Document comparison shows differences between one document and another (or others, in the case of multiple document comparison). This can otherwise be known as redlining and blacklining. Think track changes, but (potentially) in situations where track changes wouldn’t work, like where one or more documents are not a Word document (e.g., a PDF or image file), or where you need to compare multiple documents against one base document.
Document comparison is useful in multiple situations:
- Document comparison is an essential part of many contract negotiation workflows. It allows reviewers to see where changes to a draft have been made (e.g., by a teammate or the other side).
- It also can be useful in post-signature review processes (e.g., contract analysis, CLM, lease management, CRM or HCM input), to review how documents that are drafted off the same form differ from each other. This can save reviewer time and increase their accuracy, by enabling a reviewer to thoroughly review the form agreement, and then only look at deviations off the form in other documents (as opposed to having to read all from scratch, or just pick a few documents drafted off the same form, read those, and ideally have it come out okay).
- Agreements drafted off the same form (but with some deviations) are very common in office and retail leases (e.g., all the small leases for an office building or mall), employment agreements, licenses, and NDAs.
While there are multiple heavily-adopted document comparison tools, there are still opportunities for workflow software vendors to include document comparison features:
- By embedding this functionality into a broader workflow, they can save their customers from having to switch between different applications.
- They can offer new functionality not available in many current document comparison tools, such as:
- Multiple document comparison (comparing one document to many others, simultaneously (as opposed to having to run multiple comparisons)).
- Mixing together various Contracts AI and other features into a new workflow.
- E.g., use provision extraction to tell which parts of a contract have been modified, then use document comparison to show the actual changes, then show relevant playbook sections for the modified elements.
While simple document comparison is not itself especially tricky for a technologist to build themselves, it may still be worthwhile to consider licensing document comparison technology. An Embeddable Contracts AI vendor may be able to provide more polished or nuanced underlying document comparison tech, saving dev time and potentially increasing robustness. They may also make it easier to do neat stuff like multiple document comparison. You should evaluate for yourself whether licensing this from an Embeddable Contracts AI vendor is right for you.
Classification and extraction tasks can be completed one document at a time (with the processed document discarded after extraction). In contrast, to do a comparison, an Embeddable Contracts AI will need to have all the documents to be compared at the time of the comparison. This may mean more storage and the potential for slightly increased security risk (in that the documents are sitting around in the Contracts AI for longer). In practice, document comparison can typically be done pretty quickly, meaning that the practical disadvantages here are probably pretty minimal.
An Embeddable Contracts AI vendor may be able to supply the underlying tech to drive a document comparison feature. The real fun (and opportunity for differentiation) comes from building the UI around this. Since other vendors know their use cases better than we do, we look forward to seeing what people build on top of document comparison tech.
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