Advancements in AI are bringing about transformation across most industries, including the legal profession. While AI is a useful tool in legal research, it has not quite mastered the art of contract drafting. Below, I set out the reasons why you should not be relying on AI (or online templates, for that matter) to draft your legal agreements.
1. AI will draft what you tell it to draft. It will not include bespoke, detailed clauses that cover the particular risks of your business relationship unless you tell it to do so. Do you know whether you need a non-solicitation clause in your agreement? No? Neither does AI.
2. AI makes mistakes. In addition to AI omitting important clauses, there is a risk that AI will include nonsensical, incorrect content in the agreement. AI may reference offshore legislation or law that has already been amended.
3. AI can’t negotiate. It lacks human qualities such as empathy and judgment and will not be able to tell you whether to accept the counterparty’s requested changes to a draft agreement or how you could compromise.
4. AI is vague. Ambiguity is a litigation lawyer’s bestie. The interpretation of agreements can be subjective if clauses are poorly drafted. This gives rise to a greater risk of disputes and costly dispute resolution which could have been avoided by paying much less in upfront legal fees.
5. AI is generic. An agreement is more than high-level terms. AI fails to grasp the South African context and nuance of the particular business, parties, agreement type, importance of the business relationship and its financial value.
Case study: A client requested that I review a commercial lease that she had drafted using AI. To ensure that the lease agreement was customized to the client’s needs took me 5 iterations, multiple negotiations with the counterparty and 11 hours. An example of a nuance in this contract was that the tenant was a manufacturer of honey and their premises was located in a business park, next to a public sports facility. Provisions around the management of product packaging and honeybees on the premises was very important. If she had not requested a check on her AI drafted contract, this could have resulted in serious risks to her sports facility and the tenanted premises.
6. AI is not strategic. A good lawyer does more than draft terms out of the ether – they ask A LOT of questions! This is because they want to fully understand the particular needs of your business, plan for unique risks, consider consequences and tailor an agreement to align with your business strategy.