The legal profession is competitive. Law Firm Partners are under constant pressure to increase efficiency and reduce costs without any reduction in the quality of their work. An increasing demand for fixed cost legal services is also pushing increased financial risk onto law firms, an uncomfortable paradigm for many Law Firm Partners with some high-profile firm collapses in recent years, underscoring the financial risks.
Industry bodies (OSCRE, ISDA, World Commerce & Contracting (formerly the IACCM), CLLS among others) provide frameworks, assisting the relentless drive towards standardisation of contracts to reduce the scope for negotiation and transaction costs. Avoidance of unnecessary bespoking of agreements is to be welcomed. However, newer standards don’t impact historic contracts and member firms will almost always have their own ‘house’ position that best suits their specific business niche or clients, which inevitably continues to increase overall costs and financial risks. Law firms are serious about adding client value which in the context of industry standardisation, can often manifest itself in the unescapable urge to ‘fiddle’ with the drafting to make their version just that little bit more special. An ironic counter (revenue) productive twist in the context of relentless downward fee pressure!
How much variability actually exists?
Legal professionals often view their work as tailored to the client need. A one off pearl of wisdom, for the purposes of that transaction only. But how much variability really exists? Human nature and the arduous learning process necessary to become a legal professional dictate that we reuse prior structures, logic and language to increase our personal efficiency, and our marketability as a another string to the client pitching bow is added from the experience we absorb.
Contract Genetica (CG) has developed systems that can quantify this variability. Unlike traditional AI technology solutions, CG’s advanced algorithms automatically determine contract type from the content of the document, without any systems training. CG then aggregates content containing the same legal objective, without the need for any human tagging of clause types, significantly more accurately and scalable than any human classification. This powerful technology has enabled CG to determine that for many sectors, substantial contract commonality does exist, with many provisions having clearly preferred drafting even where pre-defined standards do not exist. In a sense, the dominant variation of a legal provision has often populated the legal market without the conscious intent of the draftsperson.
Augmented Legal Intelligence for contract review, drafting and negotiation
With verifiable clause commonality, contract review exercises can be based upon clause variants, not individual documents (as is the traditional review approach). CG’s solutions are augmenting all legal professionals driving:
Efficiency – Effort is based on the number of clause variants, not volume of documents for review
Standardisation – Commonality can be calculated. Continued variability is addressed with measurable focus
Deep Insight & Data Extraction – Analysis and data extraction becomes fully deterministic enabling, logic rules to be applied to a fully defined and complete data set, removing any guess work
Minimised Human Review – Repeatable logic is valid across all documents that contain a specific clause, any remaining review can be by exception
Drafting and negotiation are also enhanced through:
Convergence – The most frequent occurrence of a provision for a given contract type should naturally become the standard with deviations being due to new standards or reserved for the most complex transactions
Fallbacks – Alternative drafting can easily be identified from a delta view against current provisions
Quality – Semantically similar clauses can be identified, reusing the finessed final language from previous contracts, re-using that important human intelligence
Knowledge Sharing – Leveraging alternatives from others optimises a team’s aggregate capability
Through use of Contract Genetica’s technologies, CG’s clients augment the capability of their legal professionals to achieve more with less. The essence of the legal service, its expertise and experience are retained but at greatly reduced costs, maintaining the high-quality standards legal services consumers insist upon, by employing the power of augmented legal intelligence.
For more information please contact Contract Genetica or email email@example.com