Contracts and contracting are the natural place to use GenAI. But few are really using it there.  Why?

My children are now British. It happened. Although we still talk about my beloved/hated NY Jets, we now end up discussing much more about F1 racing and Cole Palmer’s usage in the Premier League vs. how he was used in the Euros. It’s all great, but as someone who grew up fighting about the relative merits of Yankees vs Red Sox, this counts as a “change event.” I bring this up, as I have learned an incredible amount (baseline was zero) about F1 racing and cars these last few months. For those unfamiliar, the cockpit of one of these things looks like the Millenium Falcon, they go 0 to 100 mph in the time it took you to read those words, and the drivers can survive (thankfully) almost any crash conceivable. As my gang had a bunch of their friends over to watch a race and discuss the nuances between this crew and that crew and DRS (drag reduction system), I asked the dumb middle-aged Dad question, “these are cool, but if I gave you one, what would you actually do with it?” And yes – I fully get the “it would just be cool to have one” aspects of it, but my overly practical GenX mind couldn’t help but go into questions like, “let’s say you actually took it to the mall, how would you lock it?” or “what if I have to the take the dog to the vet and this is my only car?”

Anyway – I bring this up because it reminded me of the dialogue around GenAI and contracts. This isn’t to say that GenAI is impractical or useless when it comes to contracts, contract management, etc. Au contraire, I think it’s incredibly useful – in fact contracts is where it is probably most useful in a lot of ways. But – despite that and despite vendors giving away free POCs (proof of concepts) like samples at the deli, not much is really happening yet – especially at any scale. So many companies are flirting with GenAI and collecting these pilots or POCs like 1990s gym equipment. And yet like said equipment, they are letting them sit – unused except as drying racks – in their proverbial basement or garage. Why? There are a multitude of reasons of course.  And now is the incredibly artful segue for me to give you a list of my thoughts on this.

Wrong expectations

Here is my F1 analogy (thanks for staying with me). There is some fear, compulsion or other force of nature that forces us humans to want the “best” or latest, even though the pretty useful is more than just fine. Do you really need the latest smart phone with a camera that would make Ansel Adams or Annie Leibovitz jealous just to take pictures of your kid’s reception play or the two ducks you saw on a pond? No – but we all do it and compare pixel ratios like we worked at an animation studio. F1 cars are cool and amazing feats of engineering, but absolutely 100% useless if you need to pick up groceries or drop kids off at [insert sports reference to your country]. We understand this in real life, but why are people challenging companies that have only existed for maybe 24 months or which adopted GenAI (looking at you CLM tools) in the last 12 months to have not only the greatest tool now, but forever? Most companies (still) don’t know where all their contracts are or can quickly extract the information needed when regulation X becomes popular on the blogosphere or the next global “event” occurs. There are still many who for them “AI” is “Control F”.

Let’s get real with GenAI. Imagine you could find documents more quickly, search the contents more easily or even create a first draft in seconds as opposed to waiting for Tom in procurement (sorry to pick on any Toms out there) to find the right template, draft “something” and give it to you on a portal that only works if your VPN is stable? I use hyperbole for effect, but there are a lot of simple tasks that GenAI can do which can give you and your org time back. These are not amazing. These are not translating Arabic into Dutch while explaining the risk elements of contract X. These are nuts and bolts activities that many contracting or contracting professionals waste hours, if not days (in the aggregate) on in pursuit of just getting the deal closed. As the World Commerce & Contracting has noted on a percentage level and some wise person (maybe the ancient Greeks?) once said, “contracts are touched by everyone, but owned by no one”. If you could get back some time across the swarth of people involved in contracts – wouldn’t that be enough? Similar to my stance on “what is the best CLM”, the best GenAI is the one you actually use.

Vendors simultaneously overselling and undervaluing 

With all love, respect, and admiration for those who have to sell something new, I implore you – stop it. You did a fantastic job getting the attention this needs and deserves, but it is now counterproductive. Whenever I read that law firm X is announcing that is it is using tool Y, I always wonder – “for what?”, “with who?”, and “how often?”. Press releases are just that – good for the press. I am not knocking anyone for this, but can we focus on real outcomes for clients? I have no doubt that any GenAI tool out there (remember – I am tool agnostic, but too opinionated) can do the basic stuff well. Search, summarise, working within a rule book – these are all table stakes in my opinion.  

Maybe we should be showing more of that off as opposed to trying to generate a Global Services Agreement from scratch, translate from Arabic to Chinese, or some other use case that most companies don’t need, really won’t use and will just scare people. Maybe also focusing on how easy it is to get the tool connected to a CRM, CLM or ERP tool that is already in use – as opposed to questioning the need for one of those key systems. I mean – databases are still useful.  Where is the GenAI going to read from anyway?

Logistics

There are a few things at play here and I lump them all into “logistics”. But really there are a number of own goals here around how to get a deal done. I will start with the most obvious – money. Whether you use Miller Heiman, SPIN, SNAP or you are selling used cars, its important to get to the person who controls the money. Not to be controversial, but legal budgets are tight, conferences are plentiful, and POCs are way too free. Add that up and I observe a lot of very genuinely interested people in companies – without remit or budget – being targeted for free POCs that could go amazingly well but are ultimately doomed to end. The excitement and interest are all there – but the C-Suite cheque book is not. This happens with pretty much all “legaltech” – a word I detest – and now its happening with GenAI. Doubt me? Spend management tools have been around for 15 years, but many, if not all legal departments are still using some fancy tool they call “XL”. It’s the green icon. I am sure you have seen it.

Another issue – and I give credit to my team on this for calling it out all the time – is just getting a new tool on the estate. Often times the GenAI tool vendor hasn’t fully realised the challenges of trying to do something with a bank or with a particular part of the world, where data and where it is kept or how it is accessed is more complicated than you think. IT organisations in the financial sector are in a secret competition about how difficult it is to land a tool into their ecosystem – often delaying any deployment by six months or more. Also interesting is the Middle East, where some countries don’t want data leaving their shores. These can be complicating factors for a two-year-old company without the robust security frameworks needed. Now the natural workaround here is that you provide the GenAI as part of a service with a reputable, large organisation that already provides and this is merely a tool they utilise. But that’s a different blog.   

The point here with these two examples, is that although the use-case may be clear, the forces of the corporate world are still a challenge – whether in paying for the actual tool or even using it.  

In conclusion I think a number of things, but to boil it down, I think: (1) let’s focus on what we want to do and the business impact; (2) let’s not get distracted by what could be, and maybe just focus on what is and what helps now; and (3) maybe try and sell to those with money and way to actually use the tool you are selling. Seems simple right? I believe in us.  It’s not like we’re talking about blockchain or something like that.  This one is real.  

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