A question often asked is: ‘Why do I need a lawyer to draft a contract when I can just use AI or an online template?’.
Here are some of the pitfalls in using online templates or AI to cut down on your legal costs.
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 you know whether you need a non-solicitation clause in your agreement? No? Neither does AI.
AI makes mistakes. In addition to AI leaving out important clauses from a contract, 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.
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.
AI is vague. Ambiguity is a litigation lawyer’s bestie. The interpretation of agreements can be subjective if clauses are poorly drafted, subjecting your business to costly disputes.
AI is generic. An agreement is not just a piece of paper with high-level terms. AI fails to grasp the South African context and nuance of the particular business, parties, agreement type, the importance of the business relationship and its financial value.
Case study: A client requested that we review a commercial lease that she had drafted using an online template. To ensure that the lease agreement was customized to the client’s needs took us 5 iterations, multiple negotiations with the counterparty and 11 billable hours. An example of a nuance in this contract was that the tenant was a manufacturer of honey and accordingly, provisions around the management of product packaging and honeybees on the premises was very important.
AI is not strategic. A good lawyer does more than draft terms – 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.
Rather than replacing lawyers with AI, you should be asking your lawyers how they use AI to bring down legal fees.
At Legal Ninjas, we make lawyers more affordable by ensuring that we work from home exclusively (less overheads) and use AI to speed up tasks (less billable hours).