We welcomed Alex Su (Head of Community Development at Ironclad), Aprajita Tyagi (Commercial Counsel at Elastic), Taylor Dimler (Sr Commercial Counsel at Twist Bioscience) and Ariel Risinger (Commercial Counsel at Vroom) to discuss all things commercial contracting in 2023.
In this event we cover:
- Tech adoption in contract management
- AI in the legal world
- Market trends in 2023
- What to expect in 2024
Let’s dig in!
Tech Adoption in Contract Management
Increasing Reliance on Technology
- 04:00 Ironclad is seeing strong adoption of technology relating to contracts as that there's a lot of work to be done with very few resources. He mentions that many companies are still using paper for contracting but digital contracting is becoming increasingly popular.
- 05:20 There are many options available, making it difficult to find the right solution.
- 05:57 The contracting process can be complex due to factors such as organization size, process, and risk profile
Importance of Buy-In
- 06:49 If team members aren't used to utilizing tech tools, implementation may fail.
- 07:48 Smart solutions like Ironclad can save time and improve communication between departments.
- 08:50 There is an increasing dependence on tech tools in day-to-day tasks such as using Monday for overall management or Slack for internal communication.
New Tools in the Legal Tech Market
The Limitations of AI in Legal Work
- 10:57 We explore skepticism about the impact of AI on legal work, stating that it cannot replace human critical thinking and troubleshooting. Even something as simple as an NDA required human intervention to resolve issues.
The Role of Technology in Legal Work
- 13:43 CLMs make tasks easier by helping with organization and keeping track of deadlines.
- 14:16 They note that technology is great for organizing information and creating data about contracts but ultimately cannot replace human decision-making.
Trends in Contracting
Companies Moving Up Market
- 15:23 Companies are moving up market and selling more expensive products with complicated contracts meaning there is a lot of demand for commercial counsel across the board.
Role of Technology in Contracting
- 16:10 Technology can help with routing to more approvers internally but cannot replace the negotiation or redlining process.
- 16:46 AI can create the bones of an agreement based on a database of agreements, but it does not take away from the need for lawyers to negotiate terms and evaluate risk.
Using AI to Empower Legal Teams
- 18:00 Each AI unit should be viewed as another staff member on your legal team. There is a lot of implementation, training, review, feedback, and refinement involved when using AI for tasks like patent analysis or contract management.
- 18:56 Using AI can empower paralegals and contract managers to handle simpler tasks so that lawyers can focus on larger collaboration agreements.
AI-Based Tools in the Legal Industry
AI as a Helper, Not a Replacement
- 19:51 The panelists agree that AI-based tools are here to aid attorneys in their tasks rather than replace them.
- 20:16 There is more adoption of tools that help pull out data from historical documents or highlight key risks, but based on analysis and discussions, these tools will not be replacing attorneys anytime soon.
- 21:10 Chat GPT clarifies that lawyers apply the law to unique facts and situations, while the tool can help find the law that needs to be applied.
Doing More with Less in Legal Operations
- 26:10 Suggestion to follow ACV thresholds but there have been more exceptions lately to those thresholds.
- 27:36 Some people use conditional workflows as well so that they can automate certain processes and allow sales to understand what will and what won’t be approved.
- 28:56 Keeping things simple and letting sales self serve goes a long way.
Providing Sales Team with Playbook
- 30:15 Provide playbooks to sales teams that include paragraphs they can share with customers to explain why they prefer their template.
- Empowering sales teams to use these playbooks will free up legal’s time and inbox.
Market Trends in Negotiations
Indemnities and Damages Caps
- 40:29 Participants mention that indemnities and damages caps related to customer information breaches are being heavily debated.
Changes in Force Major Provisions
- 41:26 The pandemic has brought changes to Force Major provisions and businesses are required to make active steps to mitigate risks.
- Force Major provisions have become more nuanced.
Continuity as an SLA
- 42:28 Continuity is becoming more like an SLA (Service Level Agreement). Providers need redundancies in place to continue providing services during pandemics or natural disasters.
- Customers should not have to pay full price if providers cannot provide all services.
Focus on Privacy
- 45:12 Privacy has become a huge issue with CPRA and GDPR constantly being updated.
- 45:50 Privacy negotiations are regionally based and depend on who is involved. The type of materials being exchanged between parties also affects privacy negotiations.
Reasons for Rise in Indemnity Caps
- 46:26 The rise in indemnity caps is due to a combination of factors such as GDPR regulations, increased awareness of potential costs associated with data breaches, and global privacy laws.
- 47:06 People realized that what was once a nebulous risk now had actual numbers attached to it, leading to an increase in demand for limiting risks associated with data breaches.
Predictions for 2024
Commercial Contracting Trends
- 48:25 AI will be important but may die down after initial hype.
- 48:44 There will be an increase in demand for commercial work due to more contracts being exchanged with technology being integrated into conversations.
- 49:36 More tech tools will be used to support tasks and there will be more utilization of AI to help with analysis or research.
- 50:09 Companies will empower staff members from different departments to negotiate contracts rather than just relying on attorneys.
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