Israeli AI software whips expert lawyers in contract analysis

Technology developed by LawGeex had a 94% accuracy rate vs 85% for experienced lawyers, multinational study shows

Screenshot of the cover page of the LawGeex study (Courtesy)
Screenshot of the cover page of the LawGeex study (Courtesy)

Artificial intelligence software developed by an Israeli startup has proved in an international study to be quicker and more accurate at analyzing legal documents than experienced lawyers.

The software developed by Tel Aviv based LawGeex was able to analyze nondisclosure agreements with more accuracy and speed than 20 experienced lawyers, the results of a collaborative study between leading US institutions and the company show.

As part of the study the researchers compared the work of the experienced lawyers, some with decades of contract experience, to LawGeex’s AI software program, and found that the software was able to achieve nearly 10 percent higher accuracy and complete the task in significantly less time.

This study marks the first time that AI technology has been tested with a typical task, such as reviewing a nondisclosure agreement, undertaken by lawyers on a daily basis, the company said in a statement.

Screenshot of the LawGeex’s document analysis interface (Courtesy)

Both the lawyers and LawGeex’s AI software were given five previously unseen contracts, which contained 153 paragraphs of technical legal language that were modeled after common nondisclosure agreements.

The software was able to achieve 94 percent accuracy in 26 seconds compared to the lawyers, who performed at an average of 85% accuracy and took approximately 92 minutes to complete the same task.

The best-performing lawyer in the study got a 94% accuracy ranking — matching the AI software — while the worst-performing lawyer achieved an average 67% accuracy.

Gillian Hadfield, Professor of Law and Economics at the University of Southern California (Courtesy)

The research shows that AI-based technologies can help make contract management faster and more reliable and free up time and money spent on daily legal tasks, said Gillian Hadfield, professor of Law and Economics at the University of Southern California, who is one of the three academics who worked on the study.

One of the things that makes LawGeex’s AI-based technology unique and more useful than other existing products is that the software is specifically designed to interpret technical legal language rather than words used in everyday speech, said Noory Bechor, CEO and co-founder of LawGeex, in an interview.

LawGeex’s software trains the computer to understand legal contracts by giving it hundreds of thousands of samples to review, and breaks the contract down into separate legal sections to teach the computer how to understand the meaning of the text in many different parts. The software is also trained to draw attention to possible problems or red flags and allow legal teams to address issues promptly, the company says.

The study, a collaboration between US-based academic institutions Duke University School of Law and the University of Southern California, was overseen and administered by independent lawyer Christopher Ray and independent consultants from Stanford University’s School of Law and the Department of Computer Science at Bar Ilan University.

report by US-based consulting firm McKinsey found that nearly 22% of a lawyer’s work and 35% of a law clerk’s can be automated using AI-based technologies. Daily tasks such as reviewing and drafting contracts and basic legal research are moving away from legal professionals because software programs like LegalGeex are cheaper and faster, experts say.

Bechor, formerly an international business lawyer who worked with Israeli venture capital firms and multinationals, found that one of the problems with legal research and contract review is that they are monotonous and labor-intensive tasks.

Noory Bechor, CEO, and co-founder of LawGeex (Courtesy)

Legal departments in firms and corporations review thousands of contracts every month to determine whether to sign them or not and until now the work was done manually, taking weeks or even months, said Bechor.

However, software programs like that of LegalGeeks can reduce the turnaround time from weeks and months to a matter of hours, saving law firms up to 80 percent of the costs of performing such tasks, Bechor said.

In 2017, investment from venture capital firms in AI-based technology in the legal industry increased a whopping 43 percent compared with the year prior, according to New York data company CB Insights, indicating that the trend toward using artificial intelligence-based technologies in the legal industry is growing faster than ever.

Addressing concerns that AI will impact the availability of jobs for paralegals and junior level associates in law firms, Bechor said that legal professionals will need to adapt to these new technologies.

“I don’t see paralegals or lawyers losing their jobs very soon, but the type of work they are doing is going to change, and they need to adapt.  The ones who can understand how to use these technologies can be much more strategic and will thrive in the upcoming years,” Bechor said.

Founded in 2014 by Noory Bechor and Ilan Admon, LawGeex has raised $9.5 million in series A funding to date according to Crunchbase.

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