Luminance is preparing to launch a fully automated contract negotiation tool called Luminance Autopilot. The company plans to start beta testing with selected customers in the next month, with a wider roll-out in the new year, reports BBC.
The demo
On the desk in front of me are two laptops. The one on the left, for this demo, belongs to Luminance general counsel Harry Borovick. The one on the right represents Connagh McCormick, general counsel at Prosapient, a (genuine) Luminance customer. On the back wall behind the laptops is a large screen, showing an audit trail of the changes each party makes to the contract.
The computers are going to use Autopilot to negotiate a non-disclosure agreement that’s acceptable to both parties. Non-disclosure agreements (NDAs) set out the terms under which one organization will share its confidential information with another.
The demo begins. Mr Borovick’s machine receives an email with the NDA attached, so it opens it in Microsoft Word. Autopilot rapidly reviews the contract and starts to make changes. A six-year term is unacceptable, so it’s changed to three years. The governing law for the contract was changed from Russia to England and Wales.
The next risky clause imposes an unlimited liability, meaning there’s no ceiling on how much Luminance might have to pay if the terms of the NDA were breached. “This is a showstopper for Harry’s business,” says Ms Glucina.
“So, the software’s proposed a liability cap of £1m instead. It also softened the clause. The other party had inserted some wording around ‘holding harmless’, which means that they would be absolved of any legal liability in certain situations. But the AI knew that wasn’t okay and so it protected Harry from that risk by removing the clause.”
Mr Borovick’s computer emails the amended NDA back automatically and it opens on McCormick’s machine. His AI notices the “hold harmless” language has gone and inserts a liquidated damages provision. That effectively turns the £1m maximum liability into an agreed compensation to pay if the agreement is broken.
Mr Borovick’s AI strikes that out when it receives the updated contract and inserts language so his firm is only liable for direct losses incurred. Version four of the contract is acceptable to both parties. Mr. McCormick’s AI accepts all the changes and sends them to DocuSign, an online service for signing contracts.
Reducing the delay
The entire process has taken just a few minutes. “The idea is to reduce the delays that are often caused by people just not getting to something in their inbox, or being super busy on another task,” says Ms Glucina.
Autopilot is an evolution of Luminance’s copilot tool, which color-codes clauses for legal professionals as they review a contract in Word. Acceptable clauses are green, unacceptable clauses are red, and non-standard clauses are amber. The tool can also redraft clauses using AI, based on its knowledge of what the firm has agreed in the past.
Although other companies including Lexcheck, Genie AI, and Thoughtriver offer contract review technologies, Luminance is the first to announce an autopilot.
The Luminance system is built on a large language model (LLM), which is also the foundation of the popular text generation tool ChatGPT. The major difference is that Luminance’s tools have been trained using more than 150 million legal documents, instead of public internet content.
