Using AI to Streamline Procurement and Legal Processes

In this episode of Procurement Reimagined your host, Daniel Barnes, is joined by David Tollen, Author and Founder at Tech Contracts Academy™ and Sycamore Legal™.

David Tollen is the author of the American Bar Association's manual on IT contracts, The Tech Contracts Handbook: the number-1 bestseller from the ABA's IP Section. He's the founder of Sycamore Legal in San Francisco, where he and his staff draft and negotiate information technology and intellectual property agreements. Finally, David trains lawyers and non-lawyers on drafting and negotiating tech contracts, particularly cloud computing agreements and software licenses, through Tech Contracts Academy. 

Key highlights:

• 09:48 - 11:01 - Can AI Improve Contract Drafting? 
  David explains that specialised AI tools to draft and analyse contracts have been around for a while. While based on large language models, these tools are different and distinct from tools like ChatGPT. These specialised software have data from over 10,000 contracts and analyse your contract for best practices against their inbuilt database. You can use these tools to evaluate your contracts for indemnity clauses. 

• 14:51 - 17:21 - Will AI Adoption Lead to Job Cuts in Procurement and Legal Domains?
  The adoption of technology lags its evolution by a significant period of time. Hence, David doesn’t see AI creating job losses for at least the next ten years since, with every technical evolution, you need to develop systems software around it that leverages its benefits. Until then, AI will continue to be an enabler and make people more efficient at what they do. Over the long run, some jobs may get replaced by AI, but that will just create demand for people with new skills. 
  
  

• 19:17 - 20:55 - Using AI for High-Volume and Low-Value Tasks
  David explains how some facets of procurement and legal contracts, like drafting NDAs, take up too much time for the procurement and legal teams. The NDAs cover similar points, and these tasks that are a part of every contract but of lower value can easily be automated with AI. David mentions that contracting, by its inherent nature, is not an efficient process, and many clauses are added that cannot be backed with data. In these situations, we can use AI to figure out probabilities and streamline the process by eliminating clauses with negligible probability. 

Quotes:

• “One of the things I say is most AI is just software. It's when you get into generative AI that we start to introduce all kinds of new issues and problems, and ChatGPT is an example of that”.
  
  
• “People thought bank tellers would lose their jobs when ATMs came out. However, I read recently there are now more bank tellers per capita than in 1970, before the ATM came out, because now they are doing different roles”. 
  
  
• “One way to expand as procurement professionals is to work like data scientists, using the AI to figure out things like probabilities. How likely is it that this problem clause will cause a problem? What's the likely size of the problem? And can we calculate the likely size of this problem to determine if it is worth walking away from the deal?”