Updated: Jan 20, 2021
I used to keep track of technology related to the contracts process, but now I do so only sporadically—there’s way too much for the casual observer to keep up with.
That’s even the case regarding a subset of that technology—products that aim to facilitate review of contracts. That’s of interest to me, as I’m chief content officer of LegalSifter, one of the companies in that business. At times it has seemed as if every couple of weeks I would hear of a new entrant in the field. I would pass the details on to Kevin Miller, our chief executive officer, but I wasn’t about to look more closely—I’m no technologist, and I had my hands full as it was.
But last December I listened to this LawNext interview of Dan Broderick, founder of BlackBoiler. At the same time, BlackBoiler announced it had been issued two additional patents for its artificial-intelligence-assisted contract-review software. (See this LawSites article.) And just a few weeks before, BlackBoiler had raised $3.2 million from a group of investors that included DocuSign. (See this Artificial Lawyer article.) DocuSign, the e-signature company, currently has a market capitalization of roughly $45 billion. And last fall it too entered the market for AI-powered contract review with DocuSign Analyzer. (See this Artificial Lawyer article.)
That might have had me quaking in my boots, but it didn’t.
Here’s what I learned about BlackBoiler from the Broderick interview: A client provides BlackBoiler with a corpus of its negotiated and signed high-volume contracts. BlackBoiler’s technology learns what’s in the corpus, so when the client sends BlackBoiler a new contract, in two minutes BlackBoiler marks up that contract to reflect the client’s preferred position. Broderick says BlackBoiler does 70% of the work in the first two rounds of negotiation; humans do the rest. He says BlackBoiler is responsible for 66% of the edits in the final version.
BlackBoiler’s key technology is its editing models. BlackBoiler can recognize, and adjust for, party names and defined terms, and it can handle pronouns and subject-verb agreement. It has also developed a Q&A component, so the client can specify the governing law, caps on liability, and other deal-term preferences and have that information built into the model.
All that is smart and impressive, but it’s very different from what we at LegalSifter do.
BlackBoiler applies client preferences, as reflected in past contracts and any Q&A component, to new drafts. So BlackBoiler is geared to big clients working with high-volume contracts. That leaves plenty of room for the rest of us.
Furthermore, BlackBoiler incorporates no expertise—it treats contracts as being amenable to a technology-only solution. That might be a suitable approach if the client knows exactly what’s going on in its corpus of contracts and in new drafts, but usually that’s not the case.
Traditional contract drafting relies on copy-and-pasting, on faith, from precedent contracts of questionable quality and relevance. And to justify choices made in that process, drafters rely on urban myths. As a result, traditional contract drafting is dysfunctional in what it says and how it says it. In my book A Manual of Style for Contract Drafting, I examine the building blocks of dysfunctional traditional prose and how to draft more clearly. Elsewhere I’ve explored contract provisions that don’t make sense. For example, see this article about the “successors and assigns” provision.
It’s likely that most BlackBoiler clients make choices in their contracts that are consistent with that dysfunction. BlackBoiler won’t fix that. Instead, it replicates the dysfunction.
By contrast, LegalSifter relies on expertise. We build “sifters”—algorithms that look for specific contract concepts—and bundle them in document types targeted at different transactions (leases, sponsored research agreements, services agreements, hotel agreements, and so on) and different users (buyers, sellers, landlords, tenants, and so on). The expertise comes into play in deciding what issues to look for, in determining how those issues are expressed in contracts (so we can instruct the technology accordingly), and in deciding what to tell users about those issues.
Because relying on expertise involves a leap of faith, we’re open about our expertise, to allow you to decide whether you wish to make that leap. For now, LegalSifter relies mostly on my expertise, but we also consult other experts, and we plan to expand our roster of experts. And we make public the analyses that underpin our sifters. See for example my four recent blog posts on jurisdiction provisions, the most recent of which is here. Those analyses are reflected in our family of “Jurisdiction” sifters.
The differences between BlackBoiler and LegalSifter don’t signify that one is better than the other. Instead, they’re different. If you’re asked to review more contracts than you can reasonably handle, or if the contracts you review are valuable enough that you want an extra set of eyes to look them over, then you should consider technology-assisted review. But whether BlackBoiler or LegalSifter is right for you depends on who you are and what your needs are. Do you have a large inventory of signed and negotiated contracts for a given kind of transaction and are you confident that you understand what’s in those contracts and the decisions they reflect? Then BlackBoiler might be for you. Otherwise, consider LegalSifter.