NetApp, like many companies, faced difficulty getting insights from its contracts quickly and efficiently. When projects arose, out of necessity they were outsourced to legal service providers, using manual solutions and processes that inhibited the team’s ability to explore contract data as business needs demanded. The team might start with a particular objective in mind, but along the path to defining a solution, new information would inevitably divert the initial desired outcome in a new, more complex direction, requiring the team to tweak processes continually to achieve the desired outcome. Any time new information came to light during an extensive review, the team was back to square one.
The COVID catalyst.
COVID-19 presented NetApp Legal with a unique need to successfully leverage AI to address sudden supply chain disruptions. COVID-19 challenged NetApp with supply bottlenecks; as a result, the organization needed to understand which customers would accept partial shipments and what recourse it had with key suppliers across the globe. From a contract management perspective, agreements had not been tagged for “partial delivery” key terms. NetApp had tens of thousands of contracts to review in order to address a whole host of new contingencies. Failure could result in litigation, customer dissatisfaction, and worst of all, impacts to revenue.
Prior to the pandemic, nobody ever dreamed we, as an industry, would be reviewing force majeure clauses en masse for nearly all of our supplier agreements with the need for near-real-time results.
VP Law, Technology, and Operations
Turning Legal into a revenue generator.
Using AI-driven text mining from Evisort (now a Workday company) to perform a “Google-like” search across all contracts, NetApp was able to quickly locate specific provisions that enabled the company to invoice for partial shipments while maintaining customer satisfaction. The Workday platform allowed NetApp’s legal team to train its AI tool within a week and run a search on partial shipments across the entire contract repository—cutting 24,000 contracts down to 600, with 90 different variations of partial shipment provisions in a matter of days.
“During the partial shipments search, we thought we were looking for specific sets of terms—but we found that some customers articulated this issue in a different way than we expected,” said the VP Law, Technology, and Operations. “AI enabled us to zero in on relevant language and key provisions buried in unexpected places in dense legal agreements.” By coupling expiration dates with partial-shipment language, the cross-functional team was also able to filter for contracts coming up for renewal within 90 days—and prioritize agreements with less-favorable terms for renegotiation.
Igniting a mindset shift.
With any kind of technology, change management is the most difficult component. However, having the ability to query any conceivable provision—without needing to marshal funds or manpower—is accelerating change management. As the VP Law, Technology and Operations explained, “It’s so intuitive, the mindset shift happens painlessly and exponentially faster.” Since COVID, NetApp has analyzed over 90,000 agreements tackling several projects including corporate entity changes, post-M&A activity, and data privacy analysis. NetApp has leveraged cutting-edge contract extraction AI and automated workflow technology to save thousands of hours and millions of dollars across multiple critical corporate initiatives.
Once you taste this AI contract search capability, you become addicted—and you start to identify use cases all over the place.
VP Law, Technology, and Operations