Lexpert Magazine

50 LEXPERT MAGAZINE | APRIL/MAY 2017 | CONTRACT AUTOMATION | New Players Emerge While basic forms of contract automa- tion have been present for a long time in Canadian corporate law — since at least the 1980s — the past two years or so have seen much more sophisticated systems emerge, such as Contract Express (produced by Lexpert publisher omson Reuters), Kira Systems, Korbitec's ACL and R AVN, to name a few. ey're being increasingly adopted by Canadian corpo- rate law firms. At Gowling WLG, for one example, the firm has just begun experimenting with a bulk data extraction system that can comb through thousands of contracts in a port- folio and extract specific information or clauses to spot, say, a particular legal risk hidden amongst them. "We've used it on a million-dollar file," says Tamminga. A cli- ent had presented the firm with thousands of contract documents, asking, "What do I do with these?" Tamminga doesn't mince words when it comes to the kind of tedium these systems will manage. "If I want to buy a mall and it has 250 leases in it, I want to know all about those leases. If they are machine-readable, Last year Osler started using Contract Express, a web-based contract automation system that allows a firm to quickly dra, compare and update legal documents. Once the system has been programmed to suit a particular firm's approach to corpo- rate law, lawyers can answer a list of ques- tions posited by the system so it can dra a particular kind of required contract tem- plate. Contract Express can then quickly generate a set of documents — all accu- rately populated with correct names, dates and other data, along with a schedule and appropriate attachments. Aside from the all-important aim of lowering legal spend for clients, says Nick- erson, Contract Express should free up more junior lawyers to do more interesting, higher-value work — maybe a new deal or different transaction they wouldn't have had time for before. If there's any bulwark against progress in contract automation and other legal technologies in the pipeline, it would have to be the billable hour. Which is why, to a large extent, it will be in-house counsel that will push contract automation and other efficiency technologies into the legal main- stream. "e incentives are all backwards. So that's a huge impediment to driving ef- ficiency," argues lawyer Mitch Kowalski, a legal services innovator and author of Avoiding Extinction: Reimagining Legal Services for the 21st Century. Kowalski says this correlation between hours and productivity is exactly what al- lows contract automation companies to sweep in and take a slice of the market. "e system right now rewards inefficiency and penalizes efficiency. And that hurts should I do that automatically? Or do I have [an associate] read all 250 of those leases?" So Gowlings told that big, anxious client, with its digital heap of contracts, "Well, we can't have anybody read them, because they'll die! Here: we'll throw this soware at it and we will see what comes of it. And we got useful stuff!" Toronto-based Kira Systems started up in 2011 and has since had its technology purchased by a handful of major firms in Canada, the UK, Germany and India. Kira co-founder and CEO Noah Waisberg was an M&A lawyer with Weil, Gotshal & Manges LLP in New York City. He says that, for lawyers, due diligence and vetting contracts is the prison equivalent of sledge-hammering boulders to bits. "I did this work. I supervised this work. I knew that it took a ton of time. Finding informa- tion in contracts is one of the main things a junior corporate lawyer does." irty to 60 per cent of an M&A bill is typically due diligence, says Waisberg, mostly because of the time involved in bulk data extraction. Finding exclusivity or non-soliciting clauses in bulk contracts, for instance, is tedious work. at makes it particularly prone to human error. For those lawyers who manage to survive the profession's coming disruption, the technology should presumably free them from such legal toil to pursue higher-value work. Fear and Billing Chief Knowledge Officer Mara Nickerson leads Osler, Hoskin & Harcourt LLP's foray — still in early days — into embed- ding more advanced contract automation technologies and knowledge-management systems into the firm's national practice. "For me, the thing that has changed a lot in the last year or so is that there used to be just a few tools, a few big companies — Contract Express, Exari, HotDocs — that have been around for a long time. Now just about every product that is coming out in the legal industry these days has a docu- ment automation component. It is just becoming embedded in every system. It is finally being seen as core to the efficient process in legal." PHOTO: SHUTTERSTOCK MARK TAMMINGA GOWLING WLG "If you are going to get bent out of shape about what's coming, you are in a world of hurt. It's neither good nor bad. It has no emotive content. It's just coming. Grit your teeth, buckle down, square your shoulders and just do it."

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