Automated contract review came up in a recent piece in The Wall Street Journal on "The Data Companies Wish They Had." In it, the Journal "asked companies what data they wish they had—and how they would use it." SeyfarthLean CEO Ken Grady had a clever idea regarding a future use for automated contract review:
Playing Better Defense
Historically, law firms that specialize in defense work, like Seyfarth Shaw LLC, are reactive: When clients are sued, they respond. But Ken Grady, CEO of the Chicago-based firm's consulting subsidiary SeyfarthLean, would like the ability to predict lawsuits—and prevent them.
How? By analyzing reams of contracts and looking for common traits and language that often lead to problems. For instance, he says, "do we find that a company's standard contract, with few modifications, seldom leads to a dispute, but those contracts which salespeople modify often lead to disputes?"
Comparing two contracts side by side is time consuming and expensive—let alone doing that for the thousands typically held by a large corporation. But software is evolving that could analyze, and make sense of, contracts with greater accuracy and at much lower cost, Mr. Grady says.
Companies have a lot of contracts; their details can be obscured by volume. It is terrific to be building technology that can help expose this potentially useful information, and we're excited to discover uses for it we can't even imagine yet. Have ideas? Please feel free to get in touch.