How Lawyers Can Best Work with AI in Contracts
On November 7, Luminance announced that one of its artificial intelligence (AI) modules negotiated an entire contract with another AI module for the first time without any human involvement.
Yes, you read that correctly: an entire contract was hammered out from inception to final approval without involving even a tenth of a billable hour. Humans only stepped in to sign and execute the contract, which several AI modules hashed out after learning negotiation and drafting practices.
While this successful dress rehearsal shows the promise and looming threat AI can have for attorneys, there are still too many risks associated with the technology that developers must sort out. If left to their own devices, AI-powered tools can arrive at solutions that are not based in fact, creating costly issues for negotiating parties. Flaws in the machine learning processes that train AI programs can also cause them to run ?off-script? in how they broker deals, hurting a company?s positions.
Therefore, don?t sweat. We?re not in Blade Runner territory just yet.
Legal teams must still rely on their internal talent and outside partners to steer AI through their contract discussions. They should leverage the technology?s best traits ? including pattern recognition, summarizations and clause playbook construction ? to safely and securely automate rote work. Simultaneously, lawyers should control for hallucinated results and mitigate any fallout.
Legal teams must still rely on their internal talent and outside partners to steer AI through their contract discussions. They should leverage the technology?s best traits ? including pattern recognition, summarizations and clause playbook construction ? to safely and securely automate rote work. Simultaneously, lawyers should control for hallucinated results and mitigate any fallout.
With that said, present-generation AI offers opportunities to improve how attorneys draft and negotiate agreements. Here is how generative AI, large language models (LLMs) and other AI programs can help lawyers simplify their contract work.
What artificial intelligence brings to the table
1. It can review contractual terms and generate easy-to-review rights summaries
Master Service Agreements (MSAs) can often run for hundreds of pages, replete with convoluted terms and surreptitious loopholes. Non-disclosure agreements can also feature vague wording around whether information is ?confidential? and how parties should treat it. Trained AI modules can crawl through voluminous documents to flag essential language and ferret out unfavorable conditions that should be renegotiated to reduce compliance risks. These tools can also leverage LLMs to strip the legalese from copious contracts, distilling them into scannable rights summaries for in-house counsel to vet and pass along to corporate leaders.
2. It can organize clause libraries, negotiation playbooks and fallback clauses for negotiation teams to rely on
Most standardized contracts contain similar structures, clauses and terminologies ? as well as flourishes and preferred language unique to each company. AI?s pattern recognition capabilities could detect clause variances and unfavorable terms. Modules can even organize ?libraries? of an organization?s preferred clauses, ranging from readymade forum selection and arbitration provisions to non-compete parameters. Therefore, when an organization negotiates its working agreements, counsel can ask AI to proffer preferential language during the first rounds of review before sharing middle-ground clause options. Doing so can facilitate speedy negotiations and limit an in-house lawyer?s involvement to necessary discussions.
3. It can sync information with CLM systems, enterprise software, legislative databases and more to create alerts and uncover cost- and risk-saving opportunities
Companies can also sync their AI programs with contract lifecycle management, billing programs and matter management software (we?re looking at you,