Event Report: Smarter Documents 2 – the contract automation journey continues

Gerald Brent reports on a meeting of the SCL KM Group on 11 September 2018

Chairs:

Ruth Ward,  Head of Knowledge & Collaboration Technologies, Allen and Overy LLP

Shelagh Taylor, Knowledge Strategy Manager/Solicitor, Skadden, Arps, Slate, Meagher & Flom (UK) LLP

Speakers:

Andy Wishart, Global Head of Drafting and Automation, Thomson Reuters

David Howorth, Director/Co-Founder, Avvoka

Orlando Conetta, Head of SmartDelivery, Pinsent Masons LLP

Introduction

After introducing the speakers, Ruth began the discussion by way of reference to the first event on contract automation, which took place on 2016, remarking on the huge changes which had taken place in the field in such a short space of time.

In respect of the previous seminar, Shelagh outlined what was discussed, ie the evolution of document creation, stretching back to free-hand drafting, flat precedents and automated precedents, and ending in assisted drafting. Note was made of the simplicity of the concerns which document automators had at the time, eg keep it simple with a minimal amount of queries.

Examples were given of recent practical applications, such as Lexis Nexis’s judicial analytics and Allen and Overy’s Tech Innovation Space.

The future was boiled down to automation, collaboration and analytics. AI was also cited in 2016 and it was queried, by Shelagh, as to whether it would rear its head again this time as a theme. These were all themes which continued to be discussed in this latest seminar.

Andy Wishart

Andy discussed Thomson Reuter’s Contract Express product, as an end-to-end drafting solution. Its core competencies include empowering legal professionals to automate much of the drafting process, including signature and various data entry workflows. Available globally, it is integrated into the Practical Law product and so it benefits from working from a popular platform across the legal sector.

In respect of making the automated document process provided by Contract Express ‘smarter’, Andy discussed the prospect of blockchain technology and smart contracts in respect of the current Contract Express product.

Proof of existence was noted as the main possible application of the blockchain to Contract Express; although self-execution was also noted as possibly relevant for automated contracts. Here, each document is hashed with an ID, enabling the document to be tagged for future use cases but removing doubt as to the authenticity/origination of the document.

The value of this was noted in future use cases where trust issues may exist, and therefore where an ID-hashed document may go some way to breaking these trust issues down. The value of authenticated document (via an Integra ID) will then go on to have multiple applications: for example, in respect of a customised lease contract, efficiencies can be made by using an authenticated lease, with the blockchain trail standing behind which is then hashed/modified for the payment of rent etc. This can be achieved by integration with enterprise software, for example by the landlord/property manager logging rent payments and thereby updating a blockchain audit trail.

Therefore, the contract is smart insofar as anyone who has it will be able to verify, for example, certain computable actions, such as the payment of rent amounts or other conditions being satisfied, insofar as these may be logged as hashes on the blockchain. Thus payment events can be assigned with the contract itself as it sits within the Integra blockchain.

David Howorth

David began by noting the trends in contract automation, stressing the pace of change of document automation/execution compared to, for example, financial/payments technology - the legal industry has been slow to innovate.

Self-service, end-to-end platforms and data-driven contracting were then noted as specific trends in the industry, at the moment.

In respect of self-service, David noted the challenges presented to design of the technology. How do you let legal self-serve?

David, in outlining Avvoka’s document automation product, noted its end-to-end features include the ability to create templates which entail collaboration solutions, live negotiation solutions and CRM integration (so that contracts can be assembled straight from databases). E-sign was also cited as a benefit.

However, David noted that the “real benefit” to the mass uptake of use of software such as Avvoka’s was the incredible amount of data generated by its very use, in respect of values within and of the agreements but also negotiation data, eg “this clause has been negotiated so many times”.

The potential use of analysis of such data may improve the delivery of legal services immensely. David demonstrated his product with a video showing its use in respect of an NDA.

Orlando Cornetta

Pointing out the business case for what his talk would outline, Orlando first noted the extremely high costs faced by law firms/professionals in contract assembly/drafting documents in high volume and high complexity scenarios. Such high costs meant that investment could be made in respect of utilising object-oriented code to possibly automate the drafting process.

Orlando in essence gave a crash course/summary of the principles of good coding and how these are not so different from the principles of good drafting (of legal agreements) and that this similarity is something which can be taken advantage of, namely by object-oriented drafting practices.

Object-oriented programming involves you trying to classify the world around you, and therefore the principles which are at play include certain good coding principles which may also be understood as good drafting principles, including encapsulation, abstraction and polymorphism.

It is understood by the author that this merger of software engineering and contract drafting roles is something which is (at least at the moment) a cost centre for Pinsent Masons but which is presented to its clients, as and when the situation calls for it, as a solution to high complexity use-cases/opportunities for document automation.

The value lies in the question of whether you can make one ‘class’ (in the coding sense of the term) itself into a contract clause. For example, an IT Supply Contract Clause could itself sit at the top of a hierarchy of classes which involve standardisable classes such as change of control and jurisdiction clauses, and where such classes themselves sit (in the hierarchy) above, for example in respect of the change of control clause, a client’s termination instruction and/or supplier consent.  

Although displaying clear similarities with good drafting principles, as Orlando noted it is an ontological problem as to how these concepts are seen to relate, in respect of scenarios, norms and trends in the ever-complex real world.

However, the future may present increasing opportunities to utilise this knowledge, as general counsel may be able to standardise documentation for hundreds of products across, drafted automatically by T&Cs based on object-oriented code.

This behaviour-driven development of contract solutions was summarised by way of contrast to the alternative. The old contract amend workflow involving:

amend – error-check – email – check-in – contract/agree.

versus one which is automated, where the more efficient workflow is as follows:

amend – commit – build – text – reliance.

Q&A

Questions from those in attendance included:

  1. A question to Andy Wishart regarding the price of Contract Express, where the answer given was that it depends on the size of the firm/the nature of the firm.
  2. A question regarding the wholesale lack of standardisation across the legal industry despite there being opportunity to do so, where the answer given (from Orlando) was that, although it seems natural to standardise things, a complex world often does not allow for that (David and Andy were in agreement).
  3. Whether culture hang-ups in the legal industry are part of the reason why innovation does not come easily (asked after the event to Orlando and David), where the answer to this was yes and that although some law firms are better than others in respect of their attitude to new ideas there remains an industry-wide culture which is sceptical of wholesale changes in how to do things.

Gerald Brent is a Trainee Solicitor at Fladgate LLP


Published: 2018-09-19T11:00:00

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