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AI-Enhanced Contract Review Is the Last Line of Defense


The value offered by contract review enhanced by artificial intelligence is simple enough: reviewing contracts is challenging, so there's a benefit to having someone look over your shoulder and offer advice, if you want it.

But to really appreciate what it offers, you have to understand the stuff you can expect to review. It's not pretty.

This week @lex_node --also known as Gabriel Shapiro--offered his take on the state of contracts in a Twitter-thread that starts with this tweet:


Read the whole thing. I'll wait.

Gabriel's assessment is accurate, whether you limit it to venture capital and M&A or apply it more broadly. The incentives are indeed perverse, with the result that contracts are stew of dysfunction in what you say and how you say it. I won't rehash that here. Instead, Gabriel's analysis caused me to ponder how one responds to the dysfunction.

You can say Enough is enough! and walk away. You can shrug and quietly keep on with business as usual--after all, for the bigger law firms, the copy-and-paste train is also the gravy train. Or you can keep on with business as usual because you have no other choice.

Or you can keep on fighting for clarity, and quality, and efficiency.

But it's a challenging fight. It forces you to create an alternative to the copy-and-paste world. That requires time, expertise, and resources that aren't in the reach of most of us.

But technology is an equalizer. In particular, AI-enhanced contract review can act as a last line of defense in addressing contract drafting's drastic garbage-in problem. But only if the AI is coupled with expertise. If you treat AI as just a function of recognizing patterns in the dysfunction, you'll replicate the dysfunction. (See this blog post for more on that.)

What's the benefit of tackling the dysfunction? Your contract reflects reality instead of the hall-of-mirrors version of reality offered by the copy-and-paste machine. That makes it more likely you'll close the deal. More likely that performance under the contract will go more smoothly and not hit a pothole. More likely you'll avoid ending up in court.

And more likely you'll get a better result if you do end up in court. I'd like to say that the prospect of using technology to give a boost to those reviewing contracts is what's keeping me in the fight, but fighting for clarity, and quality, and efficiency is all I know.

(The photo is of a famous last line of defense, the Roman fort in Portchester, England. Photo borrowed from English Heritage, here.)


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