Neil Peretz has served as general counsel of multiple companies, as well as a corporate CEO, CFO, and COO. Outside of the corporate sphere, he co-founded the Office of Enforcement of the Consumer Financial Protection Bureau and practiced law with the Securities and Exchange Commission and Department of Justice. During the prior recession, Neil represented GNMA in mortgage bankruptcies, Medicare in hospital bankruptcies, GSA in real estate bankruptcies, the FCC in telecom bankruptcies, and many other federal agencies. He helped co-found Contract Wrangler, which applies attorney-trained artificial intelligence to identify the key terms in a wide variety of business agreements. In this interview, he talks about what his solution has to offer, how it relates to existing SAP systems, and what’s next for the company.
E-3 Magazine: What exactly does Contract Wrangler offer?
Neil Peretz: Contract Wrangler is a contract performance platform. Traditional contract management systems (sometimes called CMS or CLM) have focused on authoring and e-signing contracts and then storing them. What CLM and CMS platforms miss is that the true economic impact of a contract begins after it is signed, when both parties have rights and obligations that require attention across their respective organizations. Simply expediting the negotiation and signing the contract does not help companies carry out the agreement and maximize the value from it. You need the contract performance system to do that.
A contract performance system learns what is in all of your existing agreements and then triggers workflows across your organization to the relevant departments needed to carry out the contract elements. For example, your ops team needs to know how much advance notice it is supposed to provide customers before a scheduled downtime of your system. That detail is spelled out in your customer contracts. Likewise, your financing needs to know the time limit for exercising audit rights with key suppliers or else they will lack recourse when they later discover they received an incorrect invoice. The foremost challenge creating a contract performance system is in understanding the thousands or tens or hundreds of thousands of agreements that your organization already has in place. A contract management system cannot help with that because it simply presents a static database that relies upon you rereading all of those thousands of agreements, finding the key terms, extracting them, and then notifying the relevant team members in your company. Contract Wrangler has developed a touchless, end-to-end platform where contracts are inserted in the beginning and workflows automatically are triggered in the end. Many of these workflows run through SAP systems.
How does your solution work?
Peretz: Contract Wrangler applies attorney-trained machine learning models to reading legal contracts. At present, Contract Wrangler has over 900 models, with each one tuned for a specific business term (e.g. mutual indemnification, effective date). Contract Wrangler employs a team of highly trained in-house attorneys who utilize proprietary software to verify and validate all of the results of its machine learning so clients can rest assured they are receiving a complete and accurate answer about each and every one of their agreements. Once each contract is analyzed, clients can access reports and alerts about the agreement to the Contract Wrangler platform, as well as establish workflows and assign owners across their organization. For workflows that stretch into other functional areas of the company, Contract Wrangler can push data into procurement systems like SAP Ariba, CRM systems like Salesforce, and human resource management systems like Workday.
Do customers need special technology to use your solution?
Peretz: Contract Wrangler takes pride in offering an end-to-end system that requires no external hardware and can be up and running for the client in less than 30 days. During onboarding, clients share with Contract Wrangler the key business drivers that they want to control and then Contract Wrangler gets to work identifying the relevant terms in business agreements that are dragged and dropped into the system by the client. Contract Wrangler can also automatically load business agreements from other enterprise systems used by the client.
Why did you start Contract Wrangler to begin with?
Peretz: I started Contract Wrangler in 2016 because we frequently encountered instances in the growth of the company where money was being lost or unnecessary risks were being taken in an established business relationship due to a lack of understanding or memory of the key contract terms. This problem became particularly acute when engaging in financings and mergers-and-acquisitions activities, where we would often be asked to make representations about every single contract the organization had ever signed. To solve the problem, I naturally started to look at contract management systems and was shocked to discover that none of them would help me solve this problem because they would not read my existing agreements for me. Instead, even if I purchased a contract management system, I would still need to hire a large number of attorneys to read my thousands of agreements and find key terms and load them into the contract management system. I decided that there should be a better way and, with enough training and quality control by very experienced attorneys, machines could help make the process more accurate and faster.
How could your solution potentially help customers navigate the COVID-19 pandemic and the different challenges of reopening?
Peretz: We have had many clients reevaluating their key business relationships during the pandemic to see whether their contracts provide a force majeure clause or other basis for termination or renegotiation. Contract Wrangler enables them to conduct this analysis with the push of a button. For instances in which our clients have been hampered in delivering their services or goods, they also use Contract Wrangler to assess what limits of liability apply to their customer and supplier relationships.
How are you connected to SAP?
Peretz: SAP delivers some of the most critical business systems for procurement and finance. These SAP systems are often used to store contracts; however, they cannot read the actual agreements and find the key terms. By connecting SAP systems to Contract Wrangler, we help clients bring their store contracts alive and trigger subsequent workflows, such as a new procurement process when a supplier agreement is going to automatically renew or expire.
How has SAP.io’s involvement impacted your journey?
Peretz: We were privileged to participate in the SAP.io Foundry Program in San Francisco so we could get an insider’s view on SAP’s enterprise software roadmap and how we could add value to its clients in a complementary manner. We also established key relationships with important insiders at SAP, such as heads of data science and product management, that we collaborate with on integrations.
What’s next for Contract Wrangler?
Peretz: Contract Wrangler has been growing at a rapid pace, even during the pandemic. We are fortunate that existing clients continue to expand their usage of Contract Wrangler, in terms of number of users, number of agreements loaded, and frequency of logging in and creating workflows. At present, our largest groups of clients are in the fields of technology, financial services, real estate, healthcare, and manufacturing. We plan to expand to additional sectors and connect to even more enterprise business systems during the coming year.
Thank you for the interview.
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