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Generative AI and CLMs: The Present and Future of Contract Lifecycle Management

  • Legal Operations
  • 2 Mins

Generative AI momentum continues to build in legal, with contracts being an area where it’s expected to have a meaningful impact. Ziad Mantoura, Senior Vice President and General Manager of Epiq’s Enterprise Legal and Consulting Services, recently shared his vision of generative AI in the contracts space, including his thoughts on where it has and will deliver value. 

Mantoura recalls that in early 2023, some of the first generative AI features were available within Contract Lifecycle Management (CLM) software. These features helped draft aspects of contracts, for example, you could “right-click,” highlight a clause, ask it to “make it mutual” and it would. This showed what the technology was capable of, but didn’t deliver significant value, considering the needs of many large enterprises. 

CLMs and AI in the Future

Large-volume contracting businesses need a high level of standardisation in their contracts and the flexibility to get the deal done with their counterparty. If every time a request to make a clause mutual results in some variation, that’s not helpful. Similarly, it’s also not helpful if a large language model creates a clause with no rules around what’s acceptable to the customer, the business, its legal policy, or a preferred way of drafting.

Mantoura sees the next evolution of CLM where the software links live negotiations back to a contract repository via Vector BDs and/or a RAG-based methodology. Taking the same “Make this mutual” request, the LLM will go back to the repository to make it mutual in a way that the business has done previously in other approved contracts. This achieves more standardisation and presents a challenge as there may be documents in the repository that the business wishes were never signed. An agreement may have been signed because the counterparty had the power, but that doesn’t mean future agreements should be based on it. As a result, there is a need for either a golden source repository of contracts to reference or a playbook process. CLM providers are building alternatives for both in their products.

While highly useful, playbooks are time-intensive to produce. Rather than relying on senior attorneys to start from a blank page or an inappropriate template, generative AI can produce the playbook or get it 80 percent of the way there. Playbooks can be populated based on what’s present across a sample of agreements, first markups, and final versions, creating a working playbook and heading toward effective negotiations quicker.

These developments are getting contracts professionals closer to a world where they’re not just requesting to “Make a contract mutual” but where they can also “Give the same concession that the business gave this customer six months ago” or ask, “Is there a pre-approved compromise position the business can offer this customer?” that follows the approved playbook. This is not just saving time; it’s allowing the legal department to avoid negotiating every agreement and confidently allow certain contracts to be managed by salespeople, product, or business leaders because they have the right parameters and technology to assist them.

Read the full interview for more of Ziad Mantoura’s thoughts on where generative AI will deliver legal value and practical advice on how to get ahead of this wave. 

The contents of this article are intended to convey general information only and not to provide legal advice or opinions.

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