Artificial Lawyer recently caught up with Berlin-based Synergist, a legal tech start-up pioneering a semi-automated way to negotiate contracts and handle dispute mediation that could potentially have a huge impact.
The founders of Synergist are Ed Taylor, Mladen Stific and Nicholas Bollen. The idea came together about two years ago and the business started in earnest about one year ago.
They’ve already come a long way and have a working interface that allows a person, initially without legal input, to customise a contract based on templates and invite the counterparty to then negotiate the terms via this collaborative interface.
A bot is also present and represents the licensee of the software in the contract negotiation, offering prompts and leading the way through the process to completion and signature. It can automate responses and counteroffers, acting kind of like a junior sales agent.
One really needs to have a go on Synergist’s interface to do it justice, but to put it into words, it’s a bit like playing a real time strategy game on a PC, where you are setting up your next move and there are several sliders where you can modify criteria, though in this case it’s things like selling price, or termination conditions, or even setting service levels.
The system can be pre-set by a company’s lawyers to only allow the user to operate within certain parameters that meet the inhouse playbook for contracts and/or that meet local regulations. The individual using the interface then sets up the parameters relevant to their contract and these are seen by the counterparty.
Now, this is where the fun begins. As in most negotiations, the counterparty may not agree to what is demanded. Using the collaborative and interactive interface of Synergist the two parties can go back and forth in real time, setting out where there is wiggle room and where there are red lines.
This enables the contract to be finalised quickly, because A) the system provides the users with pre-sets that are expected in each type of contract, B) everything taking place is collaborative and transparent, working from a shared platform so there is no confusion over terms or approach, and C) because it can be done in real time there is no need for phone calls, letters and emails to ping back and forth just to confirm a particular item in the contract’s terms. I.e. the two parties can just get on and make the deal.
If the users do find they have hit a brick wall, or there is an unexpected issue, inhouse lawyers can be called in to collaborate with the process. And because everything is digital, there is a complete history of all the decisions and steps the two parties took to get to the impasse.
And, if things later lead to a dispute, Synergist has also created a semi-automated mediation service that acts as a middleman to help the two parties reach an ‘equilibrium’ as game theorists call it, or, in normal-speak, a compromise. A bot is also used to achieve this and the software seeks out optimum ways to bring the disagreement to a close.
These mediations can be ‘weighted’ to be legally binding, which further speeds up the conclusion of the dispute, it also makes any offers of compromise from either side more credible and helps to build trust.
In short, the aim is to turn a laborious and complex process into something ordered, fast and effective, with a rapid response to disputes added for good measure. In effect, once a company’s inhouse team has set the playbook for each type of contractual playbook, staff are then at liberty to negotiate and make business decisions as they wish.
In turn this speed and simplicity moves the business along. After all, one could say that a business is just a series of decisions, and if those decisions take a long time then the business slows to a crawl as well.
Artificial Lawyer hopes that has done justice to what Synergist has created, but there is a lot more to it, with plenty of other tools on offer to help ease contract creation. That is also a lot to take in all in one sitting, and as mentioned, if you want to really get to grips with this it’s recommended you try it out (you can do a live demo from here.)
But, let’s now hear from two of the founders, Taylor the CEO and Stific the CTO.
One additional benefit Taylor sees in using Synergist is that because the entire process is digital the data of the negotiation is never lost.
‘Synergist provides a timeline to clients showing them how they got to the final contract and that can be used for analytics,’ he says.
At first collecting data on negotiations may seem a bit dry as a subject, until one considers what it could tell a company about the issues it faces. It could provide insight on an array of market pressures from pricing issues to changes in attitude among counterparties. It will also show data by counterparty and that could be divided up further, to give a detailed picture of how certain parties are responding. Or it could show emerging patterns of risk in relation to certain client types.
The data also provides a company with insight into itself, for example showing where certain teams are agreeing too lenient terms, or others where hard-charging executives are always triggering disputes with other parties.
‘Companies do not collect data from their negotiations [as it is done verbally or the communications are not logged]. So, it’s all a black box for them, yet collecting data really helps,’ explains Taylor.
Another benefit is the reduction in the need for lawyers. As Taylor says: ‘The lawyers in the corporate make the playbook for the contracts and if these are well defined then people in the company only need lawyers if something is very non-standard.’
This in turn allows the inhouse lawyers to focus on more important tasks, such as some major internal crisis involving the board, rather than having to worry about what the sales team is agreeing to on a daily basis.
Taylor adds that although the system is not totally automated the scope for automation is great.
‘In a standard supply agreement around 95% of the terms are standard for both parties. Only 5% needs to be negotiated. That means Synergist can crunch through this contract very fast,’ Taylor notes.
Meanwhile, Stific the CTO notes that when it comes to the world of legal contracts AI and automation companies have only just started to nibble at what can be achieved.
‘It’s a whole ecosystem and it’s largely undeveloped,’ he says. ‘There is lots of cake.’
He also notes that to some degree they could become competitors to the AI document review companies such as Seal, RAVN and Kira, whose core technology is around reading unstructured data in ‘paper’ contracts using natural language processing (NLP).
Stific sees a world where there is no need for the NLP capability because the contracts will all have been designed using Synergist or similar systems.
‘All companies have depositories of old contracts [written in the traditional way], but if you have contracts made with Synergist you don’t need NLP,’ Stific states.
And this could be right, although it will likely be many years before all the world’s major companies stop making use of manually constructed contracts and move into a fully digital model.
And for the future? Taylor says the plan is to make the bots they use more powerful and able to do more, especially in areas such as mediating disputes. In fact, one especially radical idea would see both parties effectively hand over the ‘DNA’ of their past behaviours and redlines to Synergist, and the bot would use algorithms to reach the most balanced outcome that met both parties’ conditions and matched their previous patterns of behaviour.
That is to say, rather than trying to impose externally what ‘ought to be the right solution’, the system considers the sometimes unknown biases of each party, which will have been made apparent by analysing their past behaviour when using Synergist, and moderates between the two parties’ biases to reach an answer.
This sounds like Synergist may have developed a new means of dispute resolution in addition to what else they’ve done so far. At this point Artificial Lawyer joked that they should try and help with the EU/Brexit talks, given both sides’ intransigence on key issues. Maybe their mediation bot can help?
This raised a chuckle from Stific and Taylor because that is exactly the kind of problem they would love to see their technology applied to.
And one final radical idea from the Synergist team is this: making standard contract playbooks into an open source library where anyone can download and use them for free.
Stific says that he’d like to see standard ways to express commitments in legal terms ‘de-monetised’ to allow greater access to justice, rather as Wikipedia has made a huge swathe of the world’s knowledge open to all for free.
There is some serious logic behind this desire for transparency and sharing of contract knowledge, namely how can we expect different parties to reach good agreements for the betterment of society when there is such an inequality in contract knowledge? And, when contracts are agreed behind closed doors there is also more room for corruption, Stific adds.
He states that one reason for his passion for Synergist and the way it provides clarity and transparency is that where he grew up there was too much corruption and much of it was because every deal was made in a very unstructured environment.
Stific’s argument is that if you have a more structured and transparent environment for making deals then corruption has no place to hide. In which case Synergist is not just saving companies time and money, it could one day actually help change the business culture of entire countries.
And on that bombshell, we end the interview. What started out as a walkthrough of a new system to help people negotiate contracts has ended up with plans to change the world. But, perhaps that is what all great innovators are trying to do.
So, the best of luck to Synergist, because the inefficient world of contract negotiation certainly needs changing. We look forward to hearing more from you soon.