As a leader in Artificial Intelligence and Natural Language Processing technology for the LegalTech space, it’s the time of the year to give our industry predictions. After a year of speaking with industry leaders, clients, and partners, here are Clearlaw’s trends for 2023.
1) Increased focus on underlying contract structures within LegalTech tools. For those of us who work in LegalTech, one of the most significant issues is the variation is legal documents. For technologies that rely on repeatable processes, variations in contract structure, wording, and labeling can create barriers in the adoption of LegalTech technologies and minimizes the value of these tools. To combat this, more CLM and ELM technologies are breaking contracts into clause or sub-clause levels on the backend of their tools. This allows contractual sections to be compared more easily and allows for the rapid assembly of contracts using preexisting clause variations.
2) The second trend we address is that AI technology will expand to support the emergence of the structured data modeling done in our first trend. While an organization or law firm will be able to build a robust clause or section library to empower them to produce and manage their contracts quickly, it is impossible to predict all the variations that they could possibly be seen within the marketplace. In working with vendors or clients, every organization will see contracts that will challenge their way their legal tools support them. Artificial Intelligence and Natural Language Processing technologies will become critically important for breaking down 3rd party paper contracts into structured data, allowing for the comparison of those contracts to legal playbooks and historical precedents.
3) Democratization of legal data. One of the emerging trends in LegalTech is the recognition that contracts are a rich source of data, not just for legal teams, but for businesses as a whole. Contracts govern the relationships between organizations, including your vendors, suppliers, clients, and partners. They are rich in data that can be leveraged to improve businesses top or bottom lines. For savvy legal teams, this presents an opportunity to change the perspective of legal teams, from a cost center to a strategic business partner.
Here are Clearlaw’s trends for 2023. Let us know if you have any others.