Moving Beyond Cut and Paste: The Criticality of Contract Language

In this episode of Procurement Reimagined, brought to you by Gatekeeper, host Daniel is joined by Ken Adams, Chief Content Officer at LegalSifter, an AI-driven contract management service. 

Ken is a recognised authority on contract language and drafting legal/compliance contracts and is also the author of A Manual of Style for Contract Drafting. He shares his insights on the challenges of using traditional procurement contract language and how creating guidelines and templates can help drive compliance.

Key highlights:

• 06:54 - 09:08 - Traditional Contract Language is a Mess 
  
  Ken explains the content in most contracts today is a stew generated by generations of copy, paste, and tweak approaches to contract drafting. Add the legalese, and you have a problematic mess to decipher and make sense of. Some of the drivers of the copy-paste approach are a lack of resources and skills and the logic of “we contract for the same activity so let’s just go with what a bigger business in our field is doing”. Once an irrelevant or incorrect clause is inserted, the lack of legal skill ensures it’s there in perpetuity.

• 15:20 - 17:03 - Can Generative AI Draft Competent Contracts?

Generative AI works by building a relevant content database and then defining the rules for creating the desired outcome. In the contract world, AI would look at already corrupt data, and hence the output would not be clean. It’s impossible to define rules for all the mistakes in current contracts, as a clause could be ok for one use case but wrong for another. Ken doesn't see AI drafting viable contracts any time soon.   

• 17:52 - 19:23 - Advice for Contract Managers in Procurement

Most contracts are drafted by legal teams who have little to no knowledge of business processes and how business and negotiations are conducted. The lawyers haven’t been good custodians of contract language, and Ken believes inputs from business-centric people will help reduce the opacity. Procurement contracts have multiple constituencies, and each constituency should have a voice in the area of their influence.  

Quotes:

• “Once something is in a contract, people are very reluctant to take it out because the assumption is someone smarter than me thought this was necessary. I don't have the time or expertise to reverse engineer the process, so I'm going to leave it there”.

• “Let's just do a red-line version where we strike out the traditional language and give you an alternative that expresses the same thing. This will have the informed reader saying, What do you want here? What are you looking for? What does this mean?”

• “Let's invite everyone to the party who is competent at handling contract language, regardless of what hat they wear, because contracts involve different constituencies, and it's for the best if everyone involved has some command over contract language”.