General Counsel continue to face operational challenges, including cutting costs, “doing more with less” and yet delivering a quality service in a timely manner with efficiency, while reducing legal risk to the business.

Artificial intelligence can go a long way in facilitating operational excellence in corporate legal departments. Separating the reality from the hype surrounding this technology, here are some very specific illustrations of how practical AI can deliver material business benefit to in-house departments:

Revenue Leakage and Risk Management

Legal departments enter into numerous contracts for the business, but how many can reliably say that they are accurately tracking the SLAs to ensure that suppliers are duly delivering, the organisation is meeting its own legal obligations to customers, which agreements are due for renewal, and so on?

Many in-house departments, in candid moments, will confess that because these documents don't often reside in a central location, contracts lapse or automatically get renewed, sometimes even to the detriment of the business.

AI can curb revenue leakage by ensuring SLAs are suitably adhered to; and enable timely renegotiations to secure better deals, supported by the necessary business information and intelligence.

To illustrate, using AI, data points and obligations can be extracted and automatically fed into centralized contract management systems, reducing the manual labor ordinarily required to capture this detail. In turn, having captured this data, the legal department can set up automated searches at periodic intervals based on specific criteria—e.g., the next five contracts above the value of £5 million that are due for renewal in 90 days in the aerospace industry in Italy and France; and where the SLAs have/have not been met.

AI can also help legal departments automate risk detection, fully supported by auditability. For instance, a department can identify a key risk spot and create an extraction criterion so that every time a similar risk point appears in contracts in the future, the clause is highlighted for appropriate action to be taken.

Reducing Cost of External Counsel

Recently, the bottling company Coca-Cola European Partners announced that it has reduced the size of panel firms to 30, from over a 100. The company expects to make a cost saving of £250,000 annually. While cost cutting is an objective, no GC can eliminate the need for external counsel. By adopting AI, the GC can realistically balance the two requirements.

Take the example of the imminent need to repaper numerous legal documents in the aftermath of Brexit. The traditional approach would be to ask the relevant panel law firms to undertake the entire exercise—from identifying the contracts that need repapering to undertaking the individual tasks. It would be a costly project for the department as this work would, in all likelihood, to a large extent be undertaken manually by the law firm. Today however, AI technology presents a much more cost effective and efficient option. The technology can be trained to extract the contractual information in a format that is easily consumable and machine readable. The department can then deploy panel firms to help with only those complex legal and regulatory clauses or issues that require strategic input. Due to the accuracy that AI technology delivers, the department would also significantly reduce business risk.

It's worth highlighting that repapering will never be a one-off issue, it is something that organisations will need to undertake on an ongoing basis, given the ever-evolving legal and regulatory landscape. Digitizing the contract estate and mining it for content using AI therefore readies the corporate legal team for today's and indeed tomorrow's challenges.

Informed Decision-Making

Given the vast amounts of legal documents that exist in organisations, departments often look at sample data sets to gain visibility of business trends. In doing so, the legal department and the larger corporation may be making business decisions in the absence of a complete picture of the issues in question. AI on the other hand, by holistically including all the data that exists in the business pertaining to specific issues, can enable the legal department to analyse the complete landscape to get a more realistic picture of problems and hence take reliable business decisions.

The view of in-house legal departments being “cost centers” may be deeply entrenched, but practical AI offers tremendous capability to enable lawyers to materially dispel that view by freeing up time to focus on the strategic, business-critical aspects of their work and hence demonstrate their value to the organization.

Alistair Wye is lead product strategist for iManage RAVN AI. In his current role, Wye works closely with the product and marketing teams on product development. Prior to joining iManage, Wye was a banking lawyer specializing in multijurisdictional leveraged acquisition finance. His legal experience includes working at Latham & Watkins in both London and Hong Kong, the in-house legal team at Deutsche Bank, and Ashurst in London. Alistair is an active contributor and speaker in the legaltech space, having participated in industry conferences throughout EMEA. He also runs his own legaltech law and coding website, www.lawtomated.com.