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1、PossibilitiesUnlimitedWhitepaperTwo-Thirds of Senior Legal Managers Find Their Contract Review Workloads Increased:How AI/Automation Solutions Can HelpWith 44%of senior legal managers concerned over noncompliance within the contract renewal process,and another 38%worried about lack of standardizatio

2、n,organizations need AI solutions that uncover risk,ensure compliance and streamline the workflow within the contract review process,a new study finds.A typical Fortune 1000 company manages between 20,000 to 40,000 active contracts at any given time,according to the Institute for Supply Management1.

3、This increasing number of contracts means that the day-to-day management and review of these documents is both burdensome and expensive.Recent events that have forced organizations into large-scale contract reviews have only added to that burden and expense.In April and May of 2022,Corporate Counsel

4、 Custom Solutions conducted,on behalf of EdgeVerve Systems Limited,an Infosys Company2,a survey of in-house professionals within Fortune 1000 companies on current trends and challenges associated with contract review and leveraging Artificial Intelligence or automation technology to address those ch

5、allenges.The questions posed to respondents to gather information included:Whether contract review workloads increased in recent years?What issues require the most time during contract review?What are the biggest challenges in managing contracts today?What percentage of companies use,have purchased

6、or have considered using an AI or automation solution to facilitate contract analysis and review?What are the reasons for not purchasing an AI/automation solution?Introduction2 2022 EdgeVerve Systems Ltd.Executive summaryThere were 83 respondents in the survey.The results were heavily senior managem

7、ent influenced,with almost six in ten(59%)of respondents either C-Level Executives,Upper Management,or General Counsel/Associate GC.Here are some of the most notable findings from the survey:Contract review happens at every stage:Every contract stage(Execution,Initiation,Authoring,Process and Workfl

8、ow,Ongoing Management and Compliance and Renewal)involves contract review for more than half of respondents.Workloads have increased:More than two-thirds(69%)of respondents report that their workload for contract reviews has increased in the past two years.Spending is expected to increase:More than

9、half(56%)of respondents expect spending for contract reviewers to increase over the next year.Contract review is the majority of management time:Almost six in ten(59%)of the respondents spend at least half their contract management time on contract review.Yet,review throughput is minimal:Almost half

10、 of respondents(48%)review five contracts or less each day.Satisfaction,speed and standardization:Respondents identified noncompliance(44%),slow contract turnaround time(42%),and lack of contract standardization(38%)as the biggest challenges.Most respondents dont actively use AI/automation:Only a th

11、ird(33%)of respondents actively use an AI/automation solution for contracts.Another 17%have purchased a solution but havent implemented it yet.Almost a quarter of respondents(24%)havent even considered a solution.ROI and privacy/ethical concerns:Inability to quantify the ROI(26%)and AI privacy/ethic

12、al concerns(25%)are among the top reasons for not purchasing an AI/automation solution for contracts.Most would save at Least$2,100 per month:An overwhelming majority(84%)of those using(or having purchased)an AI/automation solution for contracts anticipate saving at least 21 hours per month using on

13、e,which would result in a savings of at least$2,100 per month(and as much as$15,750 per month)on contract review.The survey results show that most respondents find that workloads and expenses for contract review are increasing,yet most respondents are also not actively using an AI/automation solutio

14、n for contract review,even though most who do use an AI/automation solution tend to save at least 21 hours per month in contract review time.3 2022 EdgeVerve Systems Ltd.A deep dive into key survey resultsThe survey uncovered results that showed most respondents have seen increased contract review w

15、orkloads and most of those in the survey expect increased contract review spending.Currently,most respondents do not actively use an AI/automation solution for contracts,even though most respondents who do use a solution are saving significant time and cost and increasing contract review throughput

16、using one.Here is a deep dive into the five key survey results:More than two-thirds of respondents say their workload for contract reviews has increased in the past two yearsIts not surprising that the workload for contract reviews has increased in recent years.When the COVID-19 pandemic disrupted b

17、usinesses in March 2020,many organizations had to conduct a large-scale review of their contracts to determine how the Force Majeure clause in their contracts addressed the disruption.Then,in 2021,the Financial Conduct Authority replaced the London Interbank Offered Rate(LIBOR)rate with the Secured

18、Overnight Financing Rate(SOFR).Both events forced large-scale contract review efforts.The survey results illustrate a significant increase in the workload for contract reviews in the past two years:What percentage has your workload or your departments workload for contract reviews increased in the p

19、ast two years?Figure 1:Increase in Contract Review WorkloadNot only does the survey show that 69%of respondents have experienced an increase in their contract review workload,but 55%of respondents have experienced at least a 20%increase in their contract review workload.And 21%have experienced at le

20、ast a 50%increase.4%Increased by 100%or more17%Increased between 50-100%34%Increased between 20-50%13%Increased by less than 20%14%Dont Know6%Decreased11%Stayed the same69%say their departmentworkload has increased in the past 2 years4 2022 EdgeVerve Systems Ltd.More than half of respondents expect

21、spending for contract reviewers to increase over the next yearNot surprisingly,when theres an increase in the contract review workload,theres also an increase in spending for contract review services.More notably,most respondents expect spending on contract review services to continue to increase.Do

22、 you expect your spending on the contract reviewers to change over the next year?Figure 2:Expected Increase in Spending for Contract Review ServicesNot only does the survey show that 56%of respondents expect spending for contract review services to continue to increase,but nearly one-third(30%)expec

23、t spending for contract review services to increase more than 20%.So,what are the biggest reasons why contract review workloads are increasing and spending for contract review services rising?The pandemic and supply-chain issues account for some of the increase,but regulations have also played a rol

24、e.“There are several reasons,including Covid and supply chain disruptions that are forcing changes to the way contracts and contractual obligations are documented,”says Swaminathan Natarajan,Global Product Head for XtractEdge at EdgeVerve“New regulations,like the move from LIBOR to SOFR,and complexi

25、ties in enforcing contracts because of macroeconomic and supply chain disruptions have resulted in a significant increase in contract reviews”Only a third of respondents actively use an AI/automation solution for contracts;almost a quarter of respondents havent even considered a solutionGiven the in

26、creased workload and increased expenses for contract review,organizations are implementing AI/automation technology solutions,right?Not so far in fact,most are not currently using a solution.30%I expect spending will increase by less than 20%23%Dont Know6%I expect spending will decrease by less than

27、 20%14%I expect spending to stay the same26%I expect spending will increase by more than 20%56%say they expect spending for contract reviewers to increase over the next year 5 2022 EdgeVerve Systems Ltd.Have you considered/purchased an AI or automation solution to facilitate contract analysis and re

28、view?Figure 3:Percent of Respondents Using an AI/Automation Solution for Contract ReviewOnly a third of respondents(33%)are currently using an AI/automation solution to facilitate contract analysis and review,which means that two-thirds are not currently benefitting from AI and automation in contrac

29、t analysis and review.Also,nearly a quarter(24%)havent even considered the purchase and use of an AI/automation solution for contract review.That leaves a significant percentage who dont fall into either category.One notable result is that about one in six respondents(17%)have purchased a solution b

30、ut havent implemented it yet.So,what are the challenges with implementing an AI/automation solution that would cause so many respondents to have bought a solution,but not implemented it yet?“AI systems are complex to manage,especially when you attempt to drive the solution using raw toolsets.The com

31、plexities include managing and validating training data,and investing efforts to improve accuracy and outcomes,”Natarajan says.“It takes time and effort from the legal team to train the algorithm.Once the AI model is trained,the efforts invested by legal teams will pay significant dividends.”One of

32、the top reasons for not purchasing an AI/automation solution for contracts are privacy/ethical concerns.So,how do you address the privacy/ethical concerns associated with using AI?Yes,we actively use an AI/automation solution for contracts33%17%8%24%18%40%30%20%10%0%Yes,we have purchased a solution,

33、but havent implemented it yetYes,we have considered a solution,but havent purchased oneNo,we havent considered a solutionDont Know6 2022 EdgeVerve Systems Ltd.“Its important to control the data used to train the model and avoid including any personal or private information in any of the model parame

34、ters,”Natarajan says.“Then,you monitor and manage the model for its performance,and,finally,augment the AI decisions with human verification for a percentage of requests to confirm the accuracy of the model without introducing bias.”An overwhelming majority of those using(or having purchased)an AI/a

35、utomation solution for contracts either are or anticipate saving at least 21 hours per month using oneWhile a majority of respondents are not currently using an AI/automation solution for contract analysis and review,half of the respondents have at least purchased a solution.So,how many of them are

36、either currently saving on contract review hours or expect to save on them(once they complete their system implementation)?Almost all of them.What percentage has your workload or your departments workload for contract reviews increased in the past two years?Among those that answered the following qu

37、estion:Have you considered/purchased an AI or automation solution to facilitate contract analysis and review?“Yes,we actively used an AI/automation solution for contracts,”and“Yes,we have purchased a solution,but havent implemented it yet.”Figure 4:Number of Hours Saved(or Anticipated Saving)on Cont

38、ract Review Using AI/Automation Solution4%None,we dont use it12%10 to 20 hours4%More than 200 hours38%41 to 100 hours42%21 to 40 hours84%say they save(or anticipate saving)at least 21 hours per mouth using an AI/automation solution 7 2022 EdgeVerve Systems Ltd.Not only are an overwhelming majority(8

39、4%)of respondents using(or having purchased)an AI/automation solution currently(or anticipate)saving at least 21 hours per month using one,but almost all of them(96%)are currently(or anticipate)saving at least ten hours per month using one.And 42%of those respondents are currently(or anticipate)savi

40、ng at least 41 hours per month using one.Given the increasing contract review workloads and rising costs,an AI/automation solution is clearly paying dividends for those that are or expect to be using them.Sixty-eight percent of AI/automation solution users review six or more contracts per day vs.onl

41、y 24%of non-solution usersThe final stat in the deep dive statistics is the comparison of throughput in terms of contracts reviewed per day for respondents not currently using an AI/automation solution vs.those who are currently using a solution.Here are the percentages for those not currently using

42、 an AI/automation solution:Average Number of Contracts Reviewed Per Day For Respondents without AI/Automation SolutionsFigure 5:Average Number of Contracts Reviewed Per Day for Respondents without an AI/Automation SolutionLess than one-quarter(24%)of respondents not currently using an AI/automation

43、solution reported a throughput of six contracts or more reviewed per day.Only 9%of those respondents currently review more than ten contracts per day.20%dont know9%9%More than 1015%6 to 106%017%1 to 233%3 to 525%=8 2022 EdgeVerve Systems Ltd.Average Number of Contracts Reviewed Per Day For Responden

44、ts Without AI/Automation SolutionsFigure 6:Average Number of Contracts Reviewed Per Day for Respondents without an AI/Automation SolutionConversely,more than two-thirds(68%)of respondents who are currently using an AI/automation solution reported a throughput of six contracts or more reviewed per da

45、y.And nearly a quarter(23%)of those respondents currently review more than ten contracts perday.Thats a considerable difference in throughput between those who currently use an AI/automation solution and those who dont.Addressing todays contract review challengesAs illustrated by the survey results,

46、the challenges of keeping up with the demands for contract review have never been greater.The use of an AI/automation solution can address those challenges.Here are five of todays contract review challenges and how they can be addressed with the help of an AI/automation solution:Increase throughput

47、to handle large-scale reviews As evidenced by the need to determine how the Force Majeure clause in their contracts addressed the disruption resulting from the pandemic in 2020 and the replacement of the LIBOR rate with the SOFR rate in 2021,large-scale contract review efforts are becoming more comm

48、onplace.The use of an AI/automation solution can increase the throughput for contract review significantly.Reduce instances of contract noncomplianceContract noncompliance was identified by survey respondents as the biggest challenge they experience today in managing contracts and it can be hugely e

49、xpensive for your organization in the form of penalties for failing to timely execute contract terms.AI-powered analysis using an AI/automation 23%More than 10 45%6 to 1014%1 to 218%3 to 568%=9 2022 EdgeVerve Systems Ltd.solution can help your organization proactively track contract dates and terms

50、to stay compliant and avoid those penalties.Facilitate identification and extraction of key clauses and termsRespondents were asked:“What key issue do you or your team spend the most time looking for in contract review?”The top four answers all involved identification and extraction of key clauses a

51、nd terms within contracts:1)Identifying Key Clauses&Terms,63%;2)Risky Clause Identification,57%;3)Identifying Termination&Renewal Terms,52%;and 4)Identifying Default Clauses,45%.An AI/automation solution can help reduce the time spent looking for these key issues in contract review.Standardize contr

52、act languageOne of the biggest issues that organizations face is the inconsistency of the language within contracts,which can lead to potential revenue lost or penalties when contracts are generated that fail to take advantage of best practices for contract language in previous contracts.Contracts a

53、lso often tend to be siloed within an organization,further complicating the effort to standardize.An AI/automation solution enables you to leverage a repository of existing contracts to facilitate preparing new contracts and take advantage of those language best practices utilized in previous contra

54、cts.Streamline contract turnaround timeBased on survey responses,contract review happens in every phase of the contract lifecycle for more than half the respondents:1)Execution,64%;2)Initiation,64%;3)Authoring,63%;4)Process and Workflow,60%;5)Ongoing Management and Compliance,58%and 6)Renewal,53%.An

55、 AI/automation solution enables your organization to expedite review at every phase of the contract lifecycle by enhancing contract review and analysis streamlining contract turnaround time.10 2022 EdgeVerve Systems Ltd.ConclusionMost respondents in the survey indicated that workloads and expenses f

56、or contract review are increasing,yet most respondents are also not actively using an AI/automation solution for contract review.However,most survey respondents who do use a solution save at least 21 hours per month in contract review time,and more than 40%of those respondents save at least 41 hours

57、 per month.So,how do organizations address maximizing the benefits of an AI/automation solution?The answer is to ensure that the legal team reviewing contacts has the tools they need to understand the scope of the problem,and then harness the technology to achieve greater efficiency.“In order to max

58、imize the ROI from the tool,companies should initially utilize the AI contract analysis solutions to uncover the risks associated with their contracts,”Natarajan says.“In the initial phase,AI/automation must be seen as a tool to augment the legal user to better their decision-making rather than to s

59、ubstitute those decisions.Once the tool has reached the desired maturity level established within the organization,the product should be leveraged to uncover the various conditions set out in the contract and model operations around those conditions.”1.“Contract Analytics:The New Frontier for Gainin

60、g and Sustaining Competitive Advantage”,American Bar Association,Nov.14,2019.https:/busines-slawtoday.org/2019/11/contract-analytics-new-frontier-gaining-sustaining-competitive-advantage/2.EdgeVerve Systems Limited,An Infosys Company https:/ 2022 EdgeVerve Systems Ltd.About EdgeVerveEdgeVerve System

61、s Limited,a wholly-owned subsidiary of Infosys,is a global leader in developing digital platforms,assisting clients to unlock unlimited possibilities in their digital transformation journey.Our purpose is to inspire enterprises with the power of digital platforms,thereby enabling our clients to inno

62、vate on business models,drive game-changing efficiency and amplify human potential.Our platforms portfolio across Automation(AssistEdge),Document AI(XtractEdge),and Supply Chain(TradeEdge)helps inspire global enterprises to discover&automate processes,digitize&structure unstructured data and unlock

63、the power of the network by integrating value chain partners.EdgeVerve,with a deep-rooted entrepreneurial culture,our innovations are helping global corporations across financial services,insurance,retail,consumer&packaged goods,life sciences,manufacturing telecom and utilities,and more.Visit to kno

64、w more.EdgeVerve.Possibilities Unlimited.Copyright 2022 EdgeVerve Systems Limited,Bangalore,India.All Rights Reserved.This documentation is the sole property of EdgeVerve Systems Limited(“EdgeVerve”).EdgeVerve believes the information in this document or page is accurate as of its publication date;s

65、uch information is subject to change without notice.EdgeVerve acknowledges the proprietary rights of other companies to the trademarks,product names and such other intellectual property rights mentioned in this document.This document is not for general distribution and is meant for use solely by the

66、 person or entity that it has been specially issued to and can be used for the sole purpose it is intended to be used for as communicated by EdgeVerve in writing.Except as expressly permitted by EdgeVerve in writing,neither this documentation nor any part of it may be reproduced,stored in a retrieva

67、l system,or transmitted in any form or by any means,electronic,mechanical,printing,photocopying,recording or otherwise,without the prior written permission of EdgeVerve and/or any named intellectual property rights holders under this document.About XtractEdgeXtractEdge is a comprehensive suite of Do

68、cument AI platform&products that enables enterprises to extract actionable insights from a wide variety of enterprise documents,contracts,and legal agreements.XtractEdge is recognized as one of the top Document AI platforms for large enterprises delivering on the promise of quicker time to market,superior customer experience,faster claims processing and underwriting,efficient contracts management for smarter business decision you ready to unleash the value of data and drive business growth?Write to us at: