In this installment of Contract Heroes, we had the good fortune to be able to sit down for a chat with renowned AI expert, Jim Chiang. Jim is the founder of My Legal Einstein, an AI-powered contract acceleration platform. He has been submerged in the contract management space for some time, catering mostly to the AI side of CLM. He was the head AI engineer for major names in the CLM industry such as Apttus and Icertis and brings a wealth of both experience and knowledge to improving the way AI interacts with contracts. His goal and the goal of My Legal Einstein is to investigate how AI can transform the way people work in the contract space.
Our conversation with Jim touched on several aspects of the interaction between AI and contract management, exploring how the two can work together most effectively, the importance of honesty in technology, and the future of AI-based solutions as a whole in the world of contracts.
How AI Works with CLM
We kicked off our discussion by picking Jim’s brain about how he views the ever-expanding role of AI in CLM solutions. He explained that he started My Legal Einstein because he saw a lot of barriers in the CLM space. Whether it was lengthy implementation cycles or the failure of technology to scale up and meet the needs of an entire enterprise, many solutions were simply not living up to the standards he believed could be expected from technology by this point. After all, in the past 5 to 10 years, AI has grown incredibly quickly thanks to dedicated research. My Legal Einstein aims to push the envelope and continue expanding upon what’s possible when applying AI to contract management. And, in their pursuit, they have come to view AI not as an extra attorney who works on behalf of other lawyers, but instead as a means of augmenting people who review contracts and enabling them to do their work more efficiently.
There are various roles that an AI-driven solution can fill in a CLM environment. Jim outlined a few of those roles for us in detail: deep diving into contracts, comparing terms, global collaboration, and human fact checking.
Some organizations may find themselves working with extremely long contracts, upwards of 200 or 300 pages. Throughout the day, it can be difficult to set aside enough time, most likely at least 3 or 4 hours, to review a contract of that length in its entirety. It may have to be broken up over days, drastically slowing down the negotiation process and possibly sucking the momentum out of a deal. An AI-driven CLM augments an attorney’s ability to understand the contract in its full context while devoting attention mainly to the areas that need it, eliminating the need to pour over the sections that do not require amendments. In this way, lawyers can both save time and negotiate more effectively.
Another helpful tool that AI can offer is the ability to compare clauses between documents. For example, in a longer contract, your CLM may be able to pick out discrepancies that occur in the new contract compared to one that exists in the database or the playbook. Lawyers can then review the discrepancy and amend the language to avoid unnecessary risk or better fit the company’s standards.
As technology expands, so does our ability to communicate. And better communication means that business can be done on a much larger scale than ever before. Many organizations aim to reach a global market with their products or services, meaning that contracts need to be understood by multiple parties who speak different languages or adhere to the rules of different jurisdictions. Companies are often hindered when a contract is sent to them in a language they do not understand, being forced to seek outside counsel in order to be able to move forward with the negotiation. AI can solve this problem, as the algorithm can understand and process contracts in various languages, eliminating the need for outside assistance and speeding up contract execution.
Human Fact Checking
AI also adds an immense amount of value to contracts simply by double checking human work. Lawyers are extremely busy, so it’s normal for them to forget they needed to add a certain clause to a document. A solution powered by AI can catch these mistakes before they snowball and provide a little extra peace of mind for attorneys who will not have to spend hours rechecking documents themselves for minute errors.
The rapid expansion of AI and the hype surrounding it has led some software companies to be less than truthful when talking up the features that their algorithms can provide. Jim explained that the idea of gathering together a bunch of legacy contracts and sprinkling some magical AI dust on them to suddenly make your contract process effective is simply impossible. Providers might feel compelled to say anything to make a sale, but they fail to realize that educated buyers like attorneys who are trained in skepticism and risk avoidance will see through them immediately.
At My Legal Einstein, they aim to avoid making promises about future AI innovations, instead focusing on what the software can realistically accomplish right now. They allow anyone to sign up for a free trial and test the capabilities of the technology to see if it is a good fit for their needs. No smoke and mirrors or magical AI dust. Just the algorithms and tools as they are, accompanied by short training videos and experts educated in law who can testify about the worth of the product.
The Future of AI
Jim firmly believes that AI is the future of contract management. Its current capabilities have the power to help lawyers accomplish tasks quickly and effectively while also easing their workload. It even adds immense value to the company, enabling business to be done with more people across more countries and jurisdictions at a much faster rate than ever before.
The main bottleneck in AI at the moment is the hype surrounding it, which tends to generate falsehoods about what the technology can really accomplish. But companies like Koho are helping buyers better understand what technology is real and available right now as well as what problems they can feasibly solve with that technology. As buyers grow their understanding, a natural shakedown should occur in the market, leaving behind real technology like My Legal Einstein that is striving to make a difference in the contract management space.
For more exclusive chats with expert guests in the contract lifecycle management sphere along with valuable legal-tech advice, check out past installments of Contract Heroes and be sure to subscribe so you don’t miss an episode! If you have any questions for our guest, Jim Chiang, or you are interested in trying out My Legal Einstein for yourself, you can visit the website to register for a free trial.