Episode 22- Jordan Ritenour Founder & CEO Clearlaw.ai

Episode 22 -We speak with Jordan Ritenour Founder & CEO Clearlaw.ai  

Jordan shares his story about why he started Clearlaw.ai and the importance of data visibility for today's successful organizations. He takes us through specialized artificial intelligence in the market why it is important and gives his thoughts on the Job Apocalypse and the fear of AI replacing human labor.

About Clearlaw.ai:

We add superpowers to your CLM or ELM:

While Contract Lifecycle Management (CLM) or Enterprise Legal Management (ELM) technologies help legal teams manage the contracting process, Clearlaw's expertise is in contract content analysis and extraction.

Born as an AI-native company, our technology plugs into your existing tools to deliver the contracting data you need throughout the contracting lifecycle, from intake to renewal, and whether it is your standard template or third-party paper.

Learn More:

https://www.clearlaw.ai/

Transcript

Play the King: 0:00

This podcast is sponsored by OMI, the company that makes CRM Work! Today's guest is Jordan Ritenour, the founder and CEO of ClearLaw. Jordan, welcome. I'm really excited to talk with you. The first thing I want to ask you about is something that I noticed on the ClearLaw Landing page. And you know, you get there and you see in big letters, big words. We're closing the data deficit for legal teams. And I wonder what you mean by data deficit?

Jordan Ritenour: 0:25

Yeah, Well, first, thanks for having me. It's great to be here with you and yeah, we're closing on the data deficit for legal. That's something we hear from customers, from prospects all the time. The legal team, in-house, corporate legal teams. They feel like they're at a data deficit, compared to their counterparts, whether it's, you know, at the C-suite level and CMO or whatever the case or just the individual contributors who see all the data that's available and usable and presentable by marketing and sales and operations. Legal feels like, yeah, we know how many contracts we reviewed last quarter. We have some insights around how I'm spending my time. But a lot of the data that would be useful for them resides in a executed, signed PDF contract, somewhere on a share drive or, you know, Google Drive, some repository. And really for them to get value from that, they have to go in and do a lot more work, searching and finding, then putting that data into maybe an Excel spreadsheet or Salesforce. So we're trying to help them understand what's in the contract without them having to do that work. And so we turn contractual language into structured data, and people probably think, well, contracts are pretty well structured already, and that's true. But there's a million different ways to say things in a contract, and sometimes there's an advantage to being a little ambiguous, depending on what side you're on. M m-hmm.< affirmative>. So we are turning it into machine readable data and structured data that i f t hen identified, extracted, and then can be sent to wherever they need that data to be stored. So Salesforce is a good example. A lot of people keep contractual data in their Salesforce instance, and then they can use that data if questions arise about the obligations in that contract, or even pre-execution. You know, if they just w ant a sense of what's in this contract, what do I need to focus my time on, w e can help them identify those things without them having to read 50 pages of Legalese.

Play the King: 2:34

Gotcha. That's super interesting. Most founders have some sort of story about experiencing this pain themselves before they got the insight to start the company. I wonder how you came at this. Were you an attorney? Were you someone in business who, you know, you were like, Why is this so tough? Tell me that story.

Jordan Ritenour: 2:49

Yeah, I, I felt the pain personally. I was actually still in law school, working at a tech company on their legal team inhouse. And a lot of what I was doing was, was contract review and red lines and negotiations. And I'd be handed an assignment and say, Hey, you know, from the supervising attorney would say something like, Hey, I did something similar to this six months ago. See if you can dig through the share drive, find it, and make sure the terms we care about, line up like, huh. Okay. I don't know what contract you're talking about. I don't know what terms<laugh> matter to us.<laugh>, it's really amazing actually. You know, law school is a great educational experience, but not necessarily the best preparation for doing the nitty gritty legal work that most recent grads find themselves doing. So I would spend a lot of time just trying to find relevant contracts to compare against this new one. You know, reading them, making sure the terms all sounded pretty similar to me. It probably took me 10 times longer than it would someone who's experienced. So, this company that I was at, actually focuses on data science and helping leaders make decisions based on data and finding patterns. I thought, isn't it interesting that this doesn't really seem to exist for legal work? Like, is there a way to aggregate the experience of all these, these super experienced attorneys that have done this for 10 years and give me a tool to help understand what matters to the organization, what I need to be worried about and help me make decisions on what I need to do to review this contract and get it approved. So, you know, just kind of thought of that in the back of my mind, and really didn't have a light bulb moment until after I'd left this job. I got a call from a salesperson, who I've been negotiating a contract with. And really the edits I'd made to their standard sales form were very minor. There wasn't anything too serious, but I sent it back like two months later, he gave me a call and said, Hey, legal reviewed, your red lines, no major issues. I think we're good to, to close this out and accept those and let's get this signed. It was like, Wow, I don't even work there anymore. I haven't thought about that job in six weeks, probably. Um, but I can put you in touch with<laugh> with who's there now and took over. I started to wonder, is this just a problem for everybody? Is this, you know, legal slow? Like, think about this contract was the only thing holding them up from closing revenue and it took three months mm-hmm.<affirmative>, basically to say, Hey, yeah, we're good. So that really, put me on the path of looking at how big is this problem? And of course, lawyers or in-house legal teams have the reputation for being slow and holding up deals. And so my co-founder and I started going down this path testing technology and seeing what we could do to help help folks understand contracts and move a lot faster.

Play the King: 5:51

Is part of the issue, maybe a way to put it that like, institutional knowledge is so key in law firms and legal organizations within companies. You know, if someone leaves, part of the knowledge goes with them and people are left a little bit blinded there. So maybe use that as an entree to talk about some of the other ways that data visibility is important for, for organizations that are run well.

Jordan Ritenour: 6:18

Yeah, that's a really good point. The institutional knowledge is really key. And if you think about, once that person leaves who's maybe negotiated the first, the new company, you've got a hundred customers there might be one person who knows everything there is to know about all those contracts. They did them all personally, they leave. If you haven't really been keeping good track of the obligations and stuff that knowledge leaves with them. Someone else is gonna have to go through those. And we talked about it a little bit briefly earlier, but if they're just somewhere on in PDF format, sitting in the share drive, it's really hard to really go through, basically have to start over and go through those contracts one by one. An example, you can think about everyone's familiar with now is COVID 19 hits. Every organization wants to know, okay, does our force majeure clause cover pandemics? Is it explicit? Is it implied? You know, act of God type thing! So, a lot of companies had to go through hundreds, thousands of thousands of contracts to figure out where their risk was on that. So this data visibility is really key. And we like to think about the contract as really the basis for every business relationship. So maybe less important if you're more consumer facing and it's kind of a take it or leave it thing. But any B2B organization, there's gonna be some red line, some edits. It's especially important if you're working off customer paper, third party paper and you can always rely on, you know, we have maybe some minor edits to our standard template. So the, the data visibility becomes key. Whether you are looking at executed contracts, maybe you have a whole repository, hundreds of thousands of documents, the world changes. You need to be able to answer questions about that quickly. And really it shouldn't just be on the legal team to do that. You know, marketing needs to know if they can put the customer logo on the website, that's usually covered by the contract or customer success needs to know when the contract's gonna renew and when they need to get back in touch. Because the customer has an opt out clause, before renewal finance team, needs to know about payment terms and price escalation notifications and all that. So it really affects the entire organization from post execution standpoint. But this information is really valuable pre-execution too. So if you think about contract comes in, legal team needs to triage it, they could provide an estimate on how long it would take to go through how many turns they expected. This is the kind of data we provide and want to empower legal teams to have so that they can present this data to the rest of the organization, whether it's the CRO or the CEO, so they can forecast pipeline more accurately. And really the legal team can just move a lot faster through the documents if they don't have to review absolutely everything. They have a tool that says, Hey, there's five things in here that you tend to worry about. The rest of it is good, but you can focus your time on those, those few things that, you know, might come back to bite you later.

Play the King: 9:27

You guys use ai, it's part of your url, ClearLaw.ai. It seems integral to what you do. And yet, so for someone like me, a lay person, I don't, you know, I'm, you're like, Yeah, we use ai. I'm like, great, that sounds cool. Tell me why that's important beyond that? What is it about the modern office suite, whether it's Microsoft, Google, whatever, that didn't solve this problem. Why do you need some sort of specialized software for this?

Jordan Ritenour: 9:56

Yeah, that's a good question because we do hear, I heard Google's working on this and yeah, they are. Google wanted to devote resources to NLP, Natural Language Processing or AI deep learning technology. They've obviously got a lot of resources to do that. So specifically, our models are trained on contract language, so we're very focused and can add new use cases quickly because of that focus. And our entire data pipeline is tuned to contract or I'd say contract adjacent language. So you think about an invoice or something like that. And this specialization allows us to just be a lot more accurate. So when you say, Hey, AI sounds cool, like what did that mean? Our data annotation pipeline, our training models, are trained on hundreds of thousands of contracts to parse, identify language characteristics and then make it easy to extract those. and because there are so many different ways to say essentially the same thing, you need to be really focused on, okay, is this the same thing? Is this just another way of saying termination for convenience? Or is this something different? And, you know, maybe it's actually termination for breach, even though it kind of looks like termination for convenience. So we're specialized on this and it allows us to move faster a nd be more accurate. But also we're focused on delivering this data. It's really our only job. And so a lot of customers and organizations don't want thousands of software vendors if they can consolidate under one roof, great. So for us, getting this data into their system of record rather than trying to replace a system, has been really important. So we want to work with their existing CLM Contract Life Cycle Management tool, or if they're just on Salesforce and that's where they store their contracts, We can receive the data from Salesforce, we can send it back. That makes it a lot more efficient and accessible for the rest of the team. You don't have to have folks switching platforms or logging into a different tool or learning how to use a different tool. The data's already sitting where they want it to fit and where they can make the most use of it. So that's why we're focused solely on just being contract intelligence, closing the data deficit and delivering that data to. I didn't mention Microsoft Word, but we do work with them. We have a word add in. That's where a lot of attorneys and contract managers review contracts. So the data needs to be delivered there. That's where they can make the most use of it.

Play the King: 12:37

So there's this concept of the job apocalypse, right? Where it's usually in reference to like less skilled labor, right? It's, you know, truck drivers, someone who you know, is going to lose their job to a machine or a computer i'm wandering if you get asked about this quite often, I wonder what you say about it. It seems like a societal problem less than a specific company problem. You can see in each instance why a safer driver or someone who's less exploited. A machine being less exploited would would be a good thing. Overall though it could create some complex situations for societies. How do you think about that? What is your role as a company that does AI here?

Jordan Ritenour: 13:19

We did use to get that question a lot. I think people, legal professionals have realized, okay, there's a long ways to go before getting completely replaced. So I think part of that realization is like, yeah, AI is great for specific purposes, but it can't yet replace the experience and kind of intuition that or an experienced attorney would have. So what we're focused on is, is delivering that data, making their job easier, and does that mean that maybe legal teams don't need to hire as often or as frequently? Maybe they can do more with less certainly, but obviously that that's the case for any new technology that folks get more productive. You need fewer of them to do the repetitive and simpler less complex tasks. But with that, new jobs are always created, right? So when we first started legal operators or legal operations, was pretty new. And now it's just, I don't know, I don't have exact data on this, but I'd say 10 x increase in the number of employees who would call themselves legal operations or legal operators. And that's really driven by this idea that, okay, legal teams need to get more data driven. We need to make use of the data that we have. And so while there may be, contract specialists, maybe I'm making that up a little bit, that role has been shifted now to maybe a hybrid contract specialist, legal operator role. And yeah, i t's, I guess it's something we think about too, because you don't want to have a negative effect on society, obviously. It's an interesting time for every industry a s more things get automated and you can do more w ith less. And I, I think my personal opinion is we're kind of on that edge where some jobs have been removed. You c ould think about horse and buggy drivers right at t he, the turn of the 20th century. As cars became more widespread, horse stables probably needed to employ fewer people. But we haven't yet gotten to the stage where a a ton of new jobs and new professions have been created around this new industry yet, and I personally, I'm I'm looking forward to a lot more jobs in space. I think that's the next exciting thing anyways.

Play the King: 15:49

Yeah, just the problem of progress, right? Creates change. You started off by telling us about how you w ere, you know, a law student working at a technology firm. I don't know if you went back and ever practiced law or if you said, Oh, light bulbs going off, I'm gooing to do this now. What have you learned about starting a technology company that you'd wish you'd known from the beginning? And maybe, do you wish you'd been a junior product manager at a tech firm? Would that have set you up better than, than going to law school and, you know, learning about the constitution? I guess<laugh>?

Jordan Ritenour: 16:23

Yeah, that's a good question. I guess I have thought about that a little bit. I did say earlier law school was great education and great experience. It's definitely not for everyone. If you don't really want practice law, I'm not sure law schools a a great decision financially, it's a very expensive, I do not regret it. I get to wear that hat for my current role. I do a lot of legal contract work. I am a licensed attorney and I talk to attorneys all day. So it has been really good for me.

Play the King: 17:03

What is the thing that annoys you as a tech founder the most about lawyers and what annoys you the most as a lawyer about tech people? What strengths do you wish lawyers could take from<laugh>? Techos is maybe a nicer, more positive way to put it.

Jordan Ritenour: 17:16

<laugh>, well, I guess this is a strength, right? The law school teaches you to be an issue identifier, an issue spotter. So, you know, you read some old case and you have to spot the issues that the judge thought was, or the justice thought was important in deciding the case, right? And how they think about that and what pros and cons did they weigh. So you're really good at issue spotting. And I would say that's a very useful and powerful skill. When you are a customer or prospect or a potential buyer of new software. It can be tough right? To overcome some objections because we've had a few conversations where the attorney may say something like, I had this thing like 10 years ago where we had to do this X, Y and Z, does your technology handle that? I kind of have to think like, wait, so you, you had this issue once in 10 years and you think AI is, is gonna solve that problem for you? And the answer is no. We have it run across that yet we, we don't have any experience with that. So no, we do not solve that problem. And I think it's the personality type, right? I'm sure they're in every field. I think law school gets you very good at spotting and remembering every issue<laugh>. So, that can be a challenge sometimes.

Play the King: 18:46

Yeah. those two worlds are so interesting to me. One seems really rigid and the other seems really, really loose. And so the fact that you are able to sort of have a foot in both of those worlds is really interesting to me. And I'm observations on one to the other, you know?

Jordan Ritenour: 19:04

Yeah. I think this is more of a overall comment. There has been a lot of disappointment in legal tech. There have been some famous blowouts companies have raised a lot of money and not really delivered value. So it works both ways. I I think that it jades the potential customer base, legal professionals and it also makes the investment community a little jaded. But with that said, there are a ton of businesses that are doing really well in legal tech, growing quickly, getting user adoption. I guess one takeaway would be, have some patience, and that was tough for me. But we've had to evolve on what we're doing, how we're approaching the market. We weren't always trying to work with CLMs, but if we didn't have patience, we wouldn't have discovered this new big opportunity for us to really be a data provider of legal language, customers, legal language, their own contracts. So yeah, sometimes it just takes a little longer and you have to learn that along the way. Yeah, patience has been key, I think! It's going to be key for both sides, the investment community and then also, t he legal professionals doing the work.

Play the King: 20:32

Those are two really good answers. I was expecting something a little more Pat and not because you haven't been an insightful speaker, but,those are great answers! I enjoyed that. Jordan really enjoyed talking to you. Why don't you tell people where they can find more about ClearLaw?

Jordan Ritenour: 20:47

Yeah, we have a website, www.clearlaw.ai. We're on LinkedIn and we're goint to be putting out some big announcements here in the near future, with some partnerships that we've signed and we're just getting the marketing messaging ready. So this is a really exciting time for us and thanks for having me today.

Play the King: 21:08

Of course. Yeah, really enjoy speaking with you. Thanks Jordan.

Jordan Ritenour: 21:10

Appreciate it.