Extracting key data elements from contracts is not an easy chore. Done manually, you would need to open each and every contract (which in itself is a time-consuming task), search through the full document for many different types of language, and copy and paste into a tool like Excel. Time studies have shown that in order to extract any given attribute, especially since most often, there will be agreements as well as associated companion documents, it takes about 2 minutes per attribute. If you extract, 30 meta data elements, it would take a half hour for each contract. If you have 10,000 contracts, it will take 5,000 person-hours. Then factor in quality control, checks, document organization, OCR software etc. and other processes that need to be in place pre-and post extraction. Totally, such an effort for 10,000 documents can take about 8,000 person hours.
Taking it further, and using 7 hours per day productivity time for a person, and allowing 19 days per month (exclude vacations and holidays), the effort for 10,000 documents comes to 1 year for 5 people! Ouch!
There are three ways to extract information from contracts.
- Fully manual process – the time frame of which I have outlined above. Cons: Tell 5 people to do an abstraction, and due to the complexity of legal language, you will get 5 different answers! Manual abstraction is very much prone to human errors.
- Fully automated – if you use extraction software, there is still a large amount of quality control that needs to be done because no software can decipher all the nuances of legal language. Not to mention, installation, configuration, training and maintenance of the software. And who will do the q/c? Most companies going this route find that the extraction is not as high a quality as they had hoped, and there is still a large manual level of work to be performed.
- Hybrid. Companies use software powered extraction, and take ownership of the human quality control to deliver complete, high quality data to their clients. It’s what we call “technology enabled service”. A single vendor delivering guaranteed results has the advantage of “one throat to choke”.
Consider the effort required to do the extraction before you embark on the journey.