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Legal professionals are often bogged down with mundane, time-consuming tasks that take away from their ability to provide clients with the best possible service. Contract abstraction is one of these tasks that can require a significant commitment of time and resources. Automated contract abstraction offers an efficient and effective solution to this common issue.
Contract abstraction automation brings immense efficiency savings. It is a critical component in ensuring that all contracts are accurately drafted and reviewed quickly and efficiently. In this blog post, we explore automated contract abstraction and provide a handy checklist for getting started immediately.
How much time can a law firm save through automation?
It is clear that law firms that invest in improving their legal technology capabilities see improved performance, resilience and client relations. In Europe and the US, 63% of legal technology leaders reported an increase in profitability. Using better tools allows them to be more customer-centric and agile, as well as more efficient.
Reports indicate that 79% of customers expect their legal team to respond within 24 hours, which would be a high bar if all tasks had to be performed manually. For example, the estimated time needed for contract abstraction is around 5 hours. Automated contract abstraction tools reduce this time to less than 1 hour.
What is contract abstraction?
Contract abstraction is the process of taking a written contract and extracting relevant information to create an abstract. The extracted information should include details about the parties involved, the date of execution, the nature of the agreement, any payment or other obligations that arise from it, as well as any conditions that need to be fulfilled for it to be effective. It is important to note that contract abstraction should be done before the contract is signed, to ensure that all relevant details are included.
Why is contract abstraction important?
Contract abstraction is an important part of the legal process, as it ensures that all relevant information is accurately extracted from a contract. This allows lawyers to quickly review and evaluate contracts, ensuring they are enforceable and legally binding. It also helps prevent costly and time-consuming disputes in the future.
How should contract abstraction be done?
1. Read the contract
To begin with, it is best practice to read through the entire document and break down its contents into smaller chunks. This allows for deeper analysis of the document's legal implications and will provide a better understanding of what needs to be extracted.
2. Analyze the contract
Once the contract has been broken down into smaller parts, it is time to begin analyzing each section. This should include interpretation and consideration of any potential legal implications.
3. Create a checklist
Once each section of the document has been analyzed, make sure to create a checklist for each item that needs to be included in the abstract. The checklist should include any obligations or conditions that need to be fulfilled by one or both parties involved, as well as identifiers so that the contract can be easily referred back to if necessary.
4. Establish a format
Now it is time to choose a format for the abstract. Depending on the type of document, different formats may be needed. For example, contracts with multiple parties should have a separate line item for each party involved and any obligations they must fulfill.
5. Extract relevant information
Once the checklist has been created and the format established, all that remains is to take the relevant information from the document and transfer it into the abstract. This should include any key clauses or terms, as well as any payment or other obligations.
6. Structure the extracted data
It is important to structure the extracted information into a cohesive and easily-understood format. This should include any highlights for the key terms or clauses that are essential to understanding the contract.
7. Check for accuracy
Finally, check the abstract against its original source to make sure there are no discrepancies or errors. It is also important to double-check all identifiers so they can be easily referenced back to the contract if necessary.
A sample contract abstraction checklist
- Define rights and obligations, including payment and other obligations
- Identify all parties involved in the contract
- Establish any conditions or restrictions that need to be met
- Outline any changes, amendments, or additions to the original document
- Identify inconsistencies or contradictions
- Establish what the procedure for making updates and revisions to the contract is
- Create a compliance list with renewals, deadlines and progress reporting
- Ensure accuracy by double checking against the original document
Implementing contract abstraction processes
Contract abstraction is an important part of the legal process that allows lawyers to more accurately and efficiently review and evaluate contracts. During a time when more and more legal teams turn to AI-based tools to handle legal documents, manual contractual processes can no longer keep up. Automated contract abstraction is the solution to this issue, offering lawyers a faster and more efficient way to manage contracts.
How does automated contract abstraction work?
Automated contract abstraction tools use natural language processing (NLP) and advanced machine learning techniques to quickly extract relevant data from contracts. The software can help speed up the process by automatically detecting key clauses, terms, payment obligations, and other important pieces of information. It can also be used to alert lawyers when something is missing or needs attention, ensuring accuracy and completeness.
How to start using automated contract abstraction
To get started with automated contract abstraction, law firms should first assess their current document workflow and determine which tasks can be automated. It may also be worth exploring the various options available in terms of software and tools for automating contract abstraction. Additionally, law firms should also consider investing in training their legal team on the use of automated contract abstraction tools and techniques.
Once everything is set up, lawyers will be able to enjoy significant time savings when dealing with contracts. Automated contract abstraction will help them quickly identify key information, allowing them to focus only on the important areas that require manual review and analysis. This will result in a smoother and more efficient legal process, freeing up time for other tasks. Ultimately, automated contract abstraction is an invaluable tool that helps lawyers save valuable time without compromising accuracy.
Automated contract abstraction within the contract management framework
Automation of contract abstraction is essential in the context of contract management frameworks. Contract management requires comprehensive and accurate data to ensure efficiency and legal compliance. Automated contract abstraction helps lawyers accurately extract key information from contracts, which then can be used to build a centralized repository of contracted data that is easy to access and update. This allows for more streamlined processes within the organization, helping increase efficiency while minimizing errors.
The pros and cons of automating contract abstraction
Automating contract abstraction has its advantages and disadvantages. On one hand, it allows lawyers to save time and effort when dealing with contracts, making the process more efficient and cost-effective. On the other hand, there is a risk of error due to machine learning algorithms not always being 100% accurate. Additionally, some manual review may still be necessary in certain cases if more complex clauses are present.
The disadvantages can be mitigated through careful implementation of automated contract abstraction tools, as well as by providing the necessary training to the legal team. This will ensure that contracts are handled accurately and efficiently, allowing law firms to reap the benefits of automation without compromising on quality.
Automated contract abstraction tools
Automated contract abstraction tools are quickly becoming essential for lawyers and other professionals working with contracts. AI solutions like AnyLawyer easily extract relevant information from contracts, rephrase clauses, identify references to outdated regulations, and much more. These tools are highly scalable and customizable, helping law firms save time and effort when dealing with contracts.
An AI legal assistant can also help simplify the contract abstraction process, providing lawyers with a single tool that offers all the necessary features. AI assistants can provide automated advice based on specific cases and quickly identify any potential issues in contracts. This helps to further reduce manual labor and allows lawyers to focus only on tasks that require their expert knowledge.
Improving the contract management process through automation
By using automated contract abstraction tools, lawyers can make sure that contracts are quickly understood, accurately reviewed and correctly abstracted. This allows them to spend less time on mundane tasks and more time on higher-value legal work. Furthermore, automated contract abstraction also helps reduce the risk of costly disputes and ensures that all relevant information is accurately extracted from a contract.
