Contract analytics firm Seal Software on Wednesday launched its first product entry in the race to create software that automates contract negotiation between parties.
Seal Now works in Microsoft Word to highlight which contract provisions are out-of-line with a company’s standard terms. The real-time negotiations product also suggests new clauses and terms that are approved by the company.
Contract analytics platforms have primarily been used to categorize and track provisions in signed contracts. But a growing number of technology firms are trying to automate the actual negotiation process — often by funneling their insights straight into Microsoft Word, where most lawyers edit documents.
BlackBoiler, for instance, says it can learn how lawyers negotiate contracts and can automate the red-lining of incoming contracts. The start-up has said companies spend $7 billion on lawyers reviewing contracts that it believes it can automate. Another legal tech company, LawGeex, says it offers automated contract review “combined with human intelligence.”
“What the introduction of AI to the negotiation process is going to do is deliver much more rational suggestions as to what the language should be and what will be accepted,” said Jim Wagner, Seal’s president. “A lot of what we’re doing [with Seal Now] is foundational to that.”
Wagner said Seal Now is designed to be used on commercial contracts rather than NDAs, which have been a focus of the market’s early sales because of their relative simplicity. Seal has been making select sales of the new product, which will be more broadly available in 2020.
UnitedLex has signed on as an early user of Seal Now. The alternative legal services provider says its clients will receive $250 million in value from the technology due to faster contract cycle times.
“We want to invest our time and support in those companies that get it and can answer the call for ROI that is demanded by the largest companies in the world,” UnitedLex CEO Dan Reed said. “That’s one of the reasons we chose Seal as one of our key partners.”
According to Seal, early adopters of the tool have reported their timeline for negotiation has become up to 80% more efficient. Still, Wagner said there will be a long road before artificial intelligence engines handle negotiations largely on their own.
“You will see, increasingly, that the recommendations will become more effective and more self-effectuating,” Wagner said. “That is where the industry will go. But it won’t happen overnight. And we believe the first step in that is to set a foundation to make sure that our clients understand with a high degree of granularity what is and what is not in their contracts.”