AI negotiates a legal contract without human involvement for the first time

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In a world first, artificial intelligence demonstrated the ability to negotiate a contract autonomously with another artificial intelligence, without any human involvement.

British AI company Luminance has developed an AI system based on its own extended language model (LLM) to automatically analyze and make changes to contracts. LLMs are a type of AI algorithm that can perform general-purpose language processing and generation.

Jaeger Glucina, Luminance’s chief of staff and managing director, said the company’s new AI aims to eliminate much of the paperwork that lawyers typically have to complete on a daily basis.

In Glucina’s own words, Autopilot “handles day-to-day negotiations, allowing lawyers to use their creativity where it counts, and not get bogged down in this type of work.”

“It’s simply a negotiation between AI and AI, from opening a contract in Word to negotiating the terms and then sending it to DocuSign,” she said to CNBC in an interview.

“All of that is now handled by the AI, which is not only trained in law, which we said is very important, but also understands your business.”

Luminance’s Autopilot feature is much more advanced than Lumi, Luminance’s ChatGPT-like chatbot.

This tool, which Luminance says is designed to act more like a legal “co-pilot,” allows lawyers to query and review parts of a contract to identify red flags and clauses that could be problematic .

With Autopilot, the software can operate independently of a human, although humans can still review each step of the process and the software keeps a log of any changes the AI ​​makes.

CNBC took a look at the technology in action during a demonstration at Luminance’s London offices. It’s super fast. The clauses were analyzed, modifications were made and the contract was finalized within minutes.

Legal “autopilot”

There are two lawyers on either side of the deal: Luminance’s general counsel and the general counsel of one of Luminance’s clients, the search firm ProSapient.

Two monitors on either side of the room show photos of the lawyers involved – but the forces driving the analysis of the contract, scrutinizing its contents and making recommendations are entirely artificial intelligence.

At the event, AI negotiators discuss a non-disclosure agreement, or NDA, that one party wants the other to sign. NDAs are a bogeyman in the legal profession, not least because they impose strict limits on confidentiality and require extensive review, Glucina said.

“Sales teams often wait for legal teams to conclude their NDAs in order to move things to the next step,” Glucina told CNBC. “So that can block revenue, new business partnerships and just general business relationships. So by eliminating that, it’s going to have a huge effect on all parts of the business.”

Legal teams spend about 80% of their time reviewing and negotiating routine documents, according to Glucina.

Luminance’s software begins by highlighting the disputed clauses in red. These clauses are then changed to something more appropriate, and the AI ​​keeps a log of the changes made as it progresses. The AI ​​takes into account companies’ preferences for how they normally negotiate contracts.

For example, the NDA suggests a six-year duration for the contract. But this is against Luminance policy. The AI ​​recognizes this, then automatically rewords it to insert a three-year term for the deal instead.

Glucina said it makes more sense to use a tool like Luminance Autopilot rather than something like OpenAI software because it is specifically tailored to the legal sector, whereas tools like ChatGPT and Anthropic’s Dall-E and Claude are more general platforms.

This was echoed by Peel Hunt, the British investment bank, in a note to clients last week.

“We believe that companies will leverage domain-specific and/or private datasets (e.g. data curated over the course of their operations) to transform general-purpose extended language models (LLMs) into domain-specific models “, said a team of analysts at the company. in the note.

“These should provide superior performance to more general LLMs like OpenAI, Anthropic, Cohere, etc.”

Luminance has not revealed how much it costs to purchase its software. The company sells annual subscription plans allowing unlimited users to access its products, and its customers include Koch Industries and Hitachi Vantara, as well as consulting firms and law firms.

What is Luminance?

Founded in 2016 by mathematicians at the University of Cambridge, Luminance offers legal document analysis software intended to help lawyers become more effective.

The company uses an AI and machine learning-powered platform to process large, complex and fragmented legal data sets, allowing managers to easily assign tasks and track the progress of an entire legal team .

It is backed by Invoke Capital – a venture capital fund created by British technology entrepreneur Mike Lynch – Talis Capital and Future Fifty.

Lynch, a controversial figure who co-founded business software company Autonomy, faces extradition from the UK to the US on fraud charges.

He resigned from Luminance’s board of directors in 2022, although he remains a high-profile supporter.


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