Could AI adoption help Legal win a seat on the board?

Although lawyers may not traditionally have been at the forefront of technology adoption, biting the bullet could help them play a more strategic enterprise role in future, attests Workday’s Jerry Ting.

Ting is Vice President of Agentic AI and AI-based contract lifecycle management platform Evisort, which Workday acquired in September 2024. He is also a trained lawyer, who estimates that less than 25% of organizations have any kind of centralized contact management system in place today – despite it being an apparently obvious area for automation. Ting explains:

The main reason [why adoption is low] is that there’s such a big surface area of contracts, which are hard to centralize as they’re across the whole company. It’s very different to sales, procurement, finance or HR functions, which each have their own dedicated systems. Contract lifecycle management is such a big opportunity that it’s hard to solve.

This situation is reflected in the firm’s new study entitled ‘The Contract Intelligence Index Report’. Based on input from 250 US-based, in-house lawyers and 1,000 employees, it revealed that contracts are currently scattered around everything from shared drives and email inboxes to CRM and ERP systems. The problem with this scenario, the report says, is that:

Siloed conversations lead to fragmented decisions and a lack of audit trails. These data silos do more than block visibility – they also prevent the cross-functional sharing of contract intelligence. Teams are unable to extract and correlate data from systems, preventing analysis and insights.

But the report points to the possible consequences of this scenario:

Missed revenue: Lack of contract insights into renewals, upsell and cross-sell opportunities hurts revenue growth

Customer churn: Unfulfilled contractual obligations strain relationships and erode trust

Renewal errors: Vendor contracts may auto-renew under unfavorable terms, adding unnecessary cost and margin pressure.

Inadequate contract management processes

A key reason why these data silos come about in the first place though, says the report, is due to a widespread lack of contract ownership and accountability at any level.

In fact, a huge 76% of the employees questioned do not think their teams have any idea of who owns or is responsible for contracts within their organization. Even in the case of lawyers, only 30% believe their teams are on top of the situation.

The upshot is holes in governance processes and procedures. For instance, while 85% of lawyers say they are involved in approving contracts, only two thirds of employees say the legal team is included. This situation creates potential organizational risks due to a lack of legal oversight and due diligence. The downside for lawyers, as the report points out, is that:

When risk surfaces, all eyes turn to Legal. Nearly two out of every three employee respondents (63%) expect Legal to be the de facto enforcer of contracts, regardless of whether it was involved in reviews or approvals…[But] Legal doesn’t know what it doesn’t know. How can a legal team manage risk and liability for an entire business if it is only included 67% of the time?

A key challenge for the department is that employees often see it as a bottleneck when trying to get things done. For instance, some 41% of respondents — including lawyers themselves! — believe contract-related processes are too slow. This suggests that a key reason why people often bypass the function during contract approvals and reviews is due to fear of delays and potentially missed deadlines.

The answer, of course, according to Ting, is for legal teams to introduce an AI-based contract lifecycle management platform, preferably his. He offers three examples of companies that have already gone down this route.

Financial services provider Western Union implemented Evisort to reduce expenditure by managing its global vendor contracts and leases more effectively. By doing so, it reduced its spend on external lawyers by 70% and processed 40% more contracts 65% more quickly.

Keller Williams, one of the largest real estate firms in the US, was keen to optimize its cash flow. It saved an unspecified amount of money by analyzing 10 years’ worth of vendor and supplier contracts and taking action around those subject to price rises or unwanted autorenewals.

A third was the company’s acquirer, Workday, which Ting says, “is how we met”. It again cut external contractors to reduce its legal expenditure and saw a return on investment of 3,500%.

The path to lawyers becoming more strategic

As to how all of this will enable in-house lawyers to adopt a more strategic role, that comes down to them being more actively involved in handling contracts for front-of-house teams. Ting explains:

Historically, Legal is a back-office function. Lawyers don’t create products or sell anything so we’re a support function, which is why we’ve been less strategic on the spectrum of being strategic. But by using AI in contract work, Legal steps forward to be part of sales, product, finance and procurement teams, and when you step into a more front-of-house role, you become more strategic. Many lawyers are also using AI tools to manage suppliers, so they’re no longer just in the back office but driving revenues and reducing cost. For example, 50% of companies say they’re losing money due to mismanagement of vendor contracts. That leads to things like autorenewal, which costs the business money.

Ting cites various former lawyers, such as Accenture CEO Julie Sweet, and Vice Chair and President of Microsoft Brad Smith, who now head up their companies. But he also anticipates seeing generally more lawyers on the board in future as AI continues to take hold:

AI is now a top priority of most organizations, and handling contracts is one of the most horizontal enterprise applications. But AI generates concerns, with accuracy being a big one, as well as security and responsible AI. When you have technology this disruptive, the legal person serves as the guardian of the company. You can compare it to when crypto came of age in 2021 and 2022. We also saw Legal become more important due to regulatory and compliance issues then too.

My take

While legal departments have not traditionally been known for the keenness to adopt new technology, Ting points out that many are now being “pushed’ down this route by senior executives whether they like it or not in order to get a handle on the company’s contract situation. As he says:

It’s a bit of volunteering and a bit of being told. But the smart ones are seeing it as a career opportunity as the truth of the matter is that AI will change the nature of work. So, the question lawyers have to ask themselves is ‘do you want to ride the wave or be hit by it?’