Sentiment Analysis

Can AI Replace Your Lawyer?

Everyone loves lawyer jokes, even some lawyers.

• Why don’t sharks attack lawyers? Professional courtesy.

• What’s the difference between a lawyer and a herd of buffalo? The lawyer charges more.

• What’s the difference between a lawyer and a vulture? Vultures wait until you’re dead to rip your heart out.

I have dealt with many lawyers; some have been great, while others have not. I suppose the same goes for home repair professionals, mechanics, and virtually every other profession.

But I think lawyers are a special breed. Their contracts use confusing Latin words that haven’t been modernized to plain language. And they are expensive.

For example, I recently received a LinkedIn request from a lawyer. His LinkedIn title was CEO, Adviser, Investor, Restaurateur, Lawyer, and Founder of <Redacted > Law Group: High-Tech, Low-Cost Day-To-Day Legal. He is currently offering me his services for the very low billable rate of $515/hr.

I almost jumped through my screen to grab that deal. I was excited by the prospect of getting legal advice and a good meal. 😂

But seriously, I think there’s a time for using a lawyer and getting your ducks in a row to ensure you most efficiently use the time you are paying for. That’s my strategic advice regarding using AI in legal matters.

I see the value in using artificial intelligence to help streamline processes like contract review, compliance monitoring, and legal research. AI tools can efficiently analyze vast amounts of legal data, identify risks, and provide actionable insights, significantly reducing the time and cost associated with the legal review of these tasks.

However, while AI effectively handles routine legal tasks, it is not a replacement for human judgment in complex legal matters. In this week’s feature, I’ll explore how I use ChatGPT to help AI with legal tasks in business and when to get a legal professional.

AI Efficiency Edge - Quick Tips for Big Gains

Using ChatGPT for Gap Analysis and Contract Negotiations

ChatGPT can enhance your contract negotiation strategy by automating gap analysis, suggesting negotiation points, and providing real-time support, all tailored to your specific requirements.

Remember that if you have privacy considerations, you may risk breaching confidentiality by doing so, so use caution and understand how AI usage affects confidentiality.

1. Extract Key Contract Terms
   Upload or input your contract text into ChatGPT( Use prompts like "Extract key terms and clauses related to payment terms, confidentiality, liability, and deliverables." ChatGPT will summarize these sections, allowing you to identify critical elements quickly without manual review.

2. Identify Gaps and Risks
   Input a prompt such as "Compare these contract terms against industry standards for SaaS agreements" or "Highlight any clauses missing compared to our standard contract template." ChatGPT will identify discrepancies and potential risks, such as missing indemnity clauses or unfavorable payment terms, giving you a targeted list of negotiation areas.

3. Generate Negotiation Points
   Use a specific prompt: "Based on these gaps, suggest alternative clauses to strengthen our position," or "Provide language to propose a longer warranty period." ChatGPT will draft revised clauses or new terms, offering you concrete suggestions to bring to the negotiation table.

4. Simulate Negotiation Scenarios
   Ask ChatGPT, "Simulate a negotiation scenario where the counterparty rejects our proposed liability cap increase." ChatGPT can role-play as the opposing party, helping you anticipate responses and develop counterarguments or compromise strategies.

5. Provide Real-Time Assistance
   During live negotiations, keep ChatGPT open with prompts like "What counterargument can I use if they push back on our payment terms?" or "Suggest a compromise if they refuse to agree to our indemnity clause." ChatGPT can offer instant advice tailored to the conversation’s flow, keeping you agile and prepared.

Using ChatGPT for these steps, you streamline the negotiation process, assist in reducing legal and financial risks, and ensure you are well-prepared for every possible outcome, leading to more favorable contract terms.

Enterprise AI Essentials - Your Weekly Deep Dive

AI for Free Legal Assistance

You may have seen this New York Times article earlier this year, a lawyer representing a man who sued an airline relied on artificial intelligence to help prepare a court filing.

The lawsuit began like many others: Roberto Mata sued the airline Avianca, claiming he was injured when a metal serving cart struck his knee during a flight to Kennedy International Airport in New York. When Avianca sought to dismiss the case, Mr. Mata’s lawyers strongly objected, submitting a 10-page brief citing over six relevant court decisions, including Martinez v. Delta Air Lines, Zicherman v. Korean Air Lines, and Varghese v. China Southern Airlines, which discussed federal law and the tolling effect of an automatic stay on the statute of limitations.

However, there was a significant problem: neither the airline's lawyers nor the judge could locate the cited decisions or quotations from the brief.

It did not go well for the lawyer. The AI made up those cases, and the lawyer didn’t check the sources, which should be required in such a situation. AI can help with research in many cases, but we must provide human-in-the-loop oversight. That’s especially true for legal issues. AI has become increasingly helpful in addressing various legal issues, offering significant benefits and limitations.

Here’s an overview of how AI can help provide legal assistance.

Ways AI Can Help with Legal Issues

Here's an analysis of how AI can help with legal matters, discussing both practical applications and areas where it falls short:

1. Legal Research: AI can significantly enhance legal research by:

• Quickly scanning vast databases of case law, statutes, and legal documents

• Identifying relevant precedents and legal arguments

• Summarizing critical points from lengthy legal texts

This capability saves lawyers considerable time and can improve the thoroughness of research. For example, tools like Westlaw Edge (a Thomson Reuters product) use AI to provide more comprehensive and faster legal research results.

2. Document Review and Analysis

Have you ever seen those movies where the big company buries the underdog in truckloads of documents, trying to bury them with unnecessary work and hide the smoking gun? Providing the data is digitizable; AI can process vast amounts of data more quickly and accurately than human reviewers. Even if AI only serves as a second set of eyes, it’s very efficient. 

• Reviewing contracts and other legal documents for errors or inconsistencies

• Identifying potential risks or areas of concern in legal agreements

• Extracting essential information from large volumes of documents during discovery

4. Automated Document Generation

This capability can significantly reduce the time spent on routine document creation, allowing lawyers to focus on more complex aspects of their work.

• Draft standard legal documents like contracts or NDAs

• Customize templates based on specific inputs

• Generate initial drafts of more complex legal documents

Ways AI is Limited or Inappropriate for Legal Issues:

1. Complex Legal Reasoning

AI cannot currently:

• Fully understand nuanced legal concepts

• Apply legal principles to novel situations

• Engage in creative legal argumentation

These limitations mean that AI cannot replace the critical thinking and judgment of experienced attorneys in complex cases.

2. Ethical Decision-Making

AI is not equipped to:

• Navigate complex ethical dilemmas in legal practice

• Understand the full context of sensitive client matters

• Make judgment calls on conflicts of interest

Ethical considerations require human oversight and cannot be fully delegated to AI systems.

3. Client Counseling and Empathy

The human element of legal practice, particularly in areas like family law or criminal defense, remains crucial and cannot be replicated by AI, where empathy and context are critical.

• Providing emotional support to clients

• Understanding the personal context of legal issues

• Building trust and rapport with clients

4. Courtroom Advocacy

AI is not capable of:

• Presenting oral arguments in court

• Responding to unexpected developments during trials

• Reading and reacting to judges and juries

The dynamic nature of courtroom proceedings requires human intuition and adaptability that AI cannot match.

5. Interpreting Ambiguous Laws

These situations require human judgment and the ability to navigate uncertainty, which AI systems lack.

• Interpreting vague or newly enacted laws

• Applying legal principles to unprecedented situations

• Balancing competing legal interests in complex cases

While AI offers significant benefits in research, document review, and routine task automation, it does not replace human legal expertise. The most effective use of AI in law is as a tool to augment and enhance the work of legal professionals, allowing them to focus on higher-level tasks that require human judgment, creativity, and empathy. As the technology evolves, legal practitioners must stay informed about AI's capabilities and limitations so that they can use it responsibly and effectively.

AI Toolbox - Latest AI Tools and Services I am Evaluating

• LegalZoom - Offers legal solutions for small businesses and individuals, including a free DocAssist service that uses AI for document summarization.

• Rocket Lawyer - Provides online legal services with AI assistance for various business needs.

• DoNotPay - An AI-powered app for handling legal issues such as generating documents, filing complaints, canceling memberships, and contesting fines.

• Lawgeex - Aimed at legal professionals but valuable for businesses in contract review.

Promptapalooza - AI Prompts for Increased Productivity

Contract Legal Review

As mentioned above, you can use AI to help review documents before consulting a lawyer. Where AI shines is helping you review and consider the terms of an agreement. I use this prompt to evaluate and look for gotchas for my business.

How To Use This Prompt

Cut and paste this prompt into ChatGPT, and attach the contract you want to review to the prompt. You can then get the initial review and ask questions. I wouldn’t ask about specific laws because that is where we see hallucinations, but I would ask about legal concepts and terms. You may want to add the venue of law, but this makes a confusing contract easier to digest. At the end of your review, consult a lawyer if need be, but you’ll be in better shape to ask the questions you need of them.

# Role 
As a Legal Analyst specializing in contract law

# Objective 
your objective is to perform a comprehensive review of a legal contract to ensure it aligns with best practices and protects the interests of the client. Focus on identifying any potential risks, ambiguities, or areas where the contract could be improved. Pay particular attention to the following key considerations:

# Considerations for Review

Apply all the following considerations for the contract where applicable. 

- Scope of Work (SOW)

Ensure that the SOW is clearly defined, including all deliverables, timelines, and expectations.
Identify any work explicitly excluded from the contract to avoid scope creep.

- Payment Terms

Review the payment schedule and check if the milestones align with typical cash flow needs.
Verify the net payment terms (e.g., Net 30, Net 60) and assess their impact on financial planning.
Confirm the currency in which payments will be made.
Evaluate the fairness of any penalties for late payments.

- Confidentiality and Non-Disclosure:

Ensure the confidentiality obligations are clearly defined and reasonable in scope.
Review the duration of the confidentiality obligations to confirm they are not excessive.

- Intellectual Property (IP):

Determine who retains ownership of the IP created under the contract.
Review the terms of any licenses, including scope, duration, and exclusivity.
Consider the rights to use the IP after the contract ends.

- Termination Clauses:

Analyze whether either party can terminate the contract for convenience and the terms for such termination.
Understand the grounds for termination for cause and assess their reasonableness.
Verify the notice period required for termination and ensure it is fair.

- Liability and Indemnity

Check for any caps on liability and assess their reasonableness.
Review who is responsible for indemnifying whom and under what circumstances.
Identify any exclusions to liability and indemnity to ensure they are fair.
Dispute Resolution:

Verify the legal jurisdiction that will govern any disputes.
Determine whether disputes will be resolved through arbitration or litigation and under what conditions.
Review whether mediation is required before proceeding to arbitration or litigation.
Warranties and Representations:

Ensure that any warranties are clearly defined and reasonable in scope.
Review the duration of any warranties and assess if they are adequate.
Understand the remedies available in the event of a breach of warranty.

- Force Majeure

Check the definition of force majeure to ensure it covers events beyond the control of both parties.
Understand how a force majeure event will impact the obligations of both parties.
Review the duration after which a force majeure event allows for contract termination.

- Change Control

Ensure there is a clear process for making changes to the contract.
Identify who needs to approve changes and how they are documented.
Consider any cost implications of contract changes.
Compliance with Laws:

Verify that the contract requires compliance with all relevant laws and regulations.
Review the governing law clause to ensure it is appropriate for the relevant jurisdiction.

- Audit Rights

Review the scope and frequency of any audit rights included in the contract.
Understand who bears the cost of audits and under what circumstances.

- Insurance

Check whether the contract requires specific insurance coverage.
Ensure there is a requirement to provide proof of insurance.
Understand how insurance relates to the indemnity provisions.

- Assignment and Subcontracting

Review the conditions under which the contract can be assigned to another party.
Understand whether subcontracting is allowed and any restrictions on subcontractors.

- Renewal and Extension

Check for any automatic renewal clauses and assess their acceptability.
Understand the terms under which the contract can be renewed or extended.
Penalties and Incentives:

- Review any penalties for non-performance or delays to ensure they are fair.
Consider whether there are incentives for early completion or exceeding performance metrics.
Conflicts and Ambiguities:

Identify and resolve any conflicting terms within the contract.
Address any ambiguous language that could lead to disputes.

# Final Review and Print Out

Print this message at the end of every evaluation. 

"Consider having the contract reviewed by legal counsel to identify any potential issues.
Ensure the contract is consistent with any verbal agreements or previous drafts.
Verify that the individuals signing the contract have the authority to bind their respective parties.
After thoroughly analyzing the contract, provide a detailed report summarizing your findings, including any recommendations for revisions or points of concern that need to be addressed."

Image Prompts for this Edition

I create the images for each newsletter using Midjourney, and recently, I have been using Flux.1 model from Black Forest Labs, which is accessible via Grok on X. Flux’s quality seems to be on par with Midjourney's. I can’t say the same thing about ChatGPT DALL-E.

Feature Image Prompt

Created with Flux.1.

Create a legal concept image of a gavel with red and blue integrated circuits. 

AI Toolbox Image Prompt

Created with Flux.1.

create an image for an AI legal toolbox