Efficient contract management is crucial for businesses to function. It is vital that contracts can be created, stored, accessed and amended with ease for an enterprise to understand its obligations and risks. Luminance has recently launched the third addition to the Luminance product suite, Luminance Corporate, to assist in-house teams through each stage of their contract lifecycle, from creation and templating to analysis and negotiation. AI technology like Luminance can transform contract management in enterprises and, by allowing them to rapidly unearth crucial risks and information in their contracts, place businesses in the best strategic position.
Contracts are the beating heart of every business
Contracts are the legally-binding promises at the heart of any business. They define the pivotal relationships that an enterprise has with its employees, suppliers, customers and any other pertinent parties, allowing them to understand what their obligations and responsibilities are. Non-compliance with a contractual obligation can lead to legal risk and reputational damage, therefore businesses must ensure that they have instant and in-depth insight into their contractual landscape and risk exposure.
Nonetheless, the data explosion means that many in-house legal teams currently have to work with huge volumes of contracts stored in multiple different locations, from email threads to cluttered spreadsheets on multiple different computers, even those of employees who have left the business. Lawyers waste valuable time and money trying to locate the right contract or find pertinent information, and in the process, risk missing something crucial. This can directly affect a business’s bottom line: a study conducted by the International Association for Contract & Commercial Management (IACCM) indicated that a company typically loses around 10% of its revenue as a result of poor contract management practices.
Further, increasingly strict and complicated regulations, such as General Data Protection Regulation (GDPR), mean it is unfeasible for in-house counsel to manually track through each document in order to assess compliance and respond accordingly. Technology offers lawyers and businesses a means by which to understand and manage their documents, with powerful AI technology in particular giving lawyers a wealth of insight into their contracts, for example, quickly understanding which customer contracts are up for renewal, or surfacing a clause that is non-compliant with data privacy legislation.
Luminance Corporate: AI for contract drafting and negotiation
Luminance’s AI-powered tool for General Counsel and their teams is revolutionising the work of in-house lawyers. The technology acts as an intelligent index of all contracts within an enterprise, whether pre or post-execution, providing lawyers with an interactive, visual overview of their contractual landscape. Through a unique combination of supervised and unsupervised machine learning, Luminance Corporate can read and form an understanding of any dataset irrespective of volume or language, presenting this analysis back to the lawyer and highlighting key information such as missing or non-compliant clauses or governing laws present. Indeed, Tim Shirley, Senior Legal Counsel at Ferrero, said: “By allowing in-house legal teams to rapidly understand all aspects of their contracts, Luminance helps to reduce time, resource and money, pushing legal teams to think and work differently and to help to shape the business for the future."
The Luminance Corporate product also introduces a revolutionary integration with Microsoft Word. The easy-to-use interface gives the lawyers access to Luminance’s powerful AI insights when they open any contract in Word. Not only is key information labelled, allowing lawyers to easily navigate the documents via parties, dates and governing laws, Luminance also visually indicates where potential risk lies within contract through a pioneering ‘traffic light’ system. Luminance analyses the company’s own templates, benchmarks and previously negotiated agreements to highlight which areas of a contract are acceptable or unacceptable in light of this analysis and visually represents this. Luminance can then even suggest preferred wording, vastly expediting the review.
The adoption of Luminance’s Corporate platform by in-house teams allows businesses to put themselves in the best possible strategic position. Don Riddick, Chief Legal Officer of Featurespace, the leading provider of Enterprise Financial Crime prevention software, added that: “Luminance Corporate expedites the review of legal documents and clarifies all of our contractual obligations, allowing us to continue outsmarting risk.” In this way, the sophisticated AI allows in-house lawyers to be one step ahead, to expand their remit and to become business enablers in their own right.
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