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AI and the future of contracts
Niels Martin Brochner |
September 4, 2023 |

 13,333 total views

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There are decades where nothing happens. And there are weeks where decades happen. With the latest developments in generative AI, contract management is about to go through decades.

These new technologies have the potential to completely change the way contracts are created, reviewed and tracked. They can obscure processes and increase lawyer dependency—especially if most of the new products are built to serve legal professionals. Or they can empower the everyday person to better understand legal jargon and democratize our relationship with contracts.

People have been using contracts forever: engraved stone tablets, oral agreements, handshakes and parchment and paper documents—some of them written with paper and pen, others by typewriters. Finally, the computer came around with PDFs in 1992, MS Word, document drafters, e-signatures and the more modern formats that turn text into data.

Most of this process was driven by our wish to save time and space. We wanted contracts to take up less space so we could carry them around. And we wanted to spend less time dealing with them.

The space issue is fixed. Niels Martin Brochner, Founder and EX-CEO of Contractbook carries all of his contracts in his pocket. It’s also easy to see how the next era will accelerate the efficiency process. Most contracts follow a template, which means we can leave most of the creation and review to machines. We will probably keep a human in the loop but only to check off the work that machines have done. In other words, it looks like we’re about to significantly reduce the time spent on contracts.

That leaves us with a final issue that’s always been harder to solve: Making contract work fundamentally easier and more accessible.

When Niels went into contract management about seven years ago, he wanted to simplify the way we work with contracts. He was never legally trained. He ran a digital agency, and didn’t have a particular interest in contracts—which was exactly the point. Contracts intimidated him—they seemed inaccessible and stressed me out. They were a necessary evil in my life.

Anyone should feel empowered and comfortable working with contracts. It’s a question of fairness and transparency. Contracts are too important to be guarded by a narrow group of trained academics.

However, globalization and the digital revolution made the world more and more complex, which means that we’ve had to develop more complex legal systems to match it. That has resulted in a heavier compliance and legal burden on most companies. As a legal tech company, they were always playing catch-up with bureaucracy.

With AI, we all have received a powerful new tool. It can summarize complicated matters so more people understand what’s happening. It can guide us to make better decisions and suggest actions that enable us to reach desired outcomes. It can even perform tasks that protect us and ensure that we’re compliant by default. It’s not difficult for Niels to imagine a future of contracts in which contract management feels more approachable and is a less stressful experience. We just need to make sure that we keep it simple and utilize these technological advances to empower everyday people.

Too much technology has been overcomplicating the issues with feature-heavy products and bad UI in their eagerness to seem technologically advanced. AI companies prior to OpenAI had a tendency to make more-is-more tools with toolbars within toolbars containing niche functionalities that confuse more than they contribute.

And too many tech companies have catered toward legal professionals instead of serving legal consumers. Niels’s philosophy is that we need intuitive and user-friendly software that democratizes contracts and empowers anyone to feel like a legal professional.

Truly powerful technologies are simple. Your Gmail runs on AI—and you don’t notice it. It just works. So does your Netflix account. They are neither tech-centered nor built for experts. They are made in a way that empowers the everyday person without them even realizing it. Google didn’t become the hegemon of search engines because developers loved it but because it was the easiest and best solution for the average person. That should be our guiding principle as tech leaders.

Here lies the true frontier in the future of contracts: We must make sure that this new technological leap levels the playing field and simplifies legal work for those of us that haven’t passed a bar exam. We should make anyone feel like they’re in control of the contract and maybe even feel like a lawyer for a moment.

That’s Niels’s dream of a new inclusive contract sector. You may call it “AI inclusive.”

Author: Niels Martin Brochner

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