Agentic AI + Contract Lifecycle Management: A New Balance
Discover how Agentic AI can enhance contract management while maintaining the critical role of human expertise in complex negotiations.
Agentic AI is reshaping the landscape of Contract Lifecycle Management (CLM) by introducing a more dynamic and proactive approach to handling contracts. Early AI systems were initially met with skepticism due to their limitations in understanding and processing complex legal language.
However, Agentic AI marks a significant shift, offering advanced capabilities that can anticipate needs, initiate actions, and provide contract redlines and approval routing based on codified pathways and logic.
Despite these advancements, Large Language Models (LLMs) still struggle with long contracts, causing a 10-20 percent drop in accuracy for prompts over 1,000 characters. This poses risks when AI negotiates and executes agreements on its own, stressing the need for human oversight to reduce risk and provide strategic judgment.
The integration of Agentic AI with CLM should balance AI efficiency with human expertise. While these agents can handle routine tasks and support drafting and risk analysis, they cannot yet replace human judgment in high-stakes negotiations or data-driven discussions.
To ensure its successful implementation, KPMG recommends building well-designed escalation pathways that allow for seamless human intervention when necessary.
For a deeper dive into how Agentic AI can enhance your CLM processes, download our white paper today.
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