Last week, I had a chance to talk to Dan Broderick, CEO and co-founder of BlackBoiler, the contract automation and AI company. We talked about the recent patents secured by BlackBoiler and more importantly Dan’s views where in house legal departments may be headed. I have written about the BlackBoiler product more than once;I am always impressed by Dan’s knowledge about automation, AI, and the legal tech market.
I called Dan since, on the heels of its Series A funding, BlackBoiler announced last week it was recently issued its 6th and 7th patents for its AI-assisted contract review technology. Blackboiler claims that none of it’s competitors – LawGeex, ThoughtRiver, ContracPodAI, Lex Check – own IP in this space, even though they claim to offer similar products. To date, BlackBoiler has been granted seven USPTO allowances and has additional patent applications pending in Canada and Europe.
One of the new patents is for a method of creating seed data through suggested edits to an electronic document. This ability will automate building playbooks and standards for automated contract markup. According to the BlackBoiler press release, less than 25% of legal departments have this kind of playbook.
The other patent allows users to automatically manage standard negotiation clauses by contract domain. This ability will enable revisions to be automatically inserted into contracts with the correct value (e.g., party name, contract subject, contract name, etc.) to match the language used in the agreement, again according to the BlackBoiler press release.
The patents allow the system to read the proposed clause and decide if it’s something that the client will accept. And the system can insert preferred language or extract language that needs to be customized.
I have no way of knowing whether BlackBoiler’s claims that its competitors have no patents is correct. But it would sure seem critical protection to secure. I can’t remember how often I’ve heard the investors ask entrepreneur competitors on the TV show Shark Tank if they had secured patents for their products. I’m also surprised how many competitors say no, which usually means the sharks decline participation. The importance of having patents in this area was fairly self-evident even before the announcement later in the week about ROSS’s demise. According to ROSS, the shut down was due to the litigation brought against ROSS by Thomson Reuters based on infringement of intellectual property. BlackBoiler seems pretty far-sighted to go this route.
But the fun part of the call was getting Dan’s thoughts about where we may be headed in 2021 and beyond. Dan thinks the in house legal department may be evolving as automation tools replace traditional work done by lawyers. He also thinks the better future legal departments won’t be composed of just lawyers. Instead, it will also have data scientists and process managers specialists on board, among others. All these fields go into and will go into legal departments’ ability to provide quality legal services. Presently, observes Broderick, few in-house departments have developed these specialties. But it could be the wave of the future.
With the right combination of automation and outsourcing, the amount of real legal work done by lawyers and the number of lawyers in an in-house legal department could shrink dramatically,
Dan thinks that with the right combination of automation and outsourcing, the amount of real legal work done by lawyers and the number of lawyers in an in-house legal department could shrink dramatically, maybe as much as 90%. Dan claims that BlackBoiler tools themselves can eliminate some 70% of lawyer time dealing with repetitive contracts.
The number of higher cost in-in house lawyers could be reduced while providing better value.
This is good news for businesses and overworked legal departments. Recent surveys confirm that the budgets of many legal departments are tightening, some more than ever before. But by using automation, better analytics (see my recent post), and having work done by the right people (who might not be lawyers) either inside or outside the company, legal departments can substantially reduce costs. The number of higher cost in-in house lawyers could be reduced while providing better value.
All these thoughts came on the heels of the Benjamin Moore announcement it was firing its entire legal department. The reaction from the legal tech media was one of shock and disbelief. But after talking to Dan, I wonder whether Benjamin Moore might be onto something.
Let’s enable the businesspeople to take care of business and call the lawyers only when they genuinely need to help solve the legal portion of a business problem.