Christophe Frèrebeau, CEO and co-founder of Della, discusses the evolution of AI in law.
AI-driven contract lifecycle management and analysis technology has been receiving lots of attention in the law firm and enterprise space recently. With Ironclad recently valued at $1 billion, Evisort raising $35 Million in Series B funding and Agiloft raising £45 Million. Not to mention Docusign’s acquisition of Seal Software for $188 million last year. So, it’s unsurprising that the spotlight is fixed firmly on this space. With adoption, market consolidation and sales also increasing, it is clear that contract analysis is now seen as an investment with huge potential for both buyers and investors.
What is also clear is that the spike in interest, adoption, and investment comes from a universal need across the business world to boost productivity. Increased client pressures, the volume of work and, of course, Covid-19 have all accelerated digital adoption and the need to drive efficiencies in the way organisations are run. However, despite recent interest, contract analysis tools are not exactly new kids on the block, and as a nascent technology, there is still plenty of room for AI-driven contract lifecycle management and analysis technology to evolve to meet the ongoing needs of end-users, whether they are in law firms or corporate legal departments.
Contracts define who does what, at a defined price or prices, over a specified time. Contracts also determine who is responsible when things go wrong, whether in a transaction or in an overall relationship. Businesses have run on contracts for centuries. As a result, early attempts at using AI in law have focused on managing, or should I say ‘detecting’ clauses in contracts. I like to imagine this as AI being used like a yellow highlighter going through your contracts and flagging the bits that require your attention. There is no question that this was, and still is a very significant step in the digitisation of the legal sector, enabling technology to take some of the burden from lawyers.
The crucial point is that this type of contract analysis technology isn’t true AI. A lawyer still has to manually review a clause and spend time finding the answer to their specific question. If we want to use AI to its full potential in this process, we need a tool that does more than just ‘highlights’ the clause that you need to review, but actually finds the answers to your questions, thereby providing you with actionable information quickly.
Current tech solutions are oversimplifying legal work
From a law firm standpoint, the new direction is clear: the client must come first. If not they will go elsewhere. From a technology standpoint, perhaps less so. Many solutions in the contract review market struggle to balance putting the client first and providing a solution that can service large numbers of customers with different needs. In an attempt to put their clients first, many in the contract analysis technology market train individual AI models for specific tasks. This training requires large amounts of niche legal data and human supervision to get the model up to speed. It is expensive and difficult to maintain. As a result, many legal tech vendors are oversimplifying a contract’s role, by defining it as a single document containing a set of clauses. In short, they are standardising legal processes to fit their “one size fits all” solution.
Some vendors have started to notice these limitations and are building capabilities within their solutions to overcome them. For example, adding custom fields and tracking user-generated data points. However, despite them adapting to meet the needs of their clients, these “bolt on” capabilities often lead to increased complexity. So, rather than trying to get your contracts to fit the narrow criteria of your legal technology, wouldn’t it be better if your contract analysis technology was flexible enough to provide the information your users actually need from any given contract? Rather than basing it on assumptions of what they might need on an oversimplified version of a contract.
The next step in contract analysis must be to help lawyers on both sides of the table to drive efficiencies in their contract management lifecycle. Moving from a traditional process, which requires a great deal of manual oversight, to true AI, which removes the burden of oversight and manual review from lawyers, while allowing them to remain in control. Contract analysis should not oversimplify legal processes. It should allow users to customise their tools to their specific needs and, crucially, it should be easy to use.
Ultimately, the goal of AI is to assist us, by making cumbersome tasks as painless as possible.
Della’s platform launched in January (2020), but it is already being used by small and large law firms across multiple countries and several large multinational corporations. Those law firm partners range in size, from top UK and European law firms, to smaller boutique providers and enterprise organisations. Della’s customers include: Eversheds Sutherland, Fidal, BCLP, Wolters Kluwer, and Content Square (USA). The smallest law firm currently using Della has 12 lawyers. Last year, Della launched a partnership with Wolters Kluwer to provide Della to their contract management platform customers.