Lawyers have a reputation for being slow to take to technology. This reluctance can be attributed to legal technology’s failure to live up to its claims for over two decades. However, things are now changing, and while some skeptics believe that complete automation of contract creation is still a pipe-dream, others believe it is attainable.
In the past, drafting solutions were tailored around generating contracts using a questionnaire. While these solutions were suited to routine work, they fared poorly when faced with more complex contracts. However, with the adoption of Machine Learning techniques in legal Artificial Intelligence, the automation landscape in legal technology has changed considerably.
Machine Learning in contract drafting works by training algorithms on thousands of contracts from large databases (for instance, EDGAR which is maintained by the Securities and Exchange Commission (“SEC”). A set of algorithms rank the contracts from standard to non-standard based on how frequently the language is used in other contracts. The most standard contract contains the least amount of deal-specific, non-standard language. When no standard contracts are available, the algorithm stitches together an estimated standard contract using standard clauses from various contracts.
Machine Learning-enabled contract creation solutions open up a whole host of benefits for its users. They are low-cost and create great value for the clients in a fraction of the time. Though this may make billing by the hour redundant, law-firms will be able to increase their bandwidth and do much more value-added work. With the advancement of data science, it may even be possible to keep track of the performance of contracts in the market and use that data to further inform the most optimal terms to include when drafting contracts.
These developments have translated into legal technology being received increasingly positively by legal teams across industries. The last decade has seen many big law firms, and even accounting firms, embrace legal technology globally. The legal industry is being disrupted and if failure to adapt to technological disruptions may mean losing out to those who do.
SpotDraft enables abstraction, review and deviation analysis, and answers questions on LOIs and other transactional agreements in a few seconds per contract using Artificial Intelligence. You can explore our features at Spotdraft.com