In what is said to be a first for a U.S. law firm, a Pennsylvania law firm will sell artificial intelligence software directly to its clients in the health care industry to enable them to better review, analyze and negotiate contracts.

The Pittsburgh-based law firm Horty Springer is partnering with the AI software company LegalSifter to offer the product directly to hospitals and health systems. Initially it will allow clients to review business associate agreements required by HIPAA privacy regulations.

This will be the first time that a U.S. law firm will offer AI as a product directly to its clients, LegalSifter says. I was not able to find any evidence to the contrary.

Clients who purchase the software will be able to upload a draft contract into LegalSifter. The software uses AI to read and learn from text and search for specific concepts. After analyzing the contract, LegalSifter will present in-context comments written by Horty Springer lawyers. If the client needs additional information or advice, it can contact the law firm.

“It’s the next logical step in the use of artificial intelligence in the legal profession,” said Dan Mulholland, senior partner at Horty Springer. “Clients would like a legal review of every contract they sign, but to do so the review has to be affordable and aligned with the speed of business. Artificial intelligence, with embedded guidance designed bylawyers, is the only way to make that consistently possible.”

While starting with business associate agreements, Horty Springer will eventually offer the product for a range of contract types, including practitioner employment agreements, non-disclosure agreements, software end-user license agreements, and supplier terms and conditions.

A new document review tool, LegalSifter, reviews incoming drafts of legal contracts and then, within a minute or two, offers advice on negotiating the contract’s terms and conditions.

While the tool will be marketed directly to corporations and businesses that negotiate their own contracts, the company is also heavily targeting law firms that want to provide a service to their clients. Law firms will be able to customize the types of documents LegalSifter reviews and the advice it provides and then market the tool directly to their clients as a branded self-service or partial service.

The problem the tool is designed to address is what CEO Kevin L. Miller describes as a queuing problem. In every negotiation, at least one party is working from another party’s draft. All too often in a company, when that first draft comes in, the recipient reads it then forwards it to someone else in the company for further review. Drafts can pile up on someone’s desk, waiting for that next level of approval or comment.

“Even though there are a lot of collaboration tools out there for contract review, the sales cycles get long,” Miller said. “It’s essentially a queuing problem. No one tends to own the contract in a company.”

Using LegalSifter is easy. You upload a contract or document and the software reads it and highlights any issues it finds, offering advice as to what the issues are and how they should be addressed. Optionally, the reviewed document can be exported to Word with the highlights and comments intact.

The software is trained to read contractual text and look for specific concepts. LegalSifter says its sifters learn from experience and improve over time. LegalSifter has trained the software using both its own library of contracts and others that are publicly available through sites such as the SEC’s EDGAR database. Law firms will also have the option of training the software using their own documents.

This video shows how it works:

As of today, it works only with non-disclosure agreements. Within a week, it will also work for general terms and conditions in any contract — terms such as assignability, limitations of liability, and more. Plans are to quickly extend the tool to various other types of contracts, including leases, employment agreements, commercial loan documents, and master service agreements.

Document Review As A Service

For lawyers and law firms, a key feature of LegalSifter is the ability to customize both the “sifters” and the advice that is given. Law firms can pick and choose the sifters they want to use from among the ones that are preconfigured, or they can add custom sifters to the LegalSifter library. There is an additional cost to build custom sifters, but the company then credits that cost back to the firm in free sifts later on.

“Think of us as a sifter factory,” Miller said. “We are now building sifters every day and we have a roadmap of sifters that we’re launching.” Law firms can help “expand the factory” by paying the company to build custom sifters.

Law firms will also be able to customize the advice that is given to users of the tool, so that it reflects the firm’s own legal knowledge.

“Law firms will let their clients use the tool and charge them for it,” Miller explained. “That configuration of help text would be the law firm’s point of view.”

For now, that configuration must be done by working with LegalSifter staff. However, within the next two months, the company will enable law firms to configure it themselves, choosing the sifters they want to use, the document types they want to offer, and the help text they want to provide.

Miller said the company has already signed a Global 30 and an AmLaw 250 firm as clients. Both want to use the tool as a branded service to their clients tailored with their own advice.

Some of you reading this may be thinking that LegalSifter sounds a lot like other products on the market, most notably LawGeex and Beagle. These products are similar in that their software reviews incoming contracts and highlights any issues.

But Miller distinguishes his product in two ways. First, it is much faster, he said, delivering results in just a minute or two. Second, LegalSifter is targeting law firms that want to deliver a branded service to their clients, whereas both LawGeex and Beagle target in-house contract reviewers and operations staff.

LegalSifter was first developed in 2014 by two students in Carnegie Mellon’s graduate program in computer science as a tool to give contract advice to freelance software developers. Development of LegalSifter was put on hold for a time while the Pittsburgh-based company launched another product, ContractSifter, which is a bulk contract review and language-extraction tool. This year, the company turned its attention back to LegalSifter and is now making it commercially available.