AI & GC: The Implications of Software Models on Your Routine Contracts

Has the role of a general counsel—whether inside or outside—gotten easier or more complicated using language learning models (LLMs) that purport to be able to assist with core functions of a general counsel, contract drafting and negotiation?

From our recent experience, the answer is leaning toward “more complicated.”

LLMs, often referred to as artificial intelligence (AI), are not substitutes for skilled legal guidance, but they certainly can appear to be. In fact, many LLMs (some more tailored than others, such as CoCounsel) purport to have the ability to:

• Identify provisions in a contract relevant to the parties, based on the inquiry you put in the model,
• Identify the language more favorable or less favorable to your business, based on similar agreements,
• Offer suggested alternative language and even how to frame it,
• Draft, in a very short period, routine contracts tailored to your specifications, and
• Offer a wide variety of other handy tools

It is true that general legal services are changing as a result of AI tools, making it seemingly easier to provide succinct, faster responses, ignoring all the issues of hallucination or incorrect information, or the reality that an LLM is only as good as the information it is trained on.

But let’s work with the assumptions that the tools work perfectly. Even if that is the case, why might that nonetheless complicate a general counsel’s role?

Well, both sides would have the tools.

LLMs negotiating against each other will not help a general counsel reach the best possible outcome for the business it represents. LLMs are no substitute for knowledge, skill, experience, judgment, and recognition of the market position the parties occupy relative to one another, nor can the LLM’s think strategically and long-term. For sophisticated GCs, this may appear to be an opportunity—and when both sides have sophisticated GCs, there still may be an opportunity to speed things along with the use of these tools—but asymmetry will result in more stubborn responses. The argument “Well, Claude told me I should get this,” is something a GC will need to be prepared to explain.

Business owners and operators looking to cut expenses are going to rely more and more on LLMs. And let’s face it, legal services are typically viewed as a cost center, even though we are accretive to the overall success of a business value. The savvier business owners and operators will recognize the value of a skilled GC even though they will want things done in a faster and more streamlined manner. A GC will have to be able to explain to both the business owners and operators and to the other side the value they bring to the table and how, even when using the tools, the GC relevant to the legal process. So, while these new AI Tools may accelerate delivery of services from a skilled, wise in-house attorney, those tools can also cause complications.

Further, it should be noted that there is a serious risk to research being conducted through AI tools (or search engines) by non-attorneys, as the information may not be protected by attorney client privilege or the attorney work product doctrines.

Before making any legal choices using AI, consult a business law attorney to ensure that your decisions are compliant and ethical, helping you avoid putting yourself or your business in murky waters. For more information, please do not hesitate to reach out to Jeff Cassin at jcassin@norris-law.com.

About the Author- Biz Law Blog

Jeff Cassin is a business attorney, concentrating his practice in the areas of mergers and acquisitions (M&A), investment transactions, corporate law, and business contracts. Jeff serves as outside general counsel to companies without an internal GC or supports internal GCs with specialist needs. Jeff represents middle-market, mid-size businesses, funds, start-ups, media and technology companies, and individual investors, among others. He counsels clients concerning complex middle-market M&A transactions, deal negotiations, and management decisions, and has served as primary attorney on dozens of sell-side and buy-side transactions across industries.