The buzz words heard all over forums, podcasts and articles these days are artificial Intelligence (AI).
Everyone is rightfully concerned with AI and wondering what the implications of AI are for contracts, privacy, confidentiality and non-disclosure agreements? Will AI be the beginning of more efficient and fair legal work or the end of human drafters and managers?

I contend that when used as a tool to assist human drafters, the use of AI in contract management promises increased efficiency, accuracy, and accessibility.

The use of AI is not, however, without a host of implications that must be carefully considered by legal professionals, businesses, and policymakers alike.

Enhanced Efficiency and Accuracy:

One of the most immediate positive impacts of AI on contracts is the improvement in efficiency and accuracy. AI powered contract management systems can streamline the drafting, reviewing, and analysis processes, reducing the time and resources traditionally required. These contract management systems can be designed to leverage natural language processing (NLP) and machine learning algorithms to identify relevant clauses and potential risks while ensuring alignment with legal standards. This is particularly useful for organisations that handle large volumes of repetitive contractual arrangements.

Risk Mitigation and Compliance:

Another benefit is that AI can analyze vast amounts of data faster than any humans that i know and can be programmed to learn from historic contract information. This can be a valuable asset in risk mitigation and compliance management as AI can identify potential problems and flag discrepancies and inconsistencies within contracts. This approach reduces the likelihood of disputes over unspecified terms.

Contract Personalization and Adaptability:

AI's ability to understand context and adapt to evolving circumstances can lead to more personalized and dynamic contracts. AI learns from past interactions, tracks performance metrics, and recommends amendments and updates to contracts based on real-time data. This adaptability ensures that contractual agreements remain relevant and responsive to changing business needs, fostering greater agility in the marketplace.

Legal Standardization and Consistency:

AI contract management systems can be designed to automate routine tasks contributing to greater standardization and consistency in legal documents. This practice provides a higher level of uniformity across contracts and reduces the likelihood of human error.

Ethical and Bias Considerations:

Despite the benefits, the integration of AI into contract management also raises ethical concerns, specifically when it comes to the potential for bias.
AI algorithms are only as good as the information fed into the systems. AI works to analyse historic data, and if that historic data contains biases, that bias may be perpetuated in future AI drafted contracts. This is one area where the human element becomes irreplaceable. It is crucial for legal professionals and AI developers to work collaboratively to identify and mitigate biases, ensuring fair and equitable outcomes in contractual relationships.

AI offers opportunities for efficiency, risk management, and adaptability if used properly as a tool to assist the human drafter.

The legal community must approach the inevitable integration of AI into the legal field with an awareness of challenges, ethical considerations, biases, and the evolving nature of legal work. Striking a balance between the benefits of AI and the human touch in legal practice is crucial for navigating the future landscape of contractual management.

As AI continues to evolve, collaboration between legal experts, technology developers, and policymakers will be essential in shaping a future where contracts are both efficient and ethically sound.