Businesses are increasingly exploring how technology can unlock valuable insights from the agreements they hold, a process often referred to as "contract intelligence". This approach aims to leverage artificial intelligence (AI) and modern contract lifecycle management (CLM) tools to manage risk, protect revenue, and drive growth, according to Tom Dunlop, CEO of Summize.
The concept of "contract intelligence" is gaining prominence within the legal tech industry. While the term itself may be recent, Mr Dunlop argues that the intelligence contained within contracts – such as renewal dates, pricing terms, obligations, liabilities, rights, and restrictions – has existed for decades. The significant shift lies in the enhanced ability to locate, interpret, and act upon this information effectively.
Historically, extracting meaningful intelligence from contracts was a challenging and often unsustainable endeavour. Agreements typically resided in physical filing cabinets, shared digital drives, or basic repositories. Once signed, they frequently received limited attention until a specific need arose, such as a dispute, an approaching renewal, or a corporate merger. At such points, accessing required information often involved manually reviewing dozens, if not hundreds, of documents. Mr Dunlop, a former tech general counsel, noted that connecting information across multiple agreements was "almost impossible without significant time and resources."
Even intermediate digital solutions like 'Ctrl+F' search functions, Optical Character Recognition (OCR), and basic image and text recognition technologies offered limited utility. While these tools could read documents and identify specific text, they fell short of unearthing comprehensive intelligence at scale or interpreting it into the actionable insights needed to structure contract data effectively.
Modern AI and CLM technologies are altering the economics of this process by transforming static documents into dynamic sources of knowledge. One primary application lies in strengthening how businesses manage risk.
Managing crucial dates, for instance, can be surprisingly complex for organisations with thousands of contracts. Knowing precisely when agreements renew, expire, or trigger specific obligations is vital. The right technology can automatically extract these dates and provisions, enabling businesses to anticipate milestones, avoid unwanted automatic renewals, and ensure critical terms are not overlooked.
This principle extends to identifying contractual "red flags." While legal professionals have long scrutinised and compared clauses, AI can perform this task with greater consistency and at a significantly larger scale. Clauses can be automatically benchmarked against an organisation’s preferred positions, established playbooks, or even extensive archives of previous agreements. This capability allows for the rapid surfacing of potential deviations, directing attention to areas requiring the most scrutiny.
The utility for risk mitigation continues beyond the signing of a contract. Contracts represent ongoing business commitments, and circumstances can evolve throughout their lifecycle. Should a provision change, an obligation be missed, or a specific contractual condition be met, technology now exists to help identify and surface this information automatically, prompting appropriate action.
This technological advancement presents a considerable opportunity for businesses. Much of the intelligence vital for managing contractual risk has always been present but has been difficult to access at scale. Contracts can now function as dynamic knowledge sources, assisting organisations in identifying potential issues earlier, responding more proactively, and enhancing risk management throughout the entire lifecycle of an agreement.
Beyond risk management, contracts contain substantial commercial intelligence that many businesses have not effectively utilised. This means contracts can contribute to revenue generation as well as prevent financial losses.
An example of this is addressing revenue leakage. A contract might stipulate a price increase after a particular period, minimum purchasing commitments, or specific billing conditions. If these terms are not accurately reflected in invoicing or broader commercial processes, revenue can inadvertently be lost. Extracting the correct intelligence from contracts can help pinpoint these discrepancies, providing commercial teams with visibility into potential areas of revenue loss.
The same analytical power can be applied to identifying opportunities for upselling and cross-selling. For businesses serving hundreds or thousands of customers, understanding which clients possess particular products or services, or which have one service but not another, can be challenging. Contract intelligence can reveal patterns suggesting which customers are best positioned for discussions about additional offerings.
Sales teams can utilise this intelligence to prioritise accounts and engage in more informed conversations. Customer success teams can identify opportunities to expand relationships, while commercial leaders gain a clearer perspective on which existing customers offer the greatest potential for growth. Previously, answering such questions often required the collaborative effort of multiple departments – legal, sales, and finance – piecing together information from disparate systems. Now, a new layer of insight is accessible, transforming contracts from static records into a living knowledge base across the business.
Furthermore, contract intelligence can contribute to more accurate revenue forecasting by providing businesses with a clearer outlook on upcoming renewals, contracted revenue, anticipated pricing changes, and other commercial commitments. The contract evolves from being merely a record of a deal to an integral part of the intelligence informing future business strategies.
The core value of this approach lies in employing the right technology to surface critical information reliably, quickly, and efficiently. The real power comes from converting this knowledge and data into tangible actions, whether through flags, alerts, automated workflows, prompts, or initiating specific conversations. The more contextual information a contract intelligence tool is given – such as organisational playbooks, a history of approved positions, historical legal decisions, or existing contract libraries – the more effective and useful it becomes.
Mr Dunlop concluded that for many years, businesses have been overlooking a vast, largely untapped reservoir of organisational intelligence within their contracts. The means to effectively surface this information are now available. He posed the question: "how much intelligence is sitting on your contracts – and what could you do with it if you could actually see it?"
