Could AI Transform Contract Negotiations in the Legal Sector?

With advancements in AI technology, tasks traditionally handled by lawyers, such as contract negotiation, are becoming increasingly automated.

This article explores the potential of AI to streamline contract negotiations and whether it can replace human lawyers entirely.

For example, lawyers are often overwhelmed by tedious tasks like reviewing contracts. AI can significantly reduce this burden by handling this work, allowing legal professionals to focus on more strategic aspects of their job.

Negotiating Beyond Human Speed

According to the recent experiments by Luminance, not only AI can review contracts, it can also negotiate the contracts and reach the agreement more rapidly than the humans do.

Thus, a new kind of AI system recently made a deal with another AI all on its own, without any humans getting involved. They reached the agreement really quickly, and a person just had to sign it at the end.

The AIs worked out the details of a real NDA contract between the company and one of their clients. In a demo of how it works, pictures of lawyers showed up on two screens while AI’s computer looked at and suggested changes to the agreement. NDAs, which are super important because they protect privacy, usually need a lot of checking by lawyers. This AI-based computer program helps by first pointing out problem areas in red. Then it changes those parts to make them better, all while keeping track of the changes during the negotiation and following the company’s usual contract preferences.

GPT-4 Outperforms Aspiring Lawyers

The negotiation software hasn’t been tried out in vast amount of real situations yet, but AI is getting better at legal assessments. A recent research found that GPT-4 outdoes many aspiring lawyers on the ethics test required by nearly all states for practicing law. In a practice exam like the Multistate Professional Responsibility Exam (MPRE), GPT-4 scored a 74% accuracy rate in responding to questions, doing better than the expected 68% national average for human test-takers.

The Future of AI in Law

Despite the efficiencies offered by AI, human oversight remains crucial. At this stage, lawyers still need to review the final contract to ensure all terms are acceptable. This human step is vital for maintaining trust and accountability in the legal process.

Concerns about AI replacing lawyers are prevalent, but experts believe that AI will not fully replace human legal expertise. Instead, AI will complement lawyers’ work, evolving the profession and requiring new skills and job types.

The examples provided clearly demonstrate how AI-based analytics is revolutionizing lawyers’ document management and negotiation processes. Additionally, features such as predictive analysis can uncover valuable, non-obvious insights from legal data. To discover the potential insights AI can derive from your data, book a demo of NextBrain AI today. Let us show you its capabilities firsthand with your data.

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