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ContraxSuite - Why We’re Open-Sourcing ContraxSuite and Product Overview

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On July 3, 2017, LexPredict announced our intention to open source ContraxSuite, our document analytics platform. This presentation provides a summary of the LexPredict announcement, as well as an overview of the LexPredict ContraxSuite platform and use cases.

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ContraxSuite - Why We’re Open-Sourcing ContraxSuite and Product Overview

  1. 1. Empowering the future of legal decision-making © LexPredict 2012-2017 @lexpredict www.lexpredict.com contact@lexpredict.com LEGALTECH IN THE MODERN INFORMATION ECONOMY Why We’re Open-Sourcing ContraxSuite
  2. 2. 2   On July 3, 2017, we announced our intention to open source ContraxSuite, our document analytics platform. http://bit.ly/2uVEsbT http://bit.ly/2u3uJ6G Read Full Version of our letter here Executive Summary Michael J. Bommarito Co-Founder + CEO @ LexPredict Daniel Martin Katz Co-Founder + CSO @ LexPredict
  3. 3. 3   Starting in August 2017, both the code, documentation, and our public development roadmap will be released. We will be soliciting user and developer feedback and adjusting the development roadmap as we go. We are also looking for partner organizations to seed a steering body like the Linux Foundation. The Path Forward
  4. 4. 4   ContraxSuite will be free for end-users such as law firms and corporate legal departments. High-Level License Terms Other technology providers and resellers can either purchase a license or contribute back any derivative work to the open source library (copyleft).
  5. 5. 5   Will you resell the software to third parties? YES  NO   How much does ContraxSuite cost? Will you keep derivative work open?Free   YES  NO   Free  $12K/year   50% in trust for open source grants   50% for ContraxSuite, LLC  
  6. 6. 6   What, How, Why, When? ContraxSuite Overview What is ContraxSuite? What are use cases for ContraxSuite? 1   2  
  7. 7. 7   How does ContraxSuite work? Do we provide support for ContraxSuite? About LexPredict Why are we open-sourcing ContraxSuite? 3   4   5   6  
  8. 8. 8   What is ContraxSuite? Open Source Contract Analytics and Legal Document Platform
  9. 9. 9   What is ContraxSuite? ContraxSuite.com
  10. 10. 10   What is ContraxSuite? ContraxSuite is a legal document analytics platform. …but what is legal document analytics?
  11. 11. 11   What is Legal Document Analytics? …to legal documents such as: Natural Language Processing (NLP) Text Analytics Computational Linguistics Machine Learning (ML) Contracts Operating Agreements Policies and Procedures Benefits Plans …or even communications like email. Legal document analytics is the application of:
  12. 12. 12   What is Legal Document Analytics? You’ve already seen legal document analytics technology across a wide range of companies. This includes both contract analytics and a number of other use cases that focus on other types of documents. What is Contract Analytics?
  13. 13. 13   What is Legal Document Analytics? What is Contract Analytics?
  14. 14. 14   How is ContraxSuite different? battle-tested realistic open source human+machine •  every bill and resolution of Congress •  every section of the US Code •  every regulation in the CFR •  every SEC filing and order •  every FCC filing and order •  every Supreme Court opinion •  every District and Circuit Court opinion •  every Tax Court opinion •  millions of pages of private legal documents •  over 500K public contracts and legal documents things we’ve analyzed over the past decade -
  15. 15. 15   How is ContraxSuite different? battle-tested realistic open source human+machine built for the documents you actually have, not the demo   things that actually happen: •  documents come from mixed systems •  shared drive, email, DMS, SalesForce •  documents arrive in mixed formats •  PDF, Word, text •  OCR is never perfect •  multiple engines, fuzzy matching •  standards change •  assignment is more than just allowed/disallowed
  16. 16. 16   How is ContraxSuite different? battle-tested realistic open source human+machine free and open for end-users to audit and improve   what you can do as an end-user: •  use ContraxSuite at no charge •  modify ContraxSuite at no charge •  run ContraxSuite wherever you want •  audit ContraxSuite at no charge
  17. 17. 17   How is ContraxSuite different? battle-tested realistic open source human+machine designed to augment and integrate, not replace   things we plan for: •  algorithms do not have perfect accuracy or recall •  humans are still more efficient for many tasks •  humans need to review and interpret results •  multi-user projects and workflows are important
  18. 18. 18   What are just some of the potential use cases for ContraxSuite? Use Cases And Applications for Contract Analytics
  19. 19. 19   Use Cases for Contract Analytics DUE DILIGENCE FOR M&A ContraxSuite can assist organizations with due diligence tasks related to mergers and acquisitions (M&A), re-structuring, bankruptcy, or audit. •  Search shared drives, mail servers, and cloud services •  Validate key financial assumptions like revenue and sales terms •  Validate key legal terms like change of control and executive benefits •  Identify client risk like Most Favored or discount terms •  Analyze regulatory and geopolitical risks
  20. 20. 20   Use Cases for Contract Analytics SUPPLY CHAIN RISK Many organizations have developed complex webs of supplier relationships that are critical to their operation. But when a counterparty fails or a dispute arises, few organizations can identify the effects or mitigate risks. ContraxSuite helps organizations identify risks through the supply chain, including counterparty risk, geopolitical risk, regulatory risk, and dispute/litigation risk. •  Identify contracts by counterparty or geopolitical risk •  Identify contracts with abnormal venues or liquidated damage clauses •  Identify contracts with alternative dispute resolution mechanisms •  Identify contracts with escrow or bankruptcy/default provisions
  21. 21. 21   Use Cases for Contract Analytics REVENUE RECOGNITION Financial accounting standards require analysis of documents to comply with revenue recognition standards. ContraxSuite can identify whether a document is a contract and can pull the relevant financial information for use in revenue recognition models. •  Identify contracts •  Detect performance obligation clauses •  Identify the transaction price and discounts
  22. 22. 22   Use Cases for Legal Document Analytics RECORD RETENTION ANALYSIS Record retention is a complex problem for many organizations. Many organizations resolve the uncertainty by retaining records too long, resulting in unnecessary risk and compliance concern. ContraxSuite can help organizations classify documents and communication based on requirements like state and federal employment law or the Uniform Preservation of Private Business Records Act (UPPBRA). •  Identify personnel and employment records •  Identify health, medical, or tax records •  Identify retirement and investment plan records •  Identify records related to the sale or disposal of weapons, chemicals, or dangerous substances
  23. 23. 23   Use Cases for Contract Analytics REAL ESTATE AND LEASE ABSTRACTION Many organizations manage hundreds of properties or lease to thousands of tenants. How do these organizations keep up with the unending stream of renewals, vacancies, discounts, restrictions, and zoning issues? Contract analytics systems like ContraxSuite help organizations stay on top of their portfolio by abstracting these documents into key facts and terms. •  Analyze key clauses like restrictions, subleasing, evergreen, and discount •  Extract key terms like location, party, duration/term, pricing and discount, and termination date
  24. 24. 24   Use Cases for Contract Analytics ISDA, CSA, AND ED/PB AGREEMENTS Financial services agreements often rely on specialized terminology and specific forms like ISDA Master Agreements and Credit Support Annex Agreements. Contract analytics software like ContraxSuite can help organizations to structure and abstract these critical counterparty agreements to analyze key rates, conditions, and assets. •  Analyze International Swaps and Derivatives (ISDA), Credit Support Annex (CSA), Executing Dealer (ED), and Prime Brokerage (PB) agreements •  Identify key terms like interest rate indices (LIBOR/EURIBOR/ UST), equity indices, exchanges, and protocols
  25. 25. 25   Use Cases for Legal Document Analytics POLICY AND PROCEDURE CONSOLIDATION As organizations grow organically or through M&A, policy and procedure documents often spiral out of control. These key documents slowly become fragmented or conflicting sources of compliance nightmare and litigation risk. Many organizations have taken on projects to consolidate and re-organize their policy and procedure documents, resulting in up-to- date, standardized compliance programs across the organization. ContraxSuite can help organizations locate, organize, and analyze these agreements to rapidly accelerate projects. •  Search shared drives, mail servers, and cloud services •  Locate employment, information security, benefits and compensation, and other policies •  Identify key regulatory issues like HIPAA, the Fair Credit Reporting Act (FCRA), and the Americans with Disabilities Act (ADA) •  Cluster similar policies and automatically identify differences
  26. 26. 26   Use Cases for Legal Document Analytics FRAUD DETECTION AND COMPLIANCE SUPPORT Instead of waiting for discovery in litigation, many organizations have put the emphasis on pre-discovery compliance and fraud detection. Document analysis platforms like ContraxSuite can help organizations review communications and material that could signal illicit or illegal behavior, such as anomalous or missing agreements or suspicious references to regulators and audit boards. •  Identify KYC/AML documentation •  Identify regulatory and audit chatter •  Identify unusual agreements or communications
  27. 27. 27   Use Cases for Legal Document Analytics EMPLOYMENT AND BENEFITS STANDARDIZATION As organizations grow organically or through mergers and acquisitions, they acquire a wide range of employment and benefits terms. Over time, these inconsistencies result in serious compliance and financial overhead. ContraxSuite helps organizations locate, organize, compare, and standardize employment and benefits documents. •  Locate and organize key agreements like employment agreements and benefits plans •  Analyze key clauses like at-will, invention assignment, stock options, and confidentiality
  28. 28. 28   Use Cases for Contract Analytics HIPAA AND BAA AUDITS The Health Insurance Portability and Accountability Act (HIPAA) requires organizations to take certain protections with patient data, and these protections extend to so-called Business Associates as well. ContraxSuite can help healthcare organizations audit and document the existence and quality of their Business Associate Agreements (BAA), which are key resources in the event of breach or governmental audit. •  Locate Business Associate Agreements (BAA) •  Analyze coverage of key terms for HIPAA compliance
  29. 29. 29   How does ContraxSuite work? How Contract Analytics Tools Like ContraxSuite Work
  30. 30. 30   HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works IDENTIFY LEGAL MATERIAL Tools for real-world data Do you know where your legal material lives? How many contracts do you have? Where are your subsidiary operating agreements? Have your sales personnel made binding statements in email? In our experience, many organizations never realize the benefits of contract analytics because they struggle to locate their contracts. ContraxSuite doesn't just analyze legal material; it can also identify legal material in the sea of other documents and files in your organization. •  Search shared drives, mail servers, and cloud services •  Automatically identify legal agreements or compliance material •  Ingest and OCR documents from Word, WordPerfect, PDF, HTML, etc. •  Built to process millions of files per day
  31. 31. 31   HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works ORGANIZE DOCUMENTS Automatically group and explore Once you've identified your legal documents like agreements and benefits plans, how do you organize them? Do you put them in categories by agreement type? Do you sort them by counterparty or year? Maybe you group them by practice group or managing attorney. ContraxSuite takes most of the work out of this process, automatically organizing documents and suggesting labels or groups based on content and metadata. This unsupervised approach can save thousands of valuable hours for organizations, especially at early stages of contract management maturity. •  Cluster legal documents based on content like key clauses or counterparties •  Group legal documents by metadata such as author or date
  32. 32. 32   HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works DE-DUPE DOCUMENTS Automatically find exact and near duplicates Many organizations use shared drives and emails to store documents like agreements. Over time, however, these systems fill up with exact or near duplicate copies of the same document. When it comes to contract analytics, de-duplication is critical for reporting and analyzing the real risks and opportunities in your data. ContraxSuite uses clustering and approximate matching algorithms to identify documents that are similar or exactly identical. Furthermore, ContraxSuite can identify common amendment content, allowing organizations to separate "true" duplicates from near- match amendments. •  Locate and consolidate exact duplicate documents based on content and metadata •  Locate and consolidate near-duplicate documents based on content and metadata •  Locate and consolidate amendments with parent or master agreements
  33. 33. 33   HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works ANALYZE DOCUMENTS Locate key clauses and references Organizations are increasingly using contract analytics and document review tools to locate key clauses and references. This analysis often focuses on tasks such as validating contract standards like as service level requirements, assignment restrictions, or controlling law and venues. ContraxSuite allows organizations to quickly apply standard analysis approaches like those used in diligence, lease abstraction, contract review, or compliance consolidation. Furthermore, ContraxSuite is built to allow organizations to train new tools or customize the underlying software. In most circumstances, regular users can teach ContraxSuite to classify clauses without any additional development. However, when required, organizations can "lift the hood" and customize the underlying open-source software to address their own problems. •  Apply out-of-the-box analysis for diligence, lease abstraction, contract review, and regulatory compliance •  Locate key clauses like assignment and change of control, controlling law and venue, and discount or MFC •  Train new models and clauses with regular users - no development required •  Customize the underlying open-source software when desired •  Own your own models and data
  34. 34. 34   HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works EXTRACT INFORMATION Extract key terms and facts What is the average term of your supplier agreements? What is the most common jurisdiction for dispute resolution? How many contracts would be affected by a change in HIPAA regulations or EU data protection directive? If you can't answer these questions, then your contract management program still has room for improvement. ContraxSuite allows organizations to extract key terms and facts, including dates, financial or monetary amounts, rates, company entities, geopolitical entities, financial indices or benchmarks, and regulations. •  Extract key terms like dates and dollars •  Extract key legal facts like governing law, dispute resolution mechanism, or regulation
  35. 35. 35   HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works VISUALIZE AND EXPORT Generate reports and export to Excel ContraxSuite allows users to easily export and visualize the results of tools, like maps that show contracts by country, spreadsheets with termination dates, clusters of similar agreements, oro spreadsheets with master agreements and SOWs. •  Export all results to Excel or PDF •  Visualize results using charts or maps
  36. 36. 36   OPTICAL CHARACTER RECOGNITION Unfortunately, many documents were born "analog" and scanned as PDF or TIF files. Optical character recognition, often abbreviated as OCR, is a technology that can help convert scanned or handwritten material back into digital, "computer-friendly" documents. Once upon a time, OCR was much more difficult. Today, high-quality OCR tools like Google's Tesseract Project are freely available for nearly 100 languages. If you've ever used Google Books, you've already used the OCR software underneath the hood in ContraxSuite. HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works
  37. 37. 37   NATURAL LANGUAGE PROCESSING Over the last 50 years, computer scientists and linguists have made huge strides in the fields of natural language processing and computational linguistics. Luckily, almost all of the most important discoveries in this field have been published in leading academic journals, and many of these algorithms are freely available in packages like Stanford's CoreNLP and the Natural Language Toolkit (NLTK). Today, tools like CoreNLP and NLTK allow users to quickly analyze the structure of words and sentences, look up synonyms and antonyms, tag parts-of-speech, and identify proper nouns like countries in tens of the world's most common languages, including English, Spanish, French, German, Chinese/ Mandarin, and Arabic. HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works
  38. 38. 38   CLUSTERING Clustering is a powerful form of unsupervised learning that has been used for over 50 years in fields like biology, genetics, and statistics. By combining natural language processing with clustering, we are able to automatically categorize clauses and documents just like scientists group sequences of DNA or regions of the brain. As a tool for modern data science, clustering is readily available in many open source and freely a v a i l a b l e f r a m e w o r k s s u c h a s scikit-learn, Apache Spark/Mahout, and Weka. Thanks to contributions from two generations of academics and companies like Facebook and Google, we can stand on the shoulders of giants instead of starting from scratch. HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works
  39. 39. 39   CLASSIFICATION When you hear someone talk about "machine learning", they are probably referring to a mathematical approach called classification. Classification is a form of supervised learning (alongside regression - which you might remember from your schooling), in which a set of rules or equations helps distinguish between two or more types of “things.” Back in 1983, when machine learning was already old enough to warrant a history, scientists were drawing distinctions between expert or rule-based systems and data-driven systems. As systems like Google's DeepMind or IBM's Watson show, the "battle for AI" has swung in favor of data. Luckily, the battle has also produced a rich open-source ecosystem of machine learning frameworks like f r a m e w o r k s s u c h a s s c i k i t - l e a r n , Apache Spark/Mahout, and Weka. HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works
  40. 40. 40   TRAINING DATA If machine learning techniques are driven by data, where do contract analytics platforms get their data from? Generally, there are two sources for high-quality contracts and legal documents: •  public data, like Federal court evidence or SEC filings •  private data, like material acquired from clients C o n t r a x S u i t e i s b u i l t o n the LexPredict Legal Document Database, which draws entirely from public sources like Federal Courts and SEC filings. Unfortunately, many vendors build their products on private data acquired from clients, which introduces serious legal and economic concerns. Because ContraxSuite is an open-source product and can be used freely by most organizations, organizations can benefit from contract analytics without worrying that their private data will be aggregated or re-used. HOW CONTRACT ANALYTICS TOOLS LIKE CONTRAXSUITE WORK How It Works
  41. 41. 41   Why are we open-sourcing ContraxSuite? What We Do and Why
  42. 42. 42   OPEN SOURCE IS A SUCCESSFUL BUSINESS MODEL IN MANY OTHER FIELDS
  43. 43. 43   OPEN SOURCE IS A SUCCESSFUL BUSINESS MODEL IN MANY OTHER FIELDS
  44. 44. 44   WE HAVE HIGHLIGHTED THESE IDEAS IN A VARIETY OF FORUMS** **But talk is cheap – for us this announcement equals action https://www.thelawlabchannel.com/daniel-martin-katz-mlaas-machine- learning-as-a-service https://www.slideshare.net/Danielkatz/machine-learning-as-a-service-mlaas-open-source-and- the-future-of-legal-analytics-by-daniel-martin-katz-michael-j-bommarito-ii
  45. 45. 45   Legal Tech and the Unfinished Good Problem If Open Source Code Is a Public Good, Why Does Private Provision Work (Or Does It)? David R. Agarwal, LBJ Journal of Public Affairs, Spring 2006. DESIGN PLAN BUILD ? 1. http://www.uky.edu/~drag222/research/Agrawal_OSS.pdf
  46. 46. 46   Legal Tech and the Unfinished Good Problem If Open Source Code Is a Public Good, Why Does Private Provision Work (Or Does It)? David R. Agarwal, LBJ Journal of Public Affairs, Spring 2006. CLIENTS DON’T WANT PRODUCTS. THEY WANT SOLUTIONS. 1. http://www.uky.edu/~drag222/research/Agrawal_OSS.pdf
  47. 47. 47   Legal Tech and the Unfinished Good Problem If Open Source Code Is a Public Good, Why Does Private Provision Work (Or Does It)? David R. Agarwal, LBJ Journal of Public Affairs, Spring 2006. THEY REALLY DON’T WANT TO PAY (SHOULD NOT HAVE TO PAY) FOR PRODUCTS THAT ARE 80% COMPLETE FOR THEIR USE CASE. 1. http://www.uky.edu/~drag222/research/Agrawal_OSS.pdf
  48. 48. 48   Legal Tech and the Unfinished Good Problem If Open Source Code Is a Public Good, Why Does Private Provision Work (Or Does It)? David R. Agarwal, LBJ Journal of Public Affairs, Spring 2006. WE NEED A DIFFERENT MODEL IN #LEGALTECH – WE NEED AN OPEN SOURCE MODEL. 1. http://www.uky.edu/~drag222/research/Agrawal_OSS.pdf
  49. 49. 49   Legal Tech and the Unfinished Good Problem 1. http://www.uky.edu/~drag222/research/Agrawal_OSS.pdf If Open Source Code Is a Public Good, Why Does Private Provision Work (Or Does It)? David R. Agarwal, LBJ Journal of Public Affairs, Spring 2006. LIKE LINUX AND DATA SCIENCE, CONTRACT ANALYTICS IS ABOUT TWO THINGS: TECHNICAL PRACTICES + DATA THERE IS NO MAGIC MACHINE OR SECRET SAUCE.
  50. 50. 50   Do we provide support for ContraxSuite? What We Do and Why
  51. 51. 51   HOSTING, CONFIGURING, AND CUSTOMIZING CONTRACT ANALYTICS Support and Customization SUPPORT AND TRAINING SERVICES If you'd prefer to have third-party support and hosting, we can make sure that you're up and running in a hurry. Need ongoing support for your users or IT staff? As the original project developers, we're uniquely positioned to help. •  Hosting •  IT Support •  User Support •  User Training
  52. 52. 52   HOSTING, CONFIGURING, AND CUSTOMIZING CONTRACT ANALYTICS Support and Customization CUSTOMIZATION AND DEVELOPMENT SERVICES Are you interesting in tackling a problem that ContraxSuite doesn't handle out of the box? Maybe you want to integrate with a software system or cloud service that we don't currently support. Maybe you need help working with a new contract type or novel industry form. Our expert team of developers can help you devise a solution quickly and efficiently. •  Implementation and Configuration •  Custom Contract Models •  Custom Workflow Development •  Custom Data Sources
  53. 53. 53   Learn More ContraxSuite.com
  54. 54. 54   About LexPredict What We Do and Why
  55. 55. 55   Empowering the future of legal decision-making Mission Statement LexPredict helps organizations make better decisions in the practice and business of law.
  56. 56. 56   Michael J. Bommarito II Chief Executive Officer Co-Founder M.S.E., M.A., B.S., University of Michigan, Ann Arbor. Lecturer, University of Michigan, Ann Arbor. Adjunct Professor, Michigan State University. Fellow, Stanford CodeX Center for Legal Informatics. Michael is co-founder of LexPredict and an experienced consultant and entrepreneur in financial and legal services. His experience spans strategy, technology, business, and operations, ranging from top Am Law firms and $B+ AUM investment firms to idea-stage startups. Qualifications Bio
  57. 57. 57   Daniel Martin Katz Chief Strategy Officer Co-Founder J.D. + Ph.D. - University of Michigan, Ann Arbor. Associate Professor, Illinois Tech - Chicago Kent Law. Affiliated Faculty, Stanford CodeX Center for Legal Informatics. Legal Rebel - ABA Journal / FastCase 50. Daniel is co-founder of LexPredict and a technologist, scientist, and law professor. He blends thought leadership and vision with analysis and execution, and is renowned in the field as a speaker and educator. Qualifications Bio
  58. 58. 58   LexPredict is an enterprise legal technology and consulting firm, specializing in the application of best-in-class processes and technologies from the technology, financial services, and logistics industries to the practice of law, compliance, insurance, and risk management. Empowering the future of legal decision-making Mission Statement We focus on the goals of prediction, optimization, and risk management to enable holistic organizational changes that empower legal decision-making. These changes span people and processes, software and data, and execution and education.
  59. 59. 59   Corporate Brands

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