How AI contract review automation transforms efficiency: exploring the benefits

In property management, handling contracts can often feel like a never-ending task. From sifting through dense legal jargon, to ensuring compliance with ever-changing regulations, the process can be both time-consuming and prone to errors. However, the advent of artificial intelligence (AI) and machine learning has brought about a transformative change. By automating the small and mundane, yet crucial, aspects of contract review, using automated contract review software, AI is revolutionising the way property managers handle legal documents.

In this post, we will explore how contract review automation enhances legal efficiency, reduces costs, and improves risk management. By leveraging the power of AI, property managers can now streamline their contract review processes, allowing them to focus on more strategic tasks, and ultimately improve their overall operational efficiency.

While this article won’t provide legal advice, it will explore how AI contract analysis works, and AI-driven contract review can significantly aid in the meticulous task of reviewing contracts.

MRI Contract Intelligence

MRI Contract Intelligence

Overcome contract challenges, uncover key insights, and identify opportunities for cost savings and increased revenue.

What is contract review automation?

Contract review automation is an innovative technology that utilises AI and language models to streamline the process of analysing contracts. By automatically identifying and extracting important data points, terms, and clauses, this technology significantly reduces the time and effort required for thorough contract review.

The technology behind contract review automation

The backbone of contract review automation lies in advanced AI technologies, including large language models and natural language processing (NLP). These technologies enable the automated system to understand and process human language, making it possible to sift through vast amounts of contract data quickly and accurately.

Large language models are trained on extensive datasets and can recognise patterns and nuances in legal language. Natural language processing further enhances this capability by allowing the AI to interpret, summarise, and extract relevant information from the text.

Despite the impressive capabilities of AI and NLP, it is crucial to emphasise the importance of human involvement. Generative AI models, while highly advanced, can occasionally produce inaccurate data or make errors in interpretation. This is why human oversight remains essential to ensure the accuracy and reliability of the automated contract review process.

By combining the efficiency of AI with the expertise of human reviewers, property managers can achieve a more accurate and dependable contract review process.

Manual vs automated contract review: what are the differences?

Manual contract review

Manual contract review involves humans reading and meticulously abstracting data from large contracts. This process requires a high level of attention to detail and can be extremely time-consuming, labor intensive, and prone to human error. Typically, the extracted data is then populated into a spreadsheet or other data management systems.

Automated contract review

Automated contract review leverages trained AI models to handle the majority of the data abstraction work. These models are capable of quickly and accurately identifying and extracting important data points, terms, and clauses from contracts. Human reviewers then validate the results to ensure accuracy and completeness.

Benefits of automated contract management

Automated contract management offers a multitude of advantages that can significantly enhance the efficiency and effectiveness of property management. Here are the key benefits:

Speed and efficiency

Automated contract management systems are much faster than manual processes. Leveraging AI, these systems can perform data abstraction and contract analysis at least 75% faster than human reviewers. For instance, tools like the MRI Contract Assistant enable property managers to handle lease queries and provide answers substantially faster using generative AI.

Improved accuracy and consistency

Automated systems are designed to minimise human error, leading to more accurate and consistent contract reviews. By using advanced AI models and natural language processing, these systems can identify and extract key data points with high precision. The consistent application of rules and criteria reduces the likelihood of discrepancies, and ensures uniformity across all contracts. Moreover, the ability to consistently find mistakes in portfolios translates to a significant return on investment (ROI), often between 3 and 4x.

Auditability

Automated contract management systems come with robust audit trails, making it easy to track changes, approvals, and actions taken on each contract. This level of transparency is crucial for compliance and risk management, ensuring that every step in the contract management process is documented and can be reviewed if necessary.

Modern user interface

These systems typically feature modern user interfaces that are intuitive and user-friendly. This makes it easier for property managers to navigate the system, access necessary information quickly, and manage contracts more effectively. The user-friendly design reduces the learning curve and increases user adoption rates.

Cost effectiveness

The increased efficiency and accuracy of automated contract management directly contribute to cost savings. By reducing the time and labor required for contract review, organisations can significantly lower their operational costs. The high ROI, linked to improved accuracy and reduced errors, further underscores the cost-effectiveness of these systems.

Scalability

Automated contract management systems, such as MRI Contract Intelligence, are built to handle large portfolios and scale with the needs of the organisation. These enterprise-grade technologies support automated uploads, bulk triggering, and other features designed to manage extensive contract volumes efficiently. This scalability ensures that the system can grow with the organisation, accommodating increasing numbers of contracts without compromising performance.

How contract review automation enhances legal efficiency

Reducing manual efforts

One of the most significant ways contract review automation enhances legal efficiency is by reducing the manual efforts involved in the review process. Traditionally, contract review is a labor-intensive task that requires meticulous attention to detail. By automating the extraction and analysis of key data points, terms, and clauses, AI-driven systems allow human reviewers to focus on more value-added tasks such as strategic decision-making and risk assessment. This not only speeds up the review process, but also ensures that legal professionals can dedicate their expertise to areas where it is most needed.

Simplifying processes

Contract review automation simplifies complex legal processes by standardising and streamlining the review workflow. Automated systems provide a consistent framework for contract analysis, ensuring that every document is reviewed according to the same criteria and standards. This standardisation eliminates variability and enhances the overall efficiency of the review process. Additionally, automated systems often come with user-friendly interfaces that make it easy to manage and track contracts, further simplifying the process for legal teams.

Enhancing risk management

Automation significantly improves risk management by increasing the accuracy and consistency of contract reviews. Automated systems are less prone to human error, ensuring that important clauses and potential risks are identified and addressed promptly. A portfolio that is in constant audit readiness, thanks to regular and accurate automated reviews, is inherently a low-risk portfolio. By maintaining high standards of accuracy and consistency, automated contract review helps organisations mitigate potential legal risks, and ensures compliance with relevant regulations and standards.

Implementing contract review automation

One of the significant advantages of modern contract review automation is the availability of pre-trained, off-the-shelf models. These models are designed to be user-friendly and require minimal customisation, allowing for a straightforward and rapid implementation process. Benefits include:

Ease of integration: Pre-trained models are built to integrate smoothly with existing systems and workflows. They come with predefined templates and configurations that match common contract types and clauses, reducing the need for extensive setup.

Short implementation timeline: Since these models are pre-trained on vast datasets and already understand the nuances of legal language, the implementation timeline is significantly shortened. Organisations can start seeing the benefits of automation within a matter of weeks, rather than months.

How Contract Intelligence from MRI Software can help

MRI Software’s Contract Intelligence offers a powerful solution that enhances legal efficiency through contract review automation. By leveraging advanced AI and machine learning technologies, MRI Contract Intelligence transforms the way property managers handle contract reviews, providing a host of benefits that streamline operations, and improve accuracy.

By combining advanced AI technology with a user-friendly interface and robust features, it provides property managers with a powerful tool to streamline contract management, improve accuracy, reduce risks, and achieve significant cost savings.

FAQs

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Contact MRI Software

To find out more about MRI Software’s AI-powered data extraction and contract analytics platform, request a demo or call us today on 1300 657 700.

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