Generative AI for Legal Contracts
All eyes are turning toward artificial intelligence (AI), with companies bringing on board more AI technology and investors doubling down on generative AI. OpenAI, the company behind Chat GPT, for example, would be valued at a whopping $29B with Microsoft’s potential $10B investment in the company.
Microsoft Ventures has already invested in generative AI for legal applications through Evisort, an AI-powered contract intelligence company. In December 2022, Evisort announced its AI Labs had trained generative AI that can draft and redline contracts, based on the preferred language and existing contracts that are unique to each organization.
“Today’s legal, finance, procurement, sales, and operations departments must have access to the critical data within their company’s contracts, and this can only be done at scale with AI,” said Jerry Ting, Co-Founder and CEO of Evisort. “AI-enabled technology helps business leaders realize the value of negotiated contracts by connecting contract data across the organization.”
In many leading companies, legal professionals today are utilizing AI trained on nuanced legal language to analyze and auto-extract key data points from their contracts. With highly accurate OCR and AI, these teams can analyze tens of thousands of documents a day. Lawyers and business leaders can then search all contracts at a company for a key phrase as easily as searching on Google, instead of combing through emails, spreadsheets, and document folders to find critical information.
Adopting an AI-powered “search engine for contracts” creates enormous efficiencies, but layering AI-guided contract workflows and contract-specific generative AI on top of this capability unlocks even greater potential. What is most groundbreaking is that today it is possible to train this type of generative AI first on the nuances of legal language, then on a company’s executed contracts and existing documents, and finally on the company’s pre-approved preferences for optimal and fallback language for future agreements. In short, business leaders can now leverage generative AI that is specifically tailored to protect and accelerate their unique business.
“With AI that can intelligently draft a new contract and redline a third-party contract, lawyers are freed to focus on higher impact tasks that require the true strategic thinking and industry experience only a human can provide,” said Ting. “Ultimately, the goal of this AI is not to replicate or replace the role of a lawyer, it’s to give a lawyer a technology-powered head start to do their job better and more efficiently.”
AI-powered contract technology should also help democratize the valuable data held within contracts appropriately and securely across the organization so business leaders can hold a more informed conversation and make better, faster decisions. “One of our customers is a large technology corporation that uses Evisort to extract contract data and populate adjacent systems including their accounting processes for SOX compliance and reporting. Using Evisort, they’ve reduced reporting time from weeks to days on a quarterly basis by having that contract data at their fingertips,” said Ting. “In another example, a leading global technology company has leveraged Evisort to conduct M&A due diligence, and they have reduced outside counsel costs substantially while bringing the M&A process expected to take 24 months down to roughly 9 months.”
At the end of the day, AI is here to stay and the reality is that businesses that resist this transition will be hard-pressed to stay ahead of their competition, especially in a challenging economy. As AI becomes more widely adopted, it’s highly likely it will become as ubiquitous as electricity or internet access. Until then, the early bird corners the worm market.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.