Artificial Lawyer caught up with Cian O’Sullivan, founder of Beagle, the automated contract analysis system that is just celebrating a year and a half of operations and landing VW as a client.
We discussed how Beagle came about, why maybe sometimes it’s better not to talk to lawyers about AI and how come the company has one of the world’s largest auto companies as a client, and then some.
Cian O’Sullivan’s web camera is not working when Artificial Lawyer calls for a video conference and so is treated to a picture of a soccer pitch in Colombia that the legal tech company founder took on his travels.
The international reference makes sense once you start to talk to O’Sullivan. The Canadian travels a lot. He went to law school in Ireland and studied for the New York Bar exam while he was staying in Bermuda.
As his start-up legal tech company, Beagle.ai, grows so it seems the need to travel around the world also increases. In fact, the eight-person technology company from Kitchener, Ontario, a town of around 220,000 about 100 miles from Toronto, has scored big recently.
The company has recently landed the procurement function of VW in Germany as a client, working with them to provide the Beagle contract analysis system via the procurement function to all parts of the company, which includes Lamborghini.
If that wasn’t enough the company is also working with publishing giant Thomson Reuters on a pilot to use Beagle’s software, potentially to then ‘white label’ it so that the company can distribute it to its own clients.
There are also talks ongoing with a number of international banks and multinationals in the US and Asia. Not bad for a company that’s only been in full operation since around the start of 2015.
In fact, O’Sullivan notes that after the interview he has to head off to Australia to meet with leading law firm, Corrs, with whom they are also working on a project.
Yet, despite the big names, a significant chunk of the client base are small businesses and even solo lawyers.
‘We have one client who is a solo lawyer in Florida. He uses Beagle’s software to analyse his clients’ contracts. We charge him $1,000 a year and he charges his clients $500 for each contract review,’ O’Sullivan says.
He adds that the company now has around 45 active clients around the world, ranging from the smallest to the huge, spread across 19 countries. In several cases the client looked Beagle up, not the other way around. The VW work was won after the German car giant tasked a group of executives with finding a company to provide software to help manage their contracts and it was they who found Beagle, out in Kitchener.
O’Sullivan acknowledges that the diverse client list may seem a little unusual. But he explains that as a young company they have been keen to test their concept and to see how smaller clients made use of the software.
The Origin Story
O’Sullivan made a lot of effort studying the law, but soon realised he didn’t want to be a lawyer. Like many people in the legal tech world he has now become a ‘recovering lawyer’.
The seminal moment came when he was asked to review a 90-page pitch document on a Friday while working at a local tech company in Canada. What started out as a ‘quick look’ soon turned into the prospect of another lost weekend spent reading, ruminating and trying to build an overall picture of what the many clauses and contractual demands of the document might mean when taken together.
There had to be a better and faster way of understanding this document and all of the key pieces of information buried inside of it, he thought.
O’Sullivan decided that one of the main issues for the company concerned financial issues. So he would write a program to hunt out any reference to financial matters, for example any mention of a currency, or any type of transaction.
The key financial data was then extracted, placed in an Excel spreadsheet and shown to his friend at the company. They were soon able to analyse the financial aspects of the proposal very easily and went on to win the pitch, even though they were a smaller company than many of the other pitchers.
‘We won because we understood the document better than the others,’ says O’Sullivan and so the idea of Beagle was born: a system that would crunch a contract into its key clauses and meanings, visible and easy to understand for anyone, whether lawyer or non-lawyer, who wanted to see what it all meant.
O’Sullivan soon found there was a market for this capability. And it was a market that was only just starting to realise what could be done with this new wave of legal tech.
To AI, or Not AI? That is the Question
O’Sullivan takes pains to explain the value of the Beagle document analysis system. It is using a cognitive capability that is on the same spectrum of AI that other advanced legal tech companies operate on. Its software reads documents, it analyses clauses, it looks for links between information. The software also is primed to learn from the user what they are looking for, i.e. there is a degree of machine learning and probabilistic inference.
Like other cognitive systems is it very fast and it provides a visual presentation of its findings. But there are some key differences.
What is perhaps different about Beagle is that the focal point of the work is not thousands of documents that are to be examined for one particular case, but rather helping a company examine certain types of document over a long time period.
The idea is that Beagle is there to assist someone, for example a VP in a company, to sift through the contractual documents that are part of their job, but which as non-lawyers they are not necessarily keen to examine, or want to spend too much time on.
Although the VP may not be a legal specialist, they know enough about their legal obligations and company policies to realise it would be a very bad idea to just skim the 100-page procurement contract sitting on their desk before they agree to a deal with a supplier, for example.
But, equally, they don’t necessarily want to bring in legal straight away and bog down the process unless it is really necessary. Also, some smaller companies may not even have a legal team and they may not wish to use an external lawyer just for a single document review.
Beagle fills the gap. In effect, the VP can use the software as a compliance tool, training the software to look for issues set out in the company’s policies. If they are worried about a certain clause they also can bring in all those involved, even third parties via the system’s collaborative interface. Together they can consider what to change and then update the clause.
In short, contracts cease to be a ‘bottleneck’ that slow down corporate activity, but equally they are not brushed aside. They get analysed and issues are dealt with, just more quickly.
For O’Sullivan the real benefit of the software is not so much the cognitive/AI ability, but the way a ‘narrative’ around the contract can develop.
‘Contracts are usually asynchronous. They are not linked to the people who are involved in them. You get people modifying the wrong versions. Things go out of sync,’ O’Sullivan explains.
In fact, the narrative aspect is so central that instead of calling it an AI system, the company now prefers to call it: Technology Assisted Narrative Review or TANR.
O’Sullivan says he doesn’t even like using the term AI anymore, to the point where they are now going to erase the term from all their marketing material. (Although they still have the problem of finding a new URL, as it currently is Beagle.ai.)
The move is also because he has found many people still get confused by the AI term. O’Sullivan adds that even using the term ‘system’ is a barrier as ‘it looks like yet another thing that the business will have to manage’.
The aim instead is to create an easy to use interface that one key person in the company can manage and ‘own’, through which any key contract can be processed and examined. Contracts get read, even by non-lawyers and not skimmed; key clauses are identified and quickly get updated; everyone stays up to date with the right version of the contract.
Legal Tech: A Final Word
Like many others exploring the horizons of advanced legal tech, O’Sullivan has come to develop a new perspective on the legal sector he once worked so hard to be part of, namely a huge frustration at many lawyers’ resistance to technology.
He says that one reason for initially focusing Beagle on helping small businesses was that he didn’t feel law firms would even want his software, though now of course that has changed.
‘Selling tech to lawyers is like selling tech to the church,’ O’Sullivan notes wryly.
Then, more seriously, he points out that ABA research found that 93% of SME businesses don’t use lawyers to review their contracts. The key reason is cost. That seems like a tragic failure of the legal sector, to not be able to serve so many potential clients that need help.
‘Lawyers have a monopoly on this kind of work, but they still cannot address this massive need from small businesses, which constitute the vast majority of all businesses in the country,’ O’Sullivan explains. ‘They only serve 7% of SMEs. That has got to change.’
Then, with considerable feeling, O’Sullivan concludes: ‘I’d say to the lawyers: your fear of tech is preventing change.’
It would seem the message to private practice lawyers who resist tech adoption is stark: start to embrace advanced legal tech or simply watch as clients adopt it directly from vendors such as Beagle.