Technology start-ups targeting the legal profession continue to grow at speed. The global “legaltech” market was worth $31.6 billion last year, according to analysis from Fortune Business Insights, and could be worth $63.6 billion by 2032. However, in one area of the legaltech market where technology might be expected to have a huge impact, there is a growing sense of disillusionment.
Contract lifecycle management (CLM) software enables enterprise legal teams to automate and standardise at every stage of the contract process, from creating and reviewing new contracts to storing every single agreement the business enters into in a form that can be analysed for risk and enhanced performance. That sounds highly attractive – but research has warned that almost half of CLM implementations are falling short of expectations.
Those disappointments have seen other companies steer clear of CLM software. A recent survey from legaltech start-up Zuva found the majority of businesses are instead sticking with traditional document management systems, storing and managing contracts with tools such as SharePoint and Google Drive, or simply leaving them on local drives around the enterprise.
Min-Kyu Jung, co-founder and CEO of legaltech start-up Ivo, thinks this is a huge missed opportunity. Legal teams need tools that enable them to put the data in their contracts to work, he argues. If lawyers are able to easily search and compare all their contracts, they can, for example, identify standout risk exposures, easily create new contracts that align with the business’s policies and priorities, and negotiate from a better-informed position.
“Legal teams need intelligence at their fingertips that is contextual, instant and deeply reliable,” says Jung. “Every contract should be a strategic asset.”
Companies such as Ivo and Zuva think legaltech solutions built with generative artificial intelligence (GenAI) can resolve many of the problems that have dogged CLM software to data. Zuva’s research points out that existing CLM products struggle to extract information and insight from contracts, and to understand the relationships between documents and the obligations they contain.
Ivo’s Jung makes a similar point. It is this week launching two new GenAI-based tools – Repository and Assistant – which aim to address these issues. He describes the launches as part of “a growing shift in enterprise software from systems of record to systems of understanding”. Using GenAI, Ivo’s tools enable legal teams to set up dashboards of their contracts, recording key insights, and to conduct natural language searches of contracts to find particular terms or features in potentially hundreds of thousands of documents.
I first interviewed Ivo earlier this year, when the company unveiled a $16 million Series A funding round. Since then it has doubled its customer base, signing up around 100 legal teams – including the legal functions at prominent businesses including Lindt & Sprungli, Fonterra and Hootsuite – to its first product, a contract review tool. Jung hopes the launch of its new AI tools will accelerate its growth.