Five Reasons Why Automating Contracts Is a Good Idea for Companies and Legal Departments

Even today, everyday life in legal departments and law firms is characterised by time-consuming routine tasks. Young lawyers and secretarial staff in particular spend a large part of their working time on the tedious creation and review of documents by hand. Although digital trends such as legal tech and artificial intelligence have already established themselves across all industries, legal departments have so far benefited the least from technological progress. The fact that lawyers are generally hesitant about innovations may be due to the fact that they want to avoid security risks in their professional caution. On the other hand, the opinion prevails in professional circles that the working method of the legal mind cannot be replaced by machine processes. This view is also true for the solution of demanding cases that require legal assessment. However, for many standard legal tasks, digital solutions are available today and not only accelerate and simplify work processes, but also minimise the error rate and thus increase quality.


How does automatic document creation work?

Intelligent contract software can independently read out the individual text modules and formulations from all contracts already existing in the company, which are stored in PDF format, for example. From this, the application creates templates for all types of documents, for instance for employment contracts, licences, general performance claims, commercial leases or sales contracts. Once only the key data and the personal details of the parties involved have been entered, the software generates the entire draft contract in a few seconds. This template can then be edited and supplemented by hand as desired.

An AI-based and therefore adaptive software can remember the changes made manually and incorporate them into future documents on its own. If the application has been instructed and trained accordingly, it will also react to certain clauses and formulations that may be inadmissible. In addition, the software points out if individual passages in the document contradict each other or if text passages that are usually present are missing. In this way, the review of existing documents can be considerably simplified and accelerated through automation. If, for example, case law has recently declared a clause to be inadmissible, the automatic document check can immediately find the relevant passages in all affected contracts of the entire company. Many tools that are currently conquering the market want to make all these advantages even more widely available and also extend them to the relationship between lawyer and client. For example, there are cloud solutions with highly secure encryption techniques that allow clients to enter data and make changes to their drafts from anywhere. Since the lawyer can also access the documents in real time, all channels of information transfer are no longer necessary.


The five most important advantages of automation

– Time saving

– Increased efficiency

– Cost reduction

– Error reduction

– Increase in satisfaction


The biggest advantage of automated document creation and review is the reduction in time. Whereas today it takes legal professionals, lawyers and their staff many hours to create a contract manually, legal tech takes care of this process in seconds. Furthermore, automated document creation significantly increases the efficiency of legal workflows. This is because the application can not only generate a single contract much faster, but also draft a large number of similar documents in a correspondingly short time.

At the same time, the error rate decreases, given that mistakes are often made when entering data or copying text modules by hand. Another important factor is the cost savings through an automated process that frees up the capacities of expensive professionals. And finally, artificial intelligence in the law firm can also increase the satisfaction of all employees in the legal work environment. For those who no longer have to slave away for hours on end with boring routine tasks can use their time more sensibly and turn to interesting and demanding activities. After a certain adjustment period, which every new application requires, the use of legal operations will have a positive long-term effect on both job contentment and the performance of the entire company.


Why every company should embrace legal tech now

The demands on corporate legal departments have been steadily increasing over the past few decades and continue to grow rapidly. Once upon a time, legal counsel were only required to stake out the legal framework for business operations and draft legally compliant contracts. Legal departments were considered pure cost factors without added value. Today, however, corporate managements also expect their lawyers to make a measurable contribution to optimising profits. At the same time, in-house lawyers are facing an increasing number of legal enquiries, which are becoming more and more complex due to advancing globalisation and a flood of new law cases. Companies that do not jump on the bandwagon now and streamline their standard legal tasks are at risk of being overrun by the competition. And not only large companies, but also established lawyers urgently need to familiarise themselves with the new technologies in order to optimise their work processes. After all, technical innovations have long since prevailed among the clientele, and a person seeking legal advice today also expects the lawyer to be able to respond to enquiries and submissions digitally in the shortest possible time. After all, clients have their right to have their requests processed as quickly and error-free as possible using modern methods. Lawyers who want to remain fit for the future should therefore acquire basic knowledge in the IT field or seek fruitful cooperation with technology experts.

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