Use of AI Technologies in Contract Management Automation: Problems, Prospects

Artificial intelligence technologies (AI), in the form of expert systems, machine learning and natural language processing, have long been used in contract management automation. With the development of generative artificial intelligence (GenAI) and large language models (LLM), the possibilities of using AI have been significantly expanded. Many people are using GenAI (ChatGPT, Gemini, GigaChat, YandexGPT, etc.) in their routine or work tasks. The question arises of how to use AI to improve the efficiency of contract management. The topic is very relevant, information about new AI solutions appears every day. Individual works on this topic have not yet been written because of the quick development of AI technology. Research objectives: - determine how AI technologies implement in contract management automation; - identify the main problems; - highlight development prospects. To achieve the goals, the following objectives tasks were formulated: - determine what contract management lifecycle is; - analyze how contract management is automated in Russian and foreign companies, what technologies are used; - analyze the possibilities of using AI technologies. The sources of the analysis were: foreign and Russian surveys that were conducted by large news agencies, consulting groups, vendors on the topic of AI and contract management. Many reports were produced in 2023-2024 after the release of generative AI. Large companies’ practical experience of using AI in contract management automation was also reviewed. As a result of the study, the following conclusions were drawn: 1. Contract work is a complex process that begins with negotiations and ends with the execution of the contract. It is necessary to determine the owner of the process for concluding contracts, to allocate a separate division that will be responsible for all data and analytics on contracts. Every company should have a Data Management Plan. 2. AI technologies are used to varying degrees in all contract management lifecycle. AI can only be considered as a good tool/legal assistant at the current stage of development. AI can prepare a draft of a simple contract, make a brief, conduct an analysis of typical risks and perform other routine tasks. It is necessary to train models based on big data more thoroughly. 3. The most anticipated areas of AI development are document generation, risk analysis, metadata extraction, document management. The ability to process massive amounts of unstructured data quickly and accurately will revolutionize the contracting process. 4. As opportunities grow, new risks/challenges arise. The work examines 14 current problems, including problems of accuracy (“hallucinations”), data protection, and lack of training data. The speed of technology development depends on the speed of solving these problems. 5. With the development of generative AI and the advent of GPT models, several trends have emerged: - democratization of access to AI. Medium and small companies and vendors have the opportunity to implement AI (GPT) in their solutions. – microsoftization, when lawyers automate processes not with specialized LegalTech solutions, but with general technological solutions (for example, 1C, Bitrix). Thus, it seems that in the future contract management will be integrated into large ERP, HRM and CRM systems. 6. The effectiveness of using AI depends, among other things, on the maturity of the technical architecture and internal processes in the company. As part of the study, a preparation plan for the introduction of AI was developed. This research may be useful to colleagues who automate contract management, LegalOps specialists, and heads of legal departments. The work can be used to build a digital transformation plan of contract management.