Major New Legal Industry Study Reveals State of Artificial Intelligence in Contract Analytics
Authoritative Report Assesses How Legal Department Pros at Large Companies Perceive and Apply AI to Contract Analysis and Data Extraction
Research Conducted by Ari Kaplan Advisors and Supported by Seal Software with Perspectives From Leaders at American Express, HPE, Nokia, Novartis, Atos, Olympus, and Others
NEW YORK and SAN FRANCISCO, Feb. 13, 2019 /PRNewswire/ -- An authoritative legal-industry report on the current state of artificial intelligence (AI) in contract analysis and data extraction, and its applications within the legal community was released today. Leading industry analyst firm Ari Kaplan Advisors was engaged by Seal Software to design and conduct unbiased research, the findings of which provide clarity on how legal departments at large corporations perceive and practically apply AI-driven contract analytics in a broad range of matters.
The report is derived from comprehensive interviews with professionals, predominately at Fortune 1000 organizations, whom exercise influence over the adoption and deployment of AI technology. Law department leaders from American Express, Hewlett Packard Enterprise, Nokia, Novartis, Atos, Transocean Ltd., SI Group Inc., CyrusOne, PagerDuty, and Olympus Corporation of the Americas, among others, shared their views in the benchmarking study. All but one of the participants were lawyers, about two-thirds of which were with organizations that had more than $5 billion in revenue, and most worked at companies with more than 5,000 employees.
"It was a privilege to speak with so many industry leaders and I am proud to share their perspectives about the promise and practical application of this technology," said Ari Kaplan, principal of Ari Kaplan Advisors. "I hope this report fuels a productive dialogue that drives the legal community forward."
According to study participants, more than one-third (37 percent) are currently using AI for analysis and review of contracts and agreements, and half expect their spending on contract AI to increase this year. Of the respondents who do not currently use contract AI, fully 47 percent say it is likely or highly likely their organization will implement it in the coming year. The report also indicates, however, that contract AI must overcome popular misconceptions that AI automation will completely replace humans and serve as a panacea for contract management challenges.
Ulf Zetterberg, CEO and co-founder at Seal Software, commented, "These statistics point to expanding investment by corporate legal departments in contract analysis and extraction solutions. Many corporations trust Seal's technology as the recognized leader in enterprise contract analytics and it is exciting to see legal operations evolve in-step with the technical advances of our platform."
He added, "Many companies are achieving impressive results using contract AI across common use cases, from data extraction and procurement to applications in financial services and regulatory compliance, and there are even more dramatic changes ahead."
Users of contract AI, as indicated in the study, now deploy it in diverse areas with 91 percent applying it to risk assessment, sourcing and contract management, followed by compliance and procurement at 82 percent. Moreover, given the rising importance of data privacy and protection, it is not surprising that 55 percent of respondents who use contract AI identified GDPR and similar regulatory mandates among its leading use cases.
- 45% cited NDAs and vendor contracts
- 36% pointed to leasing and M&A transactions
- 27% recognized Brexit
- 18% referenced derivatives and trading
- 9% cited commercial lending
Study participants also articulated the overall benefits of contract AI in terms of increased clarity and the removal of ambiguity or uncertainty in the negotiating process, a unified approach to drafting contracts, and improved reliability and accuracy in contract analysis with automated identification of inconsistencies in agreements. They emphasized the increased speed with which they can perform these tasks using AI and the value of additional intelligence that can be gathered across an entire contract corpus.
Based on the findings, the researchers provide analysis and recommendations on how legal departments can get started with contract AI and increase its organizational adoption. This includes training programs, proofs of concept to measure success and identify return on investment, as well as side-by-side comparisons of contract AI with manual processes.
The complete study can be downloaded to read offline.
Live Webinar
Join law department leaders at some of the world's best-known companies on Tues., Feb. 26 at 2:00 p.m. EST, for a live webinar, Understanding Legal AI From the Inside, Out, to gain greater understanding of how these organizations are using artificial intelligence with their portfolio of contracts. Moderated by legal industry analyst and author of today's contract AI study, Ari Kaplan, alongside Laurie Brasner, general counsel at Seal Software, this discussion will reveal insights and challenges for successful implementation of advanced contract analytics in the enterprise.
About Seal Software
Seal Software is the leading provider of contract discovery, data extraction, and analytics. With Seal's machine learning and NLP technologies, companies can find contracts of any file type across their networks, quickly understand what risks or opportunities are hidden in their contracts and place them in a centralized repository. Based in the San Francisco Bay Area, Seal empowers enterprises around the world to maximize revenue opportunities, reduce costs, and mitigate risks associated with contractual documents, systems, and processes. For more information, visit Seal Software at seal-software.com.
About Ari Kaplan Advisors
Ari Kaplan Advisors helps companies, firms, and individuals in the legal industry create opportunity through market research, coaching, analysis, commentary, and other business development services. The firm was founded by Ari Kaplan, an inaugural Fastcase 50 honoree, a finalist for ILTA's Thought Leader of the Year award, and a fellow of the College of Law Practice Management. The author of two books and more than 200 published articles, and the principal researcher for a variety of widely distributed benchmarking reports on legal industry topics, Kaplan has served as a keynote speaker at notable events throughout the U.S., U.K., Canada, and Australia.
Seal Software is a trademark or registered trademark of Seal Software, Inc. in the U.S. and/or other countries. All other marks appearing herein are the property of their respective owners.
SOURCE Seal Software
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