Contract analysis: Difference between revisions

But it turns out text lovingly confected by some unknown [[legal eagle]] isn’t as easy to review as all that. Even boring syntactical things like plurals, irregular verbs and parentheticals (we lawyers ''love'' parentheticals)<ref>See what I did there?</ref> are hard to code for. In time the machine will get better, but the universe of possible ways of articulating a single idea remains infinite and, while many [[legal eagles]] suffer a form of locked-in syndrome with regard to many aspects of their creativity, it does not extend to methods by which they may torture prose. When it comes to textual complexity and saying things which, [[for the avoidance of doubt]], are ''not'' in doubt, lawyers are extemporisational geniuses.  

Parsing the fevered language of a human lawyer is ''beyond the means of [[natural language processing]]''. There will always need some kind of a human sense check. So, most commercial [[contract review tool]]s hire paralegals, in low-cost jurisdictions, to check the output before sending it back.  

This has three unfortunate consequences:

=====It is slow=====

Firstly, it slows down the output: Instead of getting your markup immediately, you get it three-quarters of an hour or more later — that ''same'' three-quarters of an hour you ''in which you could have read it for yourself''. This is more than enough time to become comprehensively distracted by something else.

=====It is more expensive=====

Secondly, it adds to the cost. Now, to be sure, [[reg tech]] providers are master [[rent-seeker]]s, but here, in their bench of paralegal sense-checkers, they have an actual out-of-pocket cost which they have to pay. Thus, the [[contract review tool]] must carry a heavy charge per document review. Better ones charge less than a hundred bucks. Some charge as much as three hundred, ''per review''.  

Suddenly the cost proposition that swung the business case looks squiffy: you assumed you were saving an hour [[legal]]’s time, which you unitise at, say, $250. But that is a ''nominal'' cost. It is sunk. A new [[confi]] coming in doesn’t generate that cost, and firing the thing out to your [[contract review tool]] doesn’t save it. Internal [[legal eagles]] are a fixed cost, and are notoriously hard to [[shredding|shred]] back to the business. They just sit there, on the firm’s dime, ''whether you use them or not''. Most work hard, of course — the [[legal eagle]] who punches out at 5pm on the smacker on ''any'' day, let alone ''every'' day is a rare bird. He ''will'' look at that [[confi]], and anything else that needs to get done, at some stage during the day. ''[[Legal eagle]]s don’t work to rule''.<ref>As it happens, the occasional [[confi]] can be a pleasant distraction: a nice re-charger after a hard morning slogging through a series of regulatory change stakeholder [[Skype]] calls. Hey, management team: why don’t you try to get rid of all the ''stakeholder management calls''? ''There'' is a question.</ref>  

So, unless you can prove that, with your [[contract review tool]] you can actually let some of your lawyers ''go'', ''it is not actually saving you any real money''. It is ''costing'' real money — ''more'' than it would have cost your internal team just knock off the confi in the first place.

=====It isn’t actually reg tech at all. It’s just [[outsourcing]] that you’re ''calling'' [[reg tech]]=====

So [[reg tech]] that doesn’t work without a human standing behind it to prop it up isn’t [[reg tech]]: it is a ''gimmick''. What we are really talking about here is ''[[outsourcing]]''. But to a black box: these are personnel who you can’t see, you didn’t hire and you can’t evaluate, but (we must assume) are cheaper than your own personnel, since you are now paying for them, this confounded [[reg tech]],<ref>''Also'' a black box, by the way: how much of the work-product is the tech, how much the [[meatware]]? If they won’t show you, assume it is mostly the [[meatware]].</ref> not to mention the [[Rent-seeking|rent]] your [[software as a service]] provider is seeking to extract on the whole operation. Now unless the reg tech guy has figured out a better way to lowball recruits than you have, this means the people checking your confis are lower quality than your people. In this case, hire the [[reg tech]] firm as a recruitment consultant, not a crappy [[AI]] provider.

Now this is not so much a function of the technology but the perverse incentives that operate inside a sprawling organisation. Bear in mind the primary driver of most employees in risk and control functions is covering their ''own'' arses first, ''then'', where practicable, their organisation’s. There are two places where legal decisions need to be made: Firstly, in configuring the [[playbook]] that supplies the parameters for the [[contract review tool]]; and secondly, by the [[legal eagle]] herself, in combat during a live negotiation, when confronted with a challenge from the counterparty.