ContractPodAi®, the award-winning provider of AI-powered contract lifecycle management solutions, today released a new study titled “Why Corporate Counsels Need to Digitally Change: Contract Management Usages and Practices 2020.”
The study offers valuable insights into how contract management is currently handled by companies. It shows the changes in attitude and practice currently taking place - and those that are afoot - partly as a result of the COVID-19 (coronavirus) pandemic. This research reveals the crucial need, within legal departments, to automate existing systems and processes with AI-powered contract management solutions. In effect, the results show that there is a clear need for corporate legal teams to up their game by digitizing processes, and capabilities.
Half of respondents (49%) are interested in investigating, adopting and implementing an AI-based management system. An overwhelming majority (90%) are open to automation and 85% of lawyers surveyed believe that AI-based contract management software would produce a range of individual benefits, from providing consistency to finding particular terms which were used during the creation of contracts. Also, 72% believe that the strongest benefit of AI is that it frees up lawyers to do higher-value, strategic work.
Clearly, most general counsels and legal teams recognize the need for legal automation. However, the usages and practices research reveal that currently only 8% of corporate lawyers are among the fortunate to have fully digitized their contract management systems. Despite a clear business case and solid ROI for legal automation, 83% are not yet using automation for their contracts.
The report reveals that 55% of lawyers surveyed believe that an improvement of business ROI would encourage leadership teams to support CMS acquisitions. Nevertheless, many have yet to put a solution on their actionable list. That is due to the costs associated with it. Securing funds to purchase reliable contract management software seems to be the biggest hurdle for general counsels and legal teams in 2020. Currently, larger companies - with more than $500 million in annual revenue - are more likely to purchase such a system in the next 12 months.
Among lawyers whose contracts are still 70% to 95% on paper, many want to manage their contracts much better and are aware of the contract management software that can help with that. Even those lukewarm to the idea of purchasing a new system acknowledged that automation could allow legal teams to know exactly when contracts are about to expire or when there is a termination window.
“The nature of legal work is quickly evolving along with contract management platforms. Today’s AI-infused solutions simplify the complexities of contract management, ensure continuous contract flow, and provide much-needed data and insights,” said Sarvarth Misra, CEO at ContractPodAi. “Essentially, they help legal professionals to do far more with fewer resources, while fueling critical thinking and giving in-house attorneys the time to focus on higher-level strategic work.”
The report analyzes data from telephone interviews run from April-June 2020, reaching out to over 4500 corporate lawyers managing agreements across North America. The respondents boast a range of legal experiences and represent national and international companies with $100 million to $5 billion in sales revenue.
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