‘The shared goals of lawyers and business are that contracts work legally and operationally‘ (Helena Haapio at World CC Summit 2023). Contracts should:
- make things happen
- prevent causes of unnecessary problems
- drive strategic business objectives and ESG goals.
The purpose of contracts
We need to make sure that contracts are legally and operationally functional.
But, as Helena said:
Contracts are just too complex – they may be lawyer-readable, but they are neither machine-readable nor easily human-readable. Most people dislike them (and the people who write them). Contracts are ‘written’ or ‘drafted’ not designed with users in mind. We need contracts that work for all readers…. contract’s don’t make things happen – people do.
Contracts are anot about the words, visuals, tables of information – they are about building or enhancing relationships.
This disconnect between the focus on words (lawyers) and use (clients) is echoed by Alex Hamilton of Radiant Law in his article on GenAI said We send out unreasonable and near-incomprehensible terms, spend our time arguing about the wrong issues, and then fail to manage the outcome. Most importantly, contracts are not valuable per se; value is created through the commercial relationship, and contracting practices undermine the very commercial relationships we are creating.
World CC research (2017 Report by IACCM on the Purpose of a Contract) backs this up. Contracts fail in several business-critical areas including: creating a framework for a mutually successful business outcome, supporting a business relationship and acting as an effective communication tool for those with a need to know.
The role of AI
We can use AI-powered tools (including GenAI) to implement proactive legal thinking which both promotes what is desirable and prevents what is not. AI tools can be used to revolutionize how we design, understand and communicate contracts. We can use these tools to:
- summarise and explain signed contracts
- check a contract against specific expert-driven standards (eg TermScout Screens)
- present it in new ways including creating layered content (see the design pattern library)
- suggest user-friendly skim-readable headings
- create navigation tools such as key data tables.
As Stefania Passera and Helena Haapio say: we need to focus on information architecture (how we structure the information in our contracts) before we focus on artificial intelligence – IA before AI.
Whether AI can properly draft simple effective contracts is still in doubt (as Alex Hamilton’s article makes clear)… and, until we have a more data-driven approach, contracts will continue to remain places where (in Alex’s words) information goes to die.
But in the meantime we can harness its incredible power to manage documents more efficiently. We can treat it like a digital co-worker.
What should you do?
AI is not really ready to replace humans. You can (and should) use it to do some legal processing (‘grunt’) work and learn from those experiences how to use it more successfully.
Once you have the AI-generated product, you need to rely on the deep expertise of legal experts, contract professionals and contract writers to improve, review, analyse and make decisions on what to do with that content.
We are not yet at the point when AI can think like a human but it can be a very effective co-worker.
