Contract management software, an essential business technology often overlooked by many, is gaining prominence with the integration of generative AI. This sophisticated technology streamlines the drafting, storage, search, and management of commercial agreements for various departments within a company.
Although the financial value of the contract lifecycle management market has historically been modest, estimated at around $1.5bn in 2022, recent developments have sparked a surge in demand. Companies are increasingly recognizing the benefits of digitizing contracts to enhance efficiency and transform them into data-rich digital documents, a transformation that generative AI is poised to accelerate.
In response to this growing trend, established legal tech companies have been engaging in mergers, acquisitions, and partnerships with AI-driven contract management software providers. For example, DocuSign acquired Lexion, a company known for its generative-AI powered contract management software. Similarly, Icertis announced a partnership with Evisort, combining their respective technologies to enhance contract management capabilities.
With the legal industry being one of the industries most impacted by generative AI, experts anticipate continued growth in the contract management market. Investors have also shown interest in this sector, such as private equity firm KKR acquiring a majority stake in Agiloft, a contract management software provider.
As the industry experiences further consolidation and technological advancements, users are looking for comprehensive solutions that address a wide range of contract management needs. Integrating generative AI into contract management software offers innovative possibilities, including AI-driven redlining features that can assist lawyers in contract review and editing tasks.
While the adoption of generative AI in contract management software is still in its early stages, companies are optimistic about the potential cost savings and efficiency improvements it can deliver. For instance, Hoare Lea, an engineering consultancy, anticipates significant cost reductions in contract review with the use of AI-powered CLM software.
In conclusion, the integration of generative AI into contract management software represents a significant advancement in the legal technology landscape. By enabling users to streamline contract processes, enhance data insights, and improve decision-making capabilities, this technology is shaping the future of contract management for businesses worldwide.
