Automating Legal Contracts

gkostadi

Opportunity:

LawGeex is a software-based Israeli start up founded in 2014 that uses artificial intelligence software technology to automate and increase the speed and accuracy of contract review for businesses. LawGeex has built a powerful AI neural network through training their software with thousands of legal documents. As the legal needs for firms increases in size and scope, companies find themselves needing to review complex legal documents frequently for everything from NDAs to purchase agreements, the time and money spent to review these documents is rapidly increasing.

LawGeex does not seek to replace lawyers nor is it a comprehensive legal solution, but it bills itself as automating the approval of mundane, routine legal documents.  The idea is to free up time for employees to work on more creative tasks and to also save on legal fees when lawyers are involved. Additionally, it seeks to find troublesome clauses or verbiage in the contract that humans might miss which could also be costly to the firm. In essence, they seek to answer the question “Can I sign this?”. With a market opportunity that expands to nearly every business worldwide, LawGeex demonstrates a powerful and scalable platform.

Solution :

LawGeex uses Artificial Intelligence to improve and speed up the legal and contract-building/editing process. The technology they use analyzes incoming contracts and suggests edits based on the company’s policies and business requirements. A business can set boundaries on legal clauses it will accept or deny, and LawGeex’s AI software learns to efficiently approve or suggest edits to contracts. If edits need to be made, LawGeex’s platform allows customers to edit contracts quickly and consistently on the platform. Overall, the company looks to speed up and simplify the legal review and approval process (making it under 60 minutes) while remaining safe and secure.

Effectiveness, Commercial Promise, and Competition:

LawGeex offers easy to use, cloud based platform that can start using without installation or internal IT support needed. LawGeex has customers in over 15 countries, including eBay, Deloitte, and major banks and insurance companies. LawGeex technology completes the review and approval process of simple legal documents for businesses in less than 60 minutes. For the average customer this presents 80% time saving. In a supervised study, the AI product and 20 experienced layers reviewed five non-disclosure agreements. The lawyers were did the task accurately in 85% of the time, while the AI was correct 94% of the time and did the task approximately 200 times faster.

Legal services are costly for companies but necessary for running a business. Automating them presents a big commercial promise for the technology. According to studies, ineffective control and management of supplier contracts costs businesses $153 billion a year in terms of missed savings opportunities and increased risk. LawGeex’ service is attractive for customers because it decreases legal costs by speeding up the contract approval process. It can also appeal to legal advisers by automating repetitive tasks and leaving them more time to focus on the more interesting aspects of their work. In addition, LawGeex allows customers to specify company language and required clauses and alerts the users when those are missing. This can benefit small businesses that may lack the time and expertise to monitor the process. New legal hires can also be trained faster using LawGeex interface.

Several competitors include Agrello, Thought River, Legal Robot, and platforms such as OpenLaw which is a US and Swiss collaboration on Ethereum.

Suggestions / Improvements:

First and foremost, LawGeex should continue to refine its algorithms as it gets more and more data in order to improve accuracy. LawGeex currently focuses on “everyday and in the way” contracts such as NDAs, service agreements, and other low risk contracts. As a next step, LawGeex should also look to expand into more complex contracts and legal documents. Further, LawGeex should continue to expand its customer base and potentially develop industry expertise by evaluating contracts versus a company’s standard language/ fallback positions as well as industry benchmarks. That said, this may run into privacy concerns (i.e., aggregating data across many companies). Another area for improvement is to make LawGeex personalized for each user. Even within companies, lawyers operate differently – some lawyers will want to dig into and examine certain areas more than others. As such, LawGeex could learn for each individual user and flag items of particular importance for that user (as opposed to just for the company). Lastly, LawGeex primarily focuses on businesses. LawGeex could try marketing themselves to law firms – this will be an uphill battle as LawGeex will take away billable hours and disrupt the industry, but some law firms may see the value.

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