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Why Are Contracts So Hard to Read? A Legal Technologist Responds – Artificial Lawyer



Contracts are hard to read, not because the ideas within them are too complicated to understand, but because of the way lawyers write them, scientists at MIT have stated – see recent story. But why is this and is there a solution? Matt Goff, Head of Digital Services at Ashurst Advance Digital, explores the key reasons and considers some solutions.

Legal documents such as contracts and online service agreements are often said to be complex, hard to read and very technical, and often do not contain a universal standard of plain English clauses nor terms. So why hasn’t this changed?

Tailoring to the sector:

Some practice areas use complex language to match the client’s business terminology, which can be equally opaque; complex banking documents naturally go hand in hand with complicated terms and concepts. 

Risk:

Managing risk doesn’t excuse legal jargon or hard-to-understand concepts; however, we live in a litigious environment, and lawyers need to know that a contract provides their client with ironclad coverage and standard terminology that leaves no room for doubt, no matter how obscure. Once standards are established, there is a reluctance to change. 

Standardisation is good, but it can be the enemy:

When standard sector terms, clauses and principles are established, they act like a dictionary and are incorporated into standard templates. Each firm has its own models. 

Non-standard challenges:

Another challenge is that lawyers create variations of a theme, reusing a previous document, and then tweaking it for each new matter. Also, lawyers sometimes have to use clients’ standard templates, which requires lawyers to conform with a firm standard or best practice, or amend their clauses to ensure they are legally sound.  

Digital:

The main challenge is that lawyers still have some analogue instincts.

Legal documents do not provide structured data as standard. Clients should be able to understand the impact of their documents in a binary way. Rarely are documents provided in a digital service wrapper which allows the client to take that data with them; this locks documents away and makes assessing the risk and effect of the documents over time more difficult. Access to data would be handy when needing to repaper documents.

Consumers and T&Cs:

Services and products have become much more sophisticated, and so have the legal contracts they come with. Within consumer online T&Cs, businesses deal with many issues, including data protection, privacy, and service contracts. Technology has outpaced consumer knowledge, so user service agreements are crammed with both technical and legal jargon that few consumers can understand

What legal tech tools are there for drafting legal documents?

Microsoft Word is still the primary tool for drafting legal documents. Thankfully, lawyers can easily collaborate on documents via Teams, which has quickly become a popular tool amongst law firms and clients. It is excellent for working together on DD reports. The Microsoft stack is also one to watch; the Power App/Power Automate Microsoft tools offer a compelling proposition. 

More AI legal tech providers are building Word add-ins. In particular, where lawyers are drafting using clients’ standard documents, tools which auto-suggests clause replacements from the library are beneficial. These tools can be helpful when updating documents to a new, less legalese-filled standard, as it will always suggest the new improved clause.

In fixing your documents/clauses for legalese, AI tools like Kira AI are also helpful for businesses to establish a range of clauses, allowing the lawyer to pick the clearest and most appropriate replacement clause. Running documents through the system can quickly provide an overview of all clauses used and help establish the firm’s gold standard clause. 

Combining document automation with online collaboration platforms and AI tools is a powerful solution for many automated drafting scenarios. Document repapering is one such scenario. The blend of tech can also integrate with the people part of the process, by ensuring work is allocated to the right people or providing access to playbooks. 

What legal tech could learn from other services, and how AI can make the law more accessible in future.

In general, businesses are outpacing legal in their digital journeys: 

As businesses move to a more digitally enabled environment, the legal sector will need to adapt to keep up. Ashurst is approaching the challenge of legalese through a legal advice writing course and standards, which includes legal contracts and other documents. This initiative has been guided by industry experts, including linguists and design experts, to ensure clients get clear and concise information tailored to their needs. 

Some of the challenges users of legal documents complain about can be addressed using the principles of design thinking and service design. Before implementing automation, it is essential to rethink the re-design process; this might mean a change of mindset regarding where automation is possible and a radical approach to specific contracts.

Let’s make the documents easier to consume via automation. That could even involve a fully automated contract, with a data visualisation page, and a page with key icons indicating what the contract covers and the impact.

Let’s embrace digitisation and allow clients to access live documents and data within platforms and own their data and take it with them – providing the associated knowledge linked to matters via document code or reference. 

With Legal 2.0 (or whatever we call it), clients drive industry-wide standardisation, or defined category type, with a precise equivalence. The parallels here are with open banking. We are already seeing standardisation happening in banking with initiatives such as DCM FLOW. Clients will establish their exact needs and own their data with a law firm directly connecting to and augmenting their data as matters progress.

This structure will remove the dark data problem and the potential need for AI contract review tools as they stand. A quick scan of the document and data which match a required model is more appropriate. Legal knowledge could become modular with AI models created by lawyers and legal technologists to plug into their tech stack or data warehouses. 

In the legal sector, there is a need to look at knowledge graphs and other AI and semantic technology to push the envelope in more automated assessments and outcomes. The legal market has moved away from looking at just legal tech, and eyes are on the big tech firms to see what they can offer. 

The Consumer Market

It’s a more significant challenge than easy-to-read contracts:

As an interim solution to these challenges, we could turn to broader AI solutions. Governments should consider investing in this technology to support citizens navigating complex legal issues Establishing this technology would encourage the democratisation of access to legal services and make the legal system more affordable

It’s a bigger issue than syntax and jargon

Technology and its impacts are becoming too complex for the average user to understand, and the broader explanations don’t help the consumer understand the positives and negatives. At the basic level, the average consumer doesn’t understand the implications of cookies. And even if they do understand the impact of data laws, some businesses do not comply.  

We need to establish a digital trust mark, which shows that a business is fully compliant with regulations, laws in general, and especially users’ rights to control their data and make it easy to manage centrally across all platforms. It seems that the best approach is for citizens to own and control their data in a central location and revoke access accordingly. 

[ This is an educational guest post for Artificial Lawyer by Matt Goff at Ashurst Advance Digital, which is within international law firm Ashurst. ]





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