Using AI Contract Analysis to Achieve Deeper and Clearer Preparedness for Brexit
By David Silbert, Director at legal AI company Seal Software*
For many, 29 March next year means one thing: Brexit.
Confusion and uncertainty around the UK’s exit from the European Union persist as government officials work to resolve the logistical fallout from the referendum. But uncertainty is no excuse for inaction.
Businesses must assess Brexit’s impact on their operations and assets. Concurrently, their legal departments should prepare for the contractual challenges that lie ahead.
To start, businesses need to ask some essential questions, such as: ‘What is Brexit’s impact from a commercial or a risk management standpoint?’, ‘What contract clauses must be reviewed?‘, and ‘How can the affected contracts be centralised quickly and easily to facilitate any necessary analysis and remediation?’
This work may seem daunting, but for those businesses and legal departments wondering how to address Brexit, artificial intelligence (AI) is the answer. AI enhances and accelerates the work of extracting and analysing contractual terms to ‘future proof’ against any Brexit outcome.
Traditionally, businesses have struggled to answer these types of questions, as they evaluate and address governmental and regulatory changes such as Brexit. Businesses typically attempt to answer these questions manually, with teams of people scanning shared drives and repositories to locate contracts and then reading each one to find relevant wording.
This is a highly labour-intensive, time-consuming, and expensive process, prone to both human error and subjective bias. Clearly, if a company hasn’t started this manual process by now for Brexit, they are unlikely to complete it in time.
Alternatively, the automated discovery and extraction of contractual information through AI allow businesses to identify contracts in need of attention, saving money and time in addressing Brexit. Specifically, AI enhances the identification of relevant Brexit clauses by analysing structured and unstructured data to both consolidate data for enhanced comprehension and facilitate decision making at the contract and enterprise levels.
Leveraging AI takes a company from uncertainty to insight while securing a commercial advantage by:
- finding contracts requiring review, remediation and repapering pre-Brexit,
- measuring the impact on supply chains and the cost of meeting contractual obligations post-Brexit, and
- mitigating the negative impact by taking action as a result of gained insight.
Seal Software, by way of example, looks at fundamental Brexit topics like governing law, jurisdiction, and locations, as well as complex Brexit topics like change of law and force majeure clauses – not just identifying the presence of such language, but looking within these clauses to automate the extraction of critical information like costs and termination rights buried therein.
Further, it leverages customised business rules to automate the delivery of answers as business intelligence necessary for appropriate planning and risk mitigation.
In so doing, AI makes it possible to craft a crucial framework that goes further than simply answering a question. Indeed, it facilitates the asking and answering of additional detailed questions for a series of related topics.
For example, a typical Brexit query might ask: ‘What is the applicable currency under the agreement?’
A good start. But, proper AI will provide answers to additional, related terms and provisions such as payment terms, price, exchange rates, currency hedging, currency re-pricing, and termination rights related to currency.
AI now provides businesses with the means of mastering contractual data across the enterprise, driving deeper and more efficient insights into the consequences of Brexit. This drives down costs while increasing speed and accuracy. Reducing risk and uncertainty with AI-driven tools provides businesses with a competitive advantage.
Simply put, using AI is the clear choice to address the uncertainty of Brexit.
For more advice on preparing for the contractual challenges of Brexit listen to Seal’s Brexit Insight webinar on-demand.
* Artificial Lawyer is proud to bring you this Sponsored Thought Leadership article by David Silbert, a Director at Seal Software, where he designs and implements client solutions.
Prior to Seal, David served as a Director with Apogee Legal and practiced law focusing on private equity and capital markets transactions, as well as complex commercial litigation for clients in the financial services, energy, and real estate industries.