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The role of AI in forward-thinking legal procurement strategies

19 Feb 2021

by Angus Chudleigh

Learn how progressive businesses are using technology to overcome the age-old problems of delays

The introduction of technology and artificial intelligence (AI) within the legal sector has meant more firms, and their sales and procurement teams are recognising and harnessing the power that AI can bring to their traditional contracting processes.

In fact, a survey of global procurement firms conducted by Deloitte reveals that 45% of CPOs are planning, piloting or already using AI to speed up their processes.

The role of AI in forward-thinking legal procurement strategies

Why? One main driver is that the value of contracts painstakingly negotiated by procurement can be engulfed by poor deal velocity and legal delays.

But it doesn’t need to be like this. Companies are now adopting and implementing automation tools to streamline contract negotiations. With negotiations driven by technology, speed is greatly improved. And with greater speed, businesses can finally realise the full value of contracts.

The challenges facing procurement

Legal has an unwanted – and often unjustified – reputation for a slower pace of work than other functions in the organisation, we all know that horrible phrase ‘stuck in legal’.. This can often be the case when it comes to the rather labour intensive field of procurement. But with the introduction of technology to help streamline those tasks, it doesn’t need to continue taking up precious hours of in-house counsel’s time.

One of the biggest challenges procurement faces is not realising the full value of a deal, as the time it takes to review and amend each contract iteration adds weeks or even months to negotiations. Each time there is a new version of a contract created, the contract review process starts again.

In addition, teams also face the issue of deal-blocking issues and identifying who's responsible for handling them. Is it legal? Sales? Operations? Product? A lack of clarity around issue ownership only adds to procurement delays, sapping the deal value in the process.

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How can these challenges be solved using technology?

Delays can be caused from day one of the negotiation process, and are only compounded as negotiations continue. Taking advantage of intelligent legal technology from the very start delivers immediate benefits. For example, by digitising the company’s risk playbook, businesses can begin using AI from the first moment and ensure the procurement process is fast tracked with speed and efficiency.

The risk playbook collates all clauses and positions that are deemed as acceptable to the business. Intelligent legal technology can scan and review new contracts and highlight any areas that pose risk. What would take a lawyer several hours to do is complete within minutes using the right technology. In-house counsel need only focus on the positions noted as risky, safe in the knowledge that all other positions are acceptable.

Intelligent legal technology

Another benefit to utilising technology throughout the procurement process is having access to an existing portfolio of contracts. A junior lawyer may not have much experience with the procurement contract they are asked to screen. Senior lawyers who may have relevant experience are tied up with their own priorities.

Technology negates this knowledge gap. By digitising all contracts, lawyers have digital assets to review and explore as required. With a few clicks, our junior lawyer can uncover a number of similar contracts with similar clauses. They can analyse how the business previously approached such positions, and how successful they were in doing so. Armed with knowledge, the junior lawyer now has years of additional experience added to their skillset – experience that will make contracting more efficient and accurate.

Technology can also be used to create comprehensive issues lists, detailing the clause language that needs amending, and who is responsible for finding a solution. In this way, lawyers can create a truly collaborative and transparent approach for everyone involved. It helps with each member of the team to understand the issues or stumbling blocks and how they can be resolved. Sharing redline contract iterations that highlight any potential clauses improves collaborations and directly addresses anything holding up the deal, so both parties can resolve them in the quickest way possible.

Contract negotiation tools help firms keep on top of their deals, saving time and money in the process, while ensuring all parties involved are aware of their individual responsibilities.

Forward-thinking organisations are already racing ahead

Forward-thinking firms are already taking full advantage of the time-saving advantages offered by AI technology. They're benefitting from quick turnarounds and better communication, which in turn helps them realise the entire value of procurement contracts.

Adapting to a quicker, more efficient way of working has already proved to be profitable to those who are integrating technology into their procurement processes. In fact, according to a report from IDG Research Services, companies that had improved their data intelligence by 20% would expect to see a 2.2% increase in year-on-year profitability.

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Using technology to power more efficient procurement processes

Strengthening data intelligence using legal technology means firms can be more aware of any potential gaps in their procurement processes, with the ability to actively review and improve their services. It also empowers firms to understand the real value of each agreement or contract they have in place, enabling them to address any issues and avoid coming up against the same stumbling blocks in future.

Over recent years, procurement has evolved into a technology-empowered internal process that drives much better strategic supplier relationships whilst focusing on the total cost of ownership, instead of a more ad hoc focus on costs per contract.

Early adoption firms are being empowered by technology, assessing their contracts and clauses with market norms. By ensuring they’re within market standards, it makes negotiating with the counterparty far easier, making it easier to reach an agreement faster and with fewer compromises.


Having a forward-thinking approach to procurement strategies means more firms benefit from less risk, a quicker, more transparent approach, and a far more efficient procurement process. And those who have already made the leap are already reaping the rewards.

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