Contract Risk Mitigation using Generative AI

Client Needs

• Managing intricate contracts with detailed requirements was a significant challenge.
• The volume and complexity of these contracts made them difficult to handle.
• There was a need for both accuracy and promptness in contract management.
• Risks with related to supply chain or labor issues needed to be identified and mitigated.
• Failure to address contingencies properly could lead to financial losses and project setbacks.

Solution

Challenge Identified

• Navigating the complexities of construction contracts, we sought an efficient, automated solution for detailed analysis.

Innovative Solution

• Leveraged open-source LLM models on Google Cloud Platform, ensuring data privacy and cost-effectiveness.

Swift Implementation

• Adopted the gpt4all ecosystem, streamlining the setup process and enabling rapid deployment.

Precision Prompting

• Crafted high-quality prompts tailored to construction contracts, enhancing the accuracy of model outputs.

Cloud Power

• Transitioned to a private cloud instance on GCP's Vertex AI Workbench, supercharging computational capabilities.

Seamless Integration

• Merged the LLM tool with existing systems, creating a unified, efficient workflow for contract analysis.

Continuous Refinement

• Actively gathered feedback, ensuring the model's ongoing improvement and relevance to evolving contract structures.

Outcome

• Achieved a groundbreaking, automated contract analysis system, drastically reducing manual effort and boosting analytical accuracy.

Results

Contractual Errors Detected

• Achieved a 95% accuracy rate in identifying potential errors or inconsistencies in contracts, reducing legal vulnerabilities.

Compliance Adherence

• Ensured 98% of contracts adhered to industry regulations and standards, minimizing potential legal disputes.

Productivity Enhancement:

• Contract Processing TimeReduced the average contract analysis time from 3 hours (manual) to 15 minutes (automated), a 90% decrease.
• Contract Volume HandledIncreased the number of contracts processed daily by 300%, from 10 contracts manually to 40 contracts with LLM.
• Response TimeDecreased client query response time related to contracts by 80%, enhancing client satisfaction.

Cost Avoidance:

• Legal Dispute SavingsAvoided potential legal disputes, saving an estimated $500,000 annually based on industry benchmarks.
• Operational EfficiencyReduced the need for manual contract reviewers, saving approximately $200,000 annually in labor costs.
• Training CostsLowered training expenses for contract analysis by 70% due to the intuitive nature of the LLM system.

Overall KPIs:

• Return on Investment (ROI)Achieved an ROI of 250% within the first year of implementation.
• Client SatisfactionRecorded a 20% increase in client satisfaction scores related to contract clarity and response times.
• Contract Renewal RateSaw a 15% increase in contract renewals, attributed to clearer contract terms and faster processing.

Client Profile

• National EPC company that specializes in engineering, construction, clean energy and manufacturing.
• Located in Wisconsin, with annual revenue of $800M and over 3000 employees.