AI & Contractualization

Lifecycle Management of Contracts (CLM) is still a small sector: the global market is valued at around 2 billion euros. However, its impact on the financial industry is significant, as well as for many industries that manage a multitude of contracts, from automotive to healthcare, through retail and manufacturing.

AI has a significant impact by improving efficiency, accuracy, and strategic decision-making throughout the various stages of the contract management process. It can significantly enhance the quality and compliance of contracts, leading to better business outcomes. AI can notably influence:

• Drafting, by suggesting standard clauses and terms based on the type of agreement and historical data. This helps standardize contracts and reduce drafting time.

• Reviewing, by comparing contracts to a library of standard templates to flag discrepancies or non-compliant clauses. This reduces manual workload and improves compliance.

• Contract Optimization, by analyzing a large number of contracts, AI can provide insights into the best contractual practices and suggest improvements. This optimizes negotiation strategies and contractual terms for future agreements.

• Data Extraction and Analysis, certain key information, such as dates, payment terms, and obligations, are crucial for effective contract management and risk assessment. AI speeds up the extraction process and reduces errors.

• Proactive Risk Assessment, AI can analyze contracts to identify risks based on language patterns and combinations of clauses that have historically led to issues.

• Performance Monitoring, AI can monitor the execution phase of contracts, ensuring both parties meet their commitments. It can send alerts for upcoming deadlines or renewals, allowing effective management of obligations.

It thus becomes conceivable to delegate almost entirely the management of contracts to AI. For a long time, AI has been able to handle routine and administrative tasks such as data entry, contract drafting based on templates, and basic compliance checks. These processes are rule-based and can be effectively managed by AI. But now, AI can analyze contract data to identify trends, risks, and opportunities.

AI systems can also effectively monitor contract execution against key performance indicators, sending alerts for milestones, renewals, and compliance issues.

However, human intervention remains irreplaceable in:

• Complex Decision-Making, arising from nuanced business relationships and the company’s long-term objectives.
• Legal and Ethical Considerations, contracts often contain legal stipulations that may require interpretation or judgment that AI is not yet capable of handling independently. Ethical considerations, such as fairness in negotiations and privacy concerns, also require human oversight.
• Change Management, contracts can include exceptions and unique situations that standard AI models may not anticipate or handle well. Adapting to new regulations, new business sectors, or new business models may also require a level of flexibility and critical thinking that exceeds the current capabilities of AI.

Preliminary Schedule

08:00: Welcome, breakfast

08:30: AI Financing Observatory

09:00: AI and Contracts

09:00: Introduction

09:15: Roundtable

10:00: Debate between speakers and the audience

10:30: END

Registration