‘He will make lawyers insignificant to most contracts’ – artificial lawyer

By Matt Lhoumeau, CEO, Concord.

Robots are not coming for lawyers’ affairs. But something more interesting is happening: companies are realizing that they do not need lawyers for most contracts in the first place.

I have spent the last decade seeing how many small and medium companies treat their contracts. What I have discovered may shock you: 65 percent of 1,500+ our customers do not have a legal team at all. Not a single lawyer for staff.

This is not just my observation. A Thomson Reuters study of 2023 found that 76 percent of legal departments are now offering routine contract work, with many companies that move contract ownership to operations and finance teams. Transformation is true.

And here is the thing – these companies are not fighting. They are blooming.

Contracts are not legal documents

Let us be honest about what is actually a contract. It is not a legal document. It is a business process.

Whether you buy something, sell something or hire someone, there is always a contract in the middle. Howt how you start a relationship. The legal aspect is only a small part.

This is not new. What is changing is that companies are finally acting in this reality.

When we started Concord, the contracts were “Legal Problem”. This was the predetermined assumption. But over the past five years, we have seen a massive change. CFO and COOS are taking ownership of contracts, treating them as operating tools than legal handcuffs.

This trend is supported by data. The contract management survey in 2023 of the CCMG found that the liability for contract management has been dramatically displaced, with finances and operations now controlling the contract function to 57 percent of organizations – from only 35 percent five years ago.

Why? Because it makes sense. CFOs manage how money moves inside and outside a company. Contracts govern those movements. The connection is evident after you stop viewing the contracts through a purely legal lens.

You are not negotiating as much as you think

Here is another control of reality: More than 90 percent of contracts signed on our platform have zero negotiations. They are simply being signed.

Think about your contracts:

• HR documents have been tempted
• Your client’s contracts are probably tempted
• And when you sign up with a seller? You are using their model

If you are not Walmart negotiating with Procter & Gamble, you probably don’t have the lever to change much anyway. Then why waste time pretending?

This matches world trade and contracting research that shows that for most companies, only 10 percent of contracts undergo a considerable negotiation. For the rest, legal review adds time without adding value.

Smart companies understand this. They know which battle is worth fighting. For routine agreements, they are increasingly passing the legal review.

He is not causing this change – is accelerating it

Titles want to claim that he will replace lawyers. This is missing the point completely.

He is not creating this trend – it is accelerating a change that was already happening.

The contract management software with skills shall give everyone access to legal knowledge they did not have before. You can put your contract in chatgpt or specialized tools like Concord it and get an immediate first summary to find out if there is any problem – a missing clause, poor formulation or discrepancies.

This first -level analysis is used to search for a lawyer. Now, anyone can do it.

Even the American Bar Association admits that the funds of it are already conducting first -pass contract reviews with over 90 percent accuracy for standard agreements. We are not talking about future technology – this is happening now.

What we are seeing is the democratization of legal knowledge, not the replacement of lawyers. The result? Legal teams can focus on truly complex issues where their expertise adds genuine value.

The future of contracts is not what you think

If we take a step back and ask what contracts would look like if we invented them today, we would create something radically different from the documents we use now.

Current contracts are extremely inefficient. They are all different. Critical information is buried among the 15 clauses. Important dates are distributed to dozens of pages.

The World Economic Forum estimates that inefficient contracts cost the global economy over $ 2 trillion a year. This is not just a legal problem – it’s a massive economic delay.

In 10 years, it will help turn contracts into something more like sheets with terms – simple tables that show exactly what the deal means. You will know immediately where you can see if it is a customer contract or the seller’s agreement.

Long-term, I believe we are heading towards smart contracts-not necessarily those based blockchain, but agreement where computers negotiate with each other based on the parameters set by humans. This is not scientific fiction. It is the last logical point of the trends we are already seeing.

What does this mean for SMBs and middle market companies

If you run a company with less than 500 employees, the writing is on the wall: by 2035, you will probably not need any legal person involved in your routine contracts.

This is not speculation. It is already happening.

Last week, I met a 300 -person construction company in Texas that has been about 70 years. They no longer have a legal team. They have transferred everything, using the contract analytical software to manage their agreements in the country.

According to McKinsey Research, this model is accelerating. Their analysis shows that by 2030, approximately 23 percent of the current legal work will be fully automated, with 30 percent more significantly added to technology – notes that are even higher for routine contract tasks.

For companies holding legal teams, their role is dramatically evolving. Instead of reviewing the fifteenth review of a standard agreement, they are focusing on high strategies and issues where their expertise really matters.

The reality of contract management today

Should you understand exactly how this change works in practice? Consider these numbers:

1. 90% of the SPEs and retailers now pass without a single modification
2. 40% of companies are routine external legal duties
3. CFO, not legitimate, increasingly and more contracts of contract

MIT management review recently emphasized how this transition is already visible in Fortune 500 companies, with legal departments shifting to “business opportunities” than contract reviewers. If Giants are doing this action, the middle market is sure to follow.

The winners in this new landscape will be companies that prohibit the treatment of contracts like the 1990s and begin using them as strategic business assets.

For legal professionals, the message is clear: evolving or becoming irrelevant to most of the daily work of contracts. The highest value will not be in reviewing standard agreements – will be in strategic guidelines and complex negotiations.

Less is more

I learned this lesson the difficult way.

Five years ago, I was the person who was looking for “only 10 other lines of code” when building our platform. Now I see what we pay for that approach. Technical debt is true, and is the same as the contracts.

The future belongs to simplicity. When it comes to contracts, less is more.

That is why in Concord, we are building software for managing the life cycle of the contract that places an agreement where they belong: in the heart of your operations, not buried in the Legal Box.

The question is not whether this transformation will occur. It’S’S if you will be in front of the curve or playing catching.

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For the author: Matt lhoumeau is co -founder and CEO I ConcordA contract management platform used by over 1,500 SMB companies and in the middle market worldwide. Before transferring to the US, Matt worked with iconic leaders such as former French President Nicholas Sarkozy and founded his first company at the age of 17.

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(This is a sponsored article of thought leadership by Concord for artificial advocate.)