can crunch complicated contractual data in minutes, integrate with your enterprise workflow for automated insights and alerts, and deploy technologies like Machine Learning, Natural Language Processing and Deep Learning to jump-start your stagnating legal burden.
The images below are screen-shots from our contract analysis solution to give you a glimpse how it works:
Text Analysis Summary
Get a quick summary of how many different word stems have been used (lexical diversity), the number of meaningful words (i.e. words which affect the meaning or implication of a sentence - e.g. ‘negotiate’ and ‘terminate’ are meaningful words but ‘the’ is not), total number of sentences in the contract, languages used in the contract, and distribution of gender references in the text.
Visual Text Distribution - Word Clouds, Phrase Analysis, & Sentence Nuggets
Wondering about the general theme of the contract that just landed on your desk? Take a peek into our highly visual language analysis to identify the most used words, phrases and sentences, the number of instances of each, and references to such instances. See the most important themes covered in a contract in less than a minute with this tool!
Contextual Analysis of Timeline
Ever spent hours buried in a contract to extract timelines, dates and recurring events? Say goodbye to painstaking analysis and let MECBOT handle it for you. MECBOT quickly ingests all references to dates and timelines and classifies them by period references (e.g. 1 year or 5 weeks) and specific date / time references (e.g. 15th July, 2017).
Comprehensive Query & Search
MECBOT places at your finger tips the ability to run comprehensive queries and searches on keywords, and extracts matches from the contract with the blink of an eye. Don’t mistake this for a basic search feature - our powerful algorithms can even understand similar terms (e.g. ‘salary’ and ‘compensation’ in the image below) and identify the full list of important provisions in the contract related to that term.
MECBOT also digests your contract to extract names and email addresses of parties, sends periodic and automated email alerts on important dates in the contract such as expiry, milestones, grace periods, etc., analyzes standard legal provisions to generate a pipeline of insights for due diligence, negotiation, etc. and enables your legal team to achieve exponentially more with incredibly less. Within the first 6 months of implementation, the difference in performance will be obvious to you, and within a year of implementation, your RoI numbers will speak for itself!
Excited? Want to know more? Just drop us a line at firstname.lastname@example.org and our expert team of data scientists and customer support will tell you exactly how we can help your business. To know more about what we do and how we can help you, please visit www.formcept.com.