One of the less exciting parts of running a major bid has got to be the contract review. Whilst I've had fun on my last two pitches taking our legal team in to sit face to face with our potential client (they're really really good, it's amazing to watch them work!), no client ever send out a standard contract. This happens time and time again despite recommendations from most procurement and technical bodies to use standard contracts to remove barriers and speed up processes. Every major client I've dealt with has had their lawyers produce an edited version of industry standard contract, amending terms and adding sections to try and make it work better for them.
Organisations like ours carry a big overhead to deal with legal matters arising, but even with the best team in the business there are a lot of smaller deals where it's left to directors or associates to check contracts.
The concept of using AI to carry out contract reviews may seem like a risky proposition, but a new start-up, Klarity, look to have found a good first step, building software that will do the first check of the documents and highlight any areas of ambiguity or changes from standard wording. This could, they believe, quarter the time it takes for a legal team to review a document.
This could be a big step forward for the construction industry. With a small number of standard forms (NEC3/4 etc), a tool which can identify quickly any changes in contracts could dramatically improve the management of contract risk during tenders and help legal teams focus their time on getting a better deal for the business.
For bid directors like me, hopefully it means a legal check of documentation could come sooner, enabling me to raise clarifications earlier in the process and start the to-and-fro process of ironing out the normally challenges over unlimited liability and apportionment of risk.
I can also see the software proving useful when comparing PQQ documentation - even though more organisations say they're moving to standard forms such as PAS91, the urge to tweak and tailor questions still exists. Being able to quickly identify changes in requirements to PQQ documentation will enable bid teams to focus more time on the areas that matter whilst relying on solid stock responses for generic, corporate sections of PQQs.
You may think that this kind of work would be difficult to automate, but Antos said that contracts have fairly standard language and most companies use ‘playbooks.’ “Think of the playbook as a checklist for NDAs, sales agreements and vendor agreements — what they are looking for and specific preferences on what they agree to or what needs to be changed,” Antos explained. Klarity is a subscription cloud service that checks contracts in Microsoft Word documents using NLP. It makes suggestions when it sees something that doesn’t match up with the playbook checklist. The product then generates a document, and a human lawyer reviews and signs off on the suggested changes, reducing the review time from an hour or more to 10 or 15 minutes.