The mid-sized logistics company Schnellecke relies on lean structures to keep up in the competitive logistics industry. Sascha Klein, LL.M., Head of Corporate Legal, explains in an interview why the management team supports an investment in Legartis' automated contract review solution, what the company's goals are, and what he would like to see for the future of the legal department.
What prompted Schnellecke to push ahead with contract review automation?
Sascha Klein: For us as a company there is a financial pressure to keep up with digitalisation. It’s all about making processes more efficient. As a mid-sized company, efficiency is particularly important for us – not only in our core business, but also in supporting service units. I see great medium-term potential in automated contract review using artificial intelligence, unlike some other technology trends that were hyped in the past but have since failed.
You have already introduced automated contract review for non-disclosure agreements. Now you are planning to extend its use to other types of contracts. From whom did the initiative come – from management or within the specialist department?
Sascha Klein: These topics had been on my radar for a while. Then not long after, a colleague told me about Legartis and their SaaS approach to automatically check contracts using artificial intelligence. We as the legal department immediately took the initiative. The fact that the solution is cloud-based and makes contract review possible within our familiar working environment convinced us. In addition, an implementation project like this with Legartis is uncomplicated and quickly ticked off the to-do list. Of course, all of this helped enormously in getting the project implemented internally.
What are your goals in the legal department and how does automated contract review help you achieve them?
Sascha Klein: Our most important goal is clear: we want to improve efficiency and enable departmental staff to review selected contracts themselves. But we are aware that we have a long way to go until then and that technology cannot change all review processes overnight.
Another goal is to facilitate the subconscious enforcement of guidelines and internal regulations. With software like the one from Legartis, corporate standards are automatically met. Employees can find out at the click of a mouse which contractual passages are problematic and which internal guidelines they should follow in this regard. This greatly facilitates the enforcement of legal requirements.
Which contracts are best suited for automation?
Sascha Klein: Until now, we in the legal department have run automated checks exclusively on non-disclosure agreements. The results for this are so reliable however that we will extend automated contract review for this type of contract to the specialist departments. We are currently preparing other contracts for automation – specifically, work and service contracts. At this stage, these contract types are very well suited for the use of automation technology.
In the Legartis Contract Playbook (contract manual) we can store legal as well as company requirements. Employees outside the legal department are then guided through the initial check directly in the Legartis Word Add-in and can see whether individual contracts and GTCs of potential suppliers fit our standards.
How would you describe your collaboration with Legartis?
Sascha Klein: We’re definitely communicating at eye level. Legartis is very clear about what the technology can and cannot presently do. For us, it’s a partnership in which our concerns are really heard and where we feel like we can have a say in how the technology is applied. For example, when we had to put the project on hold due to the COVID-19 pandemic, our points of contact at Legartis were very understanding and we were able to find a solution together.
What do you think – what will the legal department of the future look like?
Sascha Klein: I imagine that there will be a platform with a standardised interface (similar to a CLM solution) in which all contract types can be checked, as the artificial intelligence can capture unlimited contract features. So far, its value has reached the double digits, but Legartis will no doubt be able to greatly expand that in a short amount of time. And it would be nice to then have an integrated risk assessment and have the AI show the user what legal risks and consequences are connected with a potentially critical passage.
Sascha Klein, LL.M., is a lawyer and Head of Corporate Legal at Schnellecke Group AG & Co. KG. The family-owned company, with a focus on value-added logistics, employs over 17,000 people at more than 70 international locations. Previously, Sascha Klein was Legal Counsel in Finance at Norddeutsche Landesbank and Associate in Litigation at the law firm Weil, Gotshal & Manges LLP.