Contract AI, The Game Changer for Corporate Paralegals

Episode Notes

Transcript

[Music]

Hello everyone. Welcome to the Paralegal Voice here on Legal Talk Network.  I’m Carl Morrison, an accredited legal operations professional and advanced certified paralegal and your host to the Paralegal Voice.  So, if you can believe it guys, we’re halfway through 2022.  I don’t know where the year has gone.  I don’t know about you, but the rest of my year is going to be crazy.  So I’m going to be traversing the country.  I’ve got several conferences that I’m presenting at and couple of webinars I’m doing.  So, needless to say, my next six months are going to be crazy.  And speaking of conferences, I just returned from NALA’s 2022 conference in Phoenix, Arizona at the JW Marriott which was phenomenal.  The conference was great and it was so great to get back to in-person conferences.  While this wasn’t my first in-person, it was really now as first in-person since the pandemic and it was so great to see everybody in person again and really the highlight of my conference attending there at NALA was getting to see someone who I have collaborated with in the past and he’s a Harvard Law School graduate.  He’s a legal tech innovator.  He’s an amazing guy and he is our guest for today’s Paralegal Voice, Memme Onwudiwe with Evisort.  Welcome to the show Memme.

Memme Onwudiwe: Thanks so much for having me Carl.  It’s a pleasure and yeah, it was great hanging out in Phoenix.  I’m excited to chat today.

Carl Morrison: It was hot, right?

Memme Onwudiwe: Yes.

Carl Morrison: So, Memme was a speaker at the NALA Conference and he presented on a couple of different topics, one of which was entitled corporate paralegals in the age of contract AI, which stands for artificial intelligence if no one knows that, but the other was space law which was really fascinating and that can be another show Memme.  We need to do that one.  So, if you’ve attended in-person, you did it virtually or you’re watching the recording, really today’s Paralegal Voice podcast is for you and so what I would love to chat with you about today Memme is your session geared for corporate paralegals, and one of the things that you mentioned in that particular session was that AI adoption — you know as AI adoption increases really, corporate paralegals are going to move from generating contracts to validating and managing contract data, which I loved when you said that because it got me to thinking and what I was thinking at first like you know at face value, this seems like a situation where probably corporate paralegals in the audience were going, “I’m going to lose myjob”, you know, they’re fearing for their jobs.  But we know, you and I know Memme that’s not the case.  So, I want you to talk to the listeners that’s listening to this episode, you know, how AI is going to assist paralegals especially corporate, paralegals with validating and managing contract data.  We’re kind of focusing on contract data.

Memme Onwudiwe: Yeah. That’s an excellent question Carl.  I think the way that I would think about it is, you know, as you stated right now how can we be engaged in contracts? You know, a lot from a contract data perspective, it is the generation of that contract data, right?  and folksn might be thinking what am I generating contract data, right?  You kow maybe when you’re entering information into a CLM, maybe when you’re keeping track of dates, you know, in an Excel sheet but even when you go and you name a document, you know, ACME, Disney, NDA 2010, like the reason that you’re naming it in that way is so you can quickly go back in the future and just by looking at the file name know what’s inside the contract, right?  And so that in itself is kind of a way of keeping track of contract data, right?  And so when you think about it from that facet when there are this fire drills and issues that arise, right, they might be kind of, you know, GDPR changes, right?  You know, they could be COVID leading to find the force majeure, right?  Or even you know sanctions against certain countries, we need to find way to rid exposure in our contracts, right?  You know, those might manifest as different used cases and issues, but the core issue is that, you know, you don’t have visibility into your legal and business obligations that you’ve agreed to in contracts.  You need to quickly find out what your legal obligations are in your contracts, right? And so a lot of times folks are tasked with going through those contracts and looking for that language in generating, that data and that’s a very reactive stance, right?

And so what we’re saying is as more folks adopt artificial intelligence that actually be structuring the data in these contracts passively.  So as you’re storing 10,000 documents, you’ll have visibility in the 60 plus data points into those documents.  You won’t have to do those kinds of fire drills anymore because you’ll have that visibility into your contract you won’t be choosing 10 out of 80 things in your contracts to track.

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So that anytime you need to know something outside of the 10 data points you’ve chosen the track it’s a fire drill, instead you’ll have that data, right?  And so when a world where you have that data that allows paralegals to free themselves from generating that data but instead look at these opportunities to optimize things within their contracts, right?  You know looking for inconsistencies, looking for early payment discounts or late payment termination penalties that you can seize on to save funds, you take that stance once a paralegal is armed with contract data instead of tasked with generating it.

Carl Morrison: That’s perfect.  And you know, in your session at the conference, you talked about knowing when to use AI.  So what is our ultimate goal when using AI?  Is it just really data mining?  Is that really what we’re using AI for?  If you could give a short explanation, you know, to the listeners what is a best practice of when to use Ai and how?

Memme Onwudiwe: Now, that’s such a good question and you know, I was even a little bit irresponsible on how I talk about AMLS the couple sentences because to your point, it’s much more than just kind of data mining contracts, right?  And I think, you know, as an industry of legal technology, we’ve been a bit irresponsible with slapping artificial intelligence or AI on everything without being clear about what’s being done, right?  So, what I was just talking about, right, passively structuring the data in contract so folks have, you know, dashboards and visibility to take action, right? What I’m really talking about versus a vague moniker of AI is automated content extraction, right?  Which is the idea that there’s content in these contracts that we want to extract automatically, right?  That’s only one specific used case for AI and not even legal but just in contracts, right?  You could think of AI tools that might instead automatically review contracts, right, based upon your playbooks, right?  You might accept this language in certain situations, maybe the AI is able to assess the document and see whether or not you’re going to — whether or not you’re going to sign it or whether or not be to be escalated to a human, right?

So maybe instead of the human you’re doing 100% of the agreements, may be only 50% really rise to the level that human need to touch and they can spend their time elsewhere, right?  You could even think of an AI from a classification perspective, right?  You know, we’ve built algorithms that will go through 10,000 documents and say, “Hey, these are the contracts and these are the non-contracts as people don’t have visibility” or even the idea of, “Hey, we have this parent-child agreements, right?  Maybe we have these, you know, amendments, tens and hundreds of amendments we’ve been doing with the same vendors, can we have an AI go through that mess of contracts to actually order them based off that familial connection-based off of the kind of the dynamics going in there, right?  And so there’s a lot of used cases for artificial intelligence within legal and also within contracting.  And I think of it as, you know, even though you don’t think LinkedIn or you know Tesla or Google or Spotify as AI companies, it’s really what they are.  And you know, we should not be surprised that the different tools that we are leveraging in legal are benefitting in using AI because it’s happening across our lives and across many different domains as well.

Carl Morrison: So Memme, you were talking about some of the tasks that AI can help with.  What are some of the higher level tasks that AI can help when we’re talking about especially for the world of a corporate paralegal?

Memme Onwudiwe: Most definitely.  I mean I would say that what’s really enabled is folks to attack higher level issues that they wouldn’t be able to attack without it, right?  And so if you look at right now how folks look at playbooks for example, right? You know, it would be a massive project to go and say, “Hey, A want to revamp our negotiating playbooks and make them more efficient”, right?   But if you look at your contracts as data, you look at the outcomes of those negotiations as data points, right?  And you could say, “Hey, actually, even though we say that, we only accept governing law in New York, 30% of the time we’re them in Texas”, right? So every time we’re saying we don’t do Texas, we might be adding a couple days negotiation that don’t need to be added, right?  And so by arming folks kind of with some of this advanced data and in addition to the advanced tasks like negotiating as I talked them before, but it allows folks to do more advanced daily used cases that, you know, without the visibility into the underlying data, they don’t know how to make those changes to make things more efficient.

Carl Morrison: Your answer literally just blew my brain all over the place because I am working on a project of implementing new tech in our legal department and part of this will also involve me creating new playbooks for playbooks didn’t necessarily exist.

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And you just kind of blew my socks off because I really didn’t think about that particular task using AI.  So look, guys, me even asking Memme questions, I’m learning stuff.  So thanks Memme.

Memme Onwudiwe: Well, I’m happy to.

Carl Morrison: So using AI can really help not only the paralegal with their respective daily work life but you said in the presentation at the NALA Conference that it can help with the business goals and strategies.  Tell the listeners a little bit of how can AI really help accomplish business goals and strategies?

Memme Onwudiwe: Yeah, and this I think this really excites folks because, you know, for so long in folks I’ve seen this kind of been business issues where you might not bring in legal in legal operations, right?  You know, but we see examples with like during COVID.  We saw some companies who because of supply chain issues, you know, we’re not able to deliver all of the items that they were prescribed to, right?  And so they had an issue, right.  And that’s not an issue typically where you would say bring up legal operations.  You know, we need to do some contract with me, right?  You’d be thinking, “Hey, you know, we’d have a finance conversation”, right? But legal operation was able to actually say, “Hey, you know, with a lot of our customers, we have a clause in there called the partial shipment clause”, right, which says that if we only can provide a partial amount of the shipment, we would still get paid pro rata versus delivering not all of it and getting paid nothing.  And so, you know, just one data point isn’t helpful but to be able to quickly get an algorithm and find that information across all of your tens of thousands of agreements, you now can quickly say, “Hey, finance, if we focus on delivering to these particular customers and clients will be the most financially kind of important to us”, right?  And so even though contracts reviewed by and kind of, you know, are held by legal in many organizations, you know, contracts are the most important data point as a business, right?  It manages and kind of controls every customer, supplier, and, you know, employee relationship, right?  And so, being able to mine that information even if it’s legal is going to impact to that organization.

Carl Morrison: It’s funny that you’re saying that and kind of keeping it, you know, on the contracting side, I was just thinking about, you know, within the next year part of, you know, after we implement technology and establish certain policies and playbooks around these certain workflows and processes, that’s where AI helps even not just the contracting world but you know the spend world, the legal spend world and understanding because the legal department typically is always called a cost center but really were revenue protectors and as such, we have technology like AI to help us really be able to drive the business even in the legal department and help the business as an Enterprise achieve the goals and strategies that they’re implementing.

Memme Onwudiwe: Agreed 100% and I think that this vision is the right one and really elevates the role of legal in organizations.

Carl Morrison: So in the conference, in your session, you referred to and I loved this, you called it Corporate Paralegal 2.0.  So for the listeners that maybe they attended virtually or they now listen to it recorded, how can a corporate paralegal level up to being, you know, that 2.0 paralegal in house?  How can AI help level up the paralegal?

Memme Onwudiwe: Yeah, most definitely.  I mean I think it’s really around doubling down on some of that what we talked about early on about the shift from generating contract data, you know, to instead leveraging and managing it.  It’s being able to kind of put yourself and get skills on that side of it.  So, you know, it can be as advanced as kind of being able to train algorithms and a lot of advanced systems, you know, for a contract management, it make it really simple to do that in spot check but it’s also being able to, you know, when you have a vendor who is offering a tool that has AI instead of just sitting back and listening to them, you know, say that eventually engaging and say, “Hey, let me test that okay, let me.”  if he is claiming it can do X or Y, here’s a contract you’ve never seen before right now, show me your tool doing that, right, and taking that active role because I feel like a lot of folks right now because it’s AI, its technology, its kind of advanced, you know, folks kind of shy away, right?  Even though folks use Spotify every day, right?  And if Spotify stop using AI, you would know within one song, right?

(00:15:03)

And, you know, folks should be comfortable in actually being able to test and evaluate these things and so I think a paralegal who’s comfortable with those kinds of technologies, who knows how to actually evaluate and spot check algorithms and ultimately will be able to have new used cases that come up and instead of having to dive through tens of thousands of pages and extract something new, he’s able to take a few examples and train a robust algorithm to find that and then leverage that because of the time saved, you know, that’s the stance that we kind of talking about when we say Corporate Paralegal 2.0.

Carl Morrison: And it’s not just you know, we were kind of focused in on the corporate paralegal, but AI plays and does and can have a role in virtually every practice area.  You may not be using as fully as the legal department of Google, but AI is there and, you know, if you are an individual that is reluctant to learn about some of this technology out there especially when it comes to AI, you’re going to be left behind.  And so, you know, it’s important for all of us paralegals no matter what practice area that you’re working in to stay on top of because the second you quit learning is the second you get left behind, you become irrelevant as a professional.  So that’s my little tidbit there.

Memme Onwudiwe: No, I love that.

Carl Morrison: Let’s take a a short commercial break and then we’re right up against the time.  So listeners, don’t turn that dial.

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Carl Morrison: Welcome back to the Paralegal Voice.  Before the break, we were talking with Memme about being a corporate paralegal 2.0 which I loved by the way Memme.  So how can AI assist when, you know, you want to take what’s in the contracts to get value from them?  How does that work?

Memme Onwudiwe: Yeah, most definitely.  I mean the first thing you need to do is to take your contracts and look at them from a data perspective and so actually one of our partners Jeff Marple from KPL, you know, he always says contracts are tiny jails for data, you know, and you need to take that approach, right?  And so when you look at your contracts, you need to see that if it’s just a bunch of documents and folders, that’s unstructured data, right?  Think about the questions you can answer, whether someone said, “Hey, show me every force majeure that references epidemics, pandemics or quarantines.  You might scoff at them like I can’t just do that.  Come on.  But it’s 2022 and your car can drive you to work and you should be able to do that, right? And so, when we say structuring the data in your contracts, we mean knowing every single effective date, every single expiration date, every single renewal term, every single indemnity, every single liability.  I’m not saying I know half of them or we started tracking this data point at this point.  No.  If you don’t have the data for every single document then it’s not robust enough to give you the visibility that you can rely on, right?  And once you have that structured data from all your contracts, then you can go to finance and say, “Hey, I actually looked at all of our sales agreements and even though we always say that we only do 90-day termination for convenience, did you know that 30% of our agreements have something that’s 10 days or 15 days or under for termination for convenience.  So if we have the worst 15 days ever, it looks like this but did you also know that of those 30% of the contracts, half of them are coming up for renegotiation or expiration in this next fiscal year.  So by doing targeted renegotiations, we can bring that risk from here to there, right?  That’s a conversation that’s not even happening right, because folks don’t even know that data exists but once you actually structure the data in your contracts, you can start asking questions.  You can start engaging with it, right?  I mean that’s why Google has made the internet manageable by structuring the data of it and allowing you to query it, right?  We don’t have that same capability for the contracts and legal obligations and business commitments that your company has made over the last decade and that needs to change.

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Carl Morrison: I’d love to hear what you just said a second ago.  It wasn’t about the tiny jail cell.

Memme Onwudiwe: Oh yeah, once again, Jeff Marple from Keesal Propulsion Labs (KPL) that contracts are tiny jails for data.  

Carl Morrison: I love that. I’m stealing that, but I love that.

Memme Onwudiwe: It’s been stoked. I’m holding it right now it’s what you said.

Carl Morrison: So I want to get a tiny bit tech geeky for tech geeks out there that are listening, and let’s talk about algorithms.  And for those that may not know much about what an algorithm, when we’re talking about the term algorithm.  In the simplest terminology, algorithms were really step-by-step instructions that really help a computer complete something, a calculation for example, but basically telling the computer to do something.  When it comes to mining contract data for example, you know, algorithms can help execute on what you’ wanted the computer to do and you talked about in your particular session at the conference about algorithm development.  So how does a paralegal assist and you just mentioned it a second ago too, how does a paralegal assist in the development of algorithms when using AI?

Memme Onwudiwe: Yeah, most definitely and so I mean one, most if you’re looking at AI contract management, you know, tools in that space, you should always have one to have a robust catalog of AI that works out of the box, right, because you shouldn’t have to be, you know, a data scientist to kind of leverage these tools, right?  Just like the data scientist use Spotify or Google, right?  They’re the driver, self-driving kind.  So there should be some level of native algorithms, right?  But, of course, there’s a lot of used cases that come up and people didn’t know that they need to know their fore majeure until 2020, right?  And so there’s going to be situations where you either need to track new things and in those situations, I would look for tools where you can provide both positive training and say, “Hey, these are some examples of what this clause looks like”, you know, and so we can give that language to the AI.  We can also do in some of these advanced systems as well like Evisort is to provide some negative examples to and say, “Hey, you know, this is something that might look like it, but no it’s not this”, right?  And so when you’re talking about those situations and we can dive in a little bit deeper into kind of spot checking accuracy and kind of, you know, developing, I say that’s important.  I think, you know, one thing that we’ve seen that super helpful is that it’s not just the AI level.  It’s a really fun word but how about but how about Boolean search, right?  How about being able to as you doing Westlaw say, “Hey, show me documents that have maybe the word indemnity five words away from supplier”, right?  And so now, if I’m trying to train an algorithm to find a supplier indemnity, I can train one but then I can tell the AI, “Hey, go to my documents, show me situations where we didn’t find this clause”, but we did find words like supplier indemnity and then I can kind of find my own false positives, put those in there and kind of train the AI with the things missed, right?  And so there’s a lot of tactics like that, you know, I think folks will be getting more skill on it.

Carl Morrison: To me, algorithms are like, you know, teaching a child how to identify a circle versus a square.  You’re training the child of visibly recognize the difference and you talked about teaching AI.  There’s different ways to teach it.  So how do you train AI?

Memme Onwudiwe: Yeah, it’s really about, you know, providing a different kind of visibility and examples and when we went into the session to wear different types of AI, , right?  You got a computer vision and we talked about extraction and classification as well.  I’ll take with Evisort, which we started this company as law students at Harvard and data scientist at MIT, right?  I was the one that was CEO was a 2L, right?  And we actually spent three years at the Harvard Innovation Lab, you know, where we had took millions and millions of contracts.  We really didn’t have computer scientists, only a data scientist.  We didn’t have a platform.  We just have algorithms.  We’re just training AI by providing it with kind of millions and millions of these different kind of varied examples and so of course, the idea is that when it reaches something new and see something I haven’t seen before, it can take its learning some the past and interact with it and kind of provides folks kind of answers s they’re looking for and so I think something is really important in all of this is to always test, test, test live.  People can talk about this all the time.  You know, if you’re sending a contract a day ahead, you know, that you shouldn’t be doing that.  In Google, it only takes a couple seconds.  You know, it shouldn’t take more than a couple seconds to analyze your contract and you know, you buy these tools so they work on documents that you’ve never seen before, right?  Not just they work on your template, you generally know what’s inside of those, right?  And so always make sure that when you’re getting tools that they’re flexible enough to work on contracts that haven’t seen before and the easiest way to do that is just to simply throw a document and test it, something that you haven’t sent beforehand and see if it can handle it.

(00:25:05)

Carl Morrison: For me, you hit the nail on the head when you’re talking about asking what the AI does from the vendor and testing the AI.  The worst mistake a paralegal or legal operations professional can do is to not deep dive before you implement because you never want to be on the other side of that fence and realize well I’m getting crappy data because I didn’t fully understand what the AI for this particular product did and I didn’t ask the vendor the right questions and I didn’t test it.  To me, that’s a big part of when you go to look at and identify a vendor that you want to start using for AI.  Exactly what you said, test, test, test because what happens Memme when you don’t test?

Memme Onwudiwe: When you don’t test, then you get it and then you realize you have to spend months training it and then, you know, each new thing has to get trained in.  You want value.  The beauty of AI is it can analyze 50,000 contracts in a day and we’ve had places we’ve done negative implementations because the proof of value was then sending 50,000 contracts, those analyzing it, giving them all that data and then they afterwards say, “Hey, we want to use this product”, not buying the product and then finding out that after you have a three-year commitment that the AI doesn’t do work at yet instead maybe have someone offshore to type in the information which is out of date the second we get it.  You could deferring contracts, right?

Carl Morrison: Yeah, I mean all I’m hearing when you and I are sitting here and discussing this very issue is dollar sign, dollar sign, dollar sign because you’re costing the company money, especially if you having to train and train and train the AI because you didn’t test it ahead of time, yikes, because okay six months you have a product that’s pretty much useless because you can’t tap into its value pretty much from the start.

Memme Onwudiwe: Exactly, exactly and so hopefully — I think that hopefully things are changing for folks and I hope that instead of being advanced and wow, you know, if you look at the other technology we use every day, this is really where things should be in our industry.  Your car shouldn’t drive you to work to go copy paste clauses, right?

Carl Morrison: Right, exactly right. Let me ask you this, we’ve got one more question before we run out of time but what kind of data can AI really assist the corporate paralegal be able to track?  What some of the data types?

Memme Onwudiwe: That’s a great question, right?  And so when we think especially about the type of – I mean talking about automated content extraction from contracts just because AI could do so much, I’d say a big thing is really — it’s always going to be the data that resides within your contracts, right?  And so like we can’t really do performance, right, because we don’t know if you’ve actually got them performed against that contract out in the field, right?  But when it comes to what you’ve committed yourself to, right, you know what are the different — I think of it like this, it’s actually we’re going to look back at the conversations like this in 10 years and it’s going to be crazy to us that you would find a contract with hundreds of legal and business commitments and only track 10 of things.  You know what mean?

Carl Morrison: Right.

Memme Onwudiwe: If you look at the way that kind of we’re doing things now, it’s out of an era where the cost for tracking an additional contract data point was incredibly high because you have to have someone going to review all of your thousands of agreements just to learn more thing, right?  And so we lived in a whole legal industry that assumes even though we’re here to mitigate risk and make sure our company has only the best commitments on top.  We’re actually not going to track with those commitments because it’s too hard.  You know, but like we actually in a time now when you can and that transition is interesting and scary, but I think fun and I think that, you know, looking back in a couple of years, right now, it sounds kind of wild.  In 10 years, it would be negligent not to do the things that we’ve been talking about today.

Carl Morrison: Yeah, exactly right.  Alright, well unfortunately we’re running out of time but as longtime listeners know, I always have a fun question and Memme your question should you choose to answer it, if you could implant your own intelligence into an artificial life-form, would you, and I always think about the Big Bang Theory episode where Sheldon decided he wanted to stay in his bedroom and he didn’t want to interact with humans, so he was going to become “a robot”, so it was an iPad and a webcam and on this computer thing that he could drive around, but be that as it may, I mean if you could put your intelligence in some sort of artificial life-form, would you do it?

Memme Onwudiwe: Yeah, yeah.  I mean so one let me just say I do think this technology is way more close than we think.

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And I always say that the biggest argument I’m going to have with my kids is going to be about brain chips just like it’s about cell phones with my parents.  That being said, you know, not now.  I wouldn’t jump the gun but, you know, if it’s like that I’m very old, things are about to go and then there’s this kind of, you know, digital Nirvana, yeah I might be on that.

Carl Morrison: You and I are just going to be a giant head in a glass bowl that our intelligence will be in some machine.

Memme Onwudiwe: Yes.

Carl Morrison: Well Memme, thank you so much, really appreciate you taking the time.  If the listeners wanted to reach out to you, how could they reach out to you?  What would be the best way?

Memme Onwudiwe: Well, Memme is M-E-M-M-E and you can find me, Memme Onwudiwe at LinkedIn or if you want to just reach out, you can email me at [email protected], E-V-I-S-O-R-T.

Carl Morrison: Perfect.  Memme, thank you so much, really appreciate it.  And stay tuned guys because I’m sure Memme and I will continue to do articles and who knows what, right Memme?

Memme Onwudiwe: Oh yeah, a 100% and definitely check out the article that we’ve done in the past about kind of different paralegal pathways.  It is an excellent piece.

Carl Morrison: Absolutely.  Thank you Memme.  Alright, hang tight everyone. We’ll be right back after this short break station identification.

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