Implementing any new software at an organization is always a pain in the butt. Especially if its legal tech.
First, you have to deal with salespeople who promise you the moon, but then you later discover the software never lives up to their promises.
Then, you have to deal with executive decision-makers who make the purchasing decisions. Before implementation, they frequently bust your chops by asking about the costs of the software and requesting a detailed financial analysis on the expected return on investment (ROI) of the software purchase.
Last, once you get through those hurdles, you have to work with the technical implementation teams at your organization and discover the software you purchased isn’t as turnkey as the vendor said it was. As a result, your technical implementation teams take months to stand up the software because they have backlogs of their own and have other projects their managers have prioritized that are different from yours.
Before considering any new software, particularly AI-assisted contract review software, you might be asking yourself the following questions:
- Will all these headaches be worth it?
- How can I streamline the entire implementation process so it doesn’t take months?
- How can I be guaranteed there’s a clear ROI for this software?
The ROI of implementing AI-assisted contract review software in your organization can be significant. Several factors can contribute to the extent of the positive financial impact: company size, contract volume and complexity, and the specific AI software itself. Here, we discuss some areas where AI-assisted contract review software delivers clear results.
Why Use AI in Contract Review?
Today, the legal industry is at the cusp of a technological revolution. The role of Artificial Intelligence (AI) in this transformation is pivotal, particularly in contract review, compliance checks, and legal research.
Chief Justice John Roberts of the US Supreme Court recently issued his 2023 Year-End Report on the Federal Judiciary. In it, he said the following:
“AI obviously has great potential to dramatically increase access to key information for lawyers and non-lawyers alike…I predict that human judges will be around for a while. But with equal confidence I predict that judicial work — particularly at the trial level — will be significantly affected by AI.”
Chief Justice John Roberts of the United States Supreme Court
Picture this: There are piles of healthcare contracts awaiting the daunting task of ensuring HIPAA compliance. It’s a time-consuming task, ripe for human error. This is where AI technologies, like LegalMente AI, can step in. It can be your legal eagle with a silicon brain to do the heavy lifting in contract review, reducing inaccuracies while also greatly reducing the duration of the contract review.
By automating these labor and cost intensive tasks, AI enables healthcare, legal, and compliance professionals to focus on the core aspects of their business.
AI Helps Achieve Speed and Reduce Costs
Time is money, especially when it comes to legal work. And legal contract review can be a notorious time-guzzler, escalating the billable hours.
According to Gartner research, 90% of legal staff report feeling they slow down others when they execute their tasks slowly.
Also, according to Gartner, 40% of legal department managers report that legal takes more time than necessary managing contract risks.
Finally, we have this statistic from Gartner:
For the average company, legal’s slow speed adds 6.5 days to a company’s launch of a new product. In dollar terms, this delay translates into $7 million in revenue losses from delayed product launches that can be directly traced back to slow legal speed.
Gartner, How To Speed Up Legal Reviews
AI software like LegalMente AI analyzes contracts in minutes. This speed translates to considerable cost savings and reduced opportunity costs, which is critical for businesses looking to improve their bottom line.
AI Helps Create a Safety Net in Compliance and Risk Management
In addition to minimizing cost, risk mitigation is another benefit that can be acheived by AI.
For example, a single HIPAA violation can result in the following based on a tier structure:
- Tier 1: Minimum fine of $100 per violation up to $50,000
- Tier 2: Minimum fine of $1,000 per violation up to $50,000
- Tier 3: Minimum fine of $10,000 per violation up to $50,000
- Tier 4: Minimum fine of $50,000 per violation
But that’s not all. There are criminal penalties too. HIPAA violations can also result in the following based on a tier structure:
- Tier 1: Reasonable cause or no knowledge of violation – Up to 1 year in jail
- Tier 2: Obtaining PHI under false pretenses – Up to 5 years in jail
- Tier 3: Obtaining PHI for personal gain or with malicious intent – Up to 10 years in jail
This can all be very expensive and not a risk anyone would want to take.
Adopting AI can significantly alleviate these risk exposures. With recent advancements in Natural Language Processing (NLP) and Large Language Model (LLM) capabilities, AI’s accuracy is getting much better over time. AI-assisted contract review software caters to the complexities of legal language with the precision of a seasoned, expert lawyer, ensuring efficient compliance and reducing oversights. It keeps a microscopic eye on every clause and condition, which is particularly crucial where adherence to HIPAA regulations is paramount.
Human-AI Partnership – Best of Both Worlds
AI in legal isn’t necessarily about replacing lawyers. It’s about augmenting their expertise.
It’s important to always include a human-in-the-loop when using AI to help mitigate risk, speed up contract review, and reduce costs.
For instance, even though LegalMente AI has a Patent Pending AI technology that’s trained on expert legal minds to efficiently review contracts and flag for issues, it also has a feature in the software that allows clients to contact a licensed attorney in case they want a human to evaluate the contract review results from the AI.
This collaboration between Human and AI truly enables one to achieve maximum benefits.
AI Is Not the Future; It’s Now
Implementing AI in legal contract review is no longer a forward-thinking strategy; it’s a current necessity.
If you could take away one thing from this article, you can be sure that AI-assisted legal contract review software, at a minimum, will generate a return on investment by:
- Helping to get your contracts reviewed in minutes not days
- Helping to prevent millions of dollars in revenue losses due to slow legal speed
- Reducing fines from HIPAA violations that could rack up to tens of thousands of dollars (or even hundreds of thousands)
- Helping to prevent going to jail for years due to HIPAA violations
Even the American Bar Association agrees that the ROI is clear – time savings, cost efficiency, accuracy, higher quality work, creative exploration, scalability, and enhanced human expertise. A suitable AI contract review software can exemplify this transformation, making it an indispensable tool for reviewing legal contracts, especially in the healthcare industry.
LegalMente AI – The Future of Legal Work
To streamline the process of reviewing your healthcare and non-healthcare contracts, sign up for a free LegalMente AI user account. LegalMente AI offers a user-friendly platform that simplifies the review of legal contracts, ensuring that your agreements meet all legal requirements.
