INNOVATORS VS COVID 19
Jerry Ting of Evisort on How the Pandemic Accelerated Demand for AI Contract Management
First of all, how are you and your family doing in these COVID-19 times?
Jerry Ting: Thank you for asking. It’s great to be able to spend some extra quality time with family while working remotely. I grew up in the SF Bay Area and am happy to be working with an excellent team that’s continuing to grow and allows me to work near my family.
Tell us about you, your career, how you founded Evisort.
Jerry Ting: I first started thinking about artificial intelligence while working as an undergraduate intern in the U.S. Supreme Court. I noticed how time-pressed lawyers spent thousands of hours organizing, reviewing, tracking, and performing due diligence on legal documents. It was crazy to see the highest court push around bins and bins of paper for evidence. That gave me the idea that AI could make this tedious labor much more efficient, given its ability to quickly parse huge datasets.
I had done a stint working in sales at Yelp prior to law school, where I saw that legal and vendor management teams faced the same problems that lawyers did with reviewing large amounts of data. I realized that if AI could analyze documents in litigation, it could also comprehend complex business contracts. I realized just how cumbersome it was to do legal work with basic software without automation. In my discussions with professors and alumni of Harvard Law, a common thread was that people were spending a lot of time looking for a language, clauses, precedents, dates, and party names in contracts. It really was a manual process.
I teamed up with data scientists from MIT and Harvard lawyers to create an artificial intelligence platform, Evisort. I met my co-founders Amine Amoun and Jacob Sussman, through the Harvard Law Entrepreneurship Project. Jacob was in my class of 2018 at Harvard Law, and Amine was working on AI at MIT. We met Memme Onwudiwe and Riley Hawkins in the 2019 class and invited them to join the team.
The Harvard Law community helped us get the business off the ground in the early days. With the Entrepreneurship Project’s support, we won some awards in international business competitions that helped us get recognized. With support from mentors and deans at Harvard Law, we had an opportunity to showcase our software to corporate and public sector lawyers, such as staffers from state attorneys’ general offices. This was immensely helpful in shaping our product-market fit.
How does Evisort innovate?
Jerry Ting: We focus on solving problems that no one else has solved. The legaltech space is chock full of startups and established players offering quite sophisticated solutions for e-discovery in litigation, some with very good AI and machine learning. However, there are far fewer products on the other side of the legal house. Transactional attorneys research, draft, and review contracts, handle large corporate mergers and acquisitions, manage securities offerings, and prepare closing documents for the sale and purchase of the real property.
The data contained in contracts is not only meaningful to the attorneys who draft, review, and process those documents. These data also drive how finance departments bill and send out invoices, how, when, and to whom a sales team would sell a given product or service. They define a given company’s relationships with its suppliers, clients, and employees and, in many ways, underpin and guide day to day decision-making. You can break down a company into its entire value chain by looking at its contracts.
Evisort works for teams from startups to Fortune 100s with complex legal and procurement processes. Both legal and procurement teams are using the same AI-based software we provide. Evisort first converts scanned documents to searchable text—nothing new here. But it’s the next steps that have a revolutionary application for lawyers and purchasers. Using artificial intelligence, Evisort sorts through all the contracts, categorizing them by subject area and type of contract, and identifies provisions within each contract. A whole range of key data is extracted, such as party names, dates, and size of the deal.
Evisort is the first authentic AI that can identify contract type, non-standard third-party clauses, counterparty names, expiration dates, and automatically tie parent to child. We have trained these layers of AI on over 10 million documents, such as NDAs, purchase agreements, and other commonly-used types of contracts. This means it can understand over 230 types of contracts and don’t have to be trained on each individual company’s own contracts. We encourage any prospective user to give us any contract, and we can show them that our AI works right in front of their eyes.
We have also made some key innovations in the computer-vision field of optical character recognition, which is the technology used to analyze images. The biggest challenge we have had to solve is around scanned documents. Many legal contracts are scanned and are actually images, not text, and existing OCR technology has about a 20% error rate. We built new OCR technology that reduced that error rate to a fraction of 20%, and it drastically improved the accuracy of our algorithms.
We got our hands on more than 10 million real-world documents and pretrained our AI to recognize NDAs, purchase agreements, and what have you, out of the box. That means that our customers in legal and procurement can begin using the software from day one of install. The average AI solution available off the shelf often requires seven to ten months of consultant-driven configuration before they can begin uploading live documents from their legal operations into the system. That’s in addition to the cost and time savings reaped by a responsive search. The time savings are important, but even more compelling, we hear from customers and prospects how this tool makes them more efficient at their jobs and frees up time so they can focus on other important jobs that require their attention.
How the coronavirus pandemic affects your business, and how are you coping?
Jerry Ting: We have seen a five-fold increase in demand since the pandemic began. COVID-19 prompted many companies to look for opportunities to cut costs and drive efficiencies. In particular, this has sparked a surge in vendor and lease contract reviews. A recent report from the contract management organization IACCM noted that 56% of member businesses re-evaluated the terms of current and future contracts during H1 2020. This has driven significant demand for our platform, which helps contract and procurement managers identify termination and expiration dates and uncover opportunities to renegotiate or seek discounts. For example, we signed up several new customers after they missed a supplier’s auto-renewal clause and recognized the importance of automating this process.
COVID also prompted companies to bring contract management and review work in-house as a means of cutting third party spend. However, the challenge they faced is that contract management is time-consuming – especially when everyone involved is working remotely. Evisort obviously solves this problem by automating workflows and delivering AI-powered insights in real-time.
Moreover, companies scrutinize their financial commitments more closely: Before the pandemic, legal would only review contracts above a certain value. Now, they want to conduct a legal review of nearly every contract. This has led to a huge increase in workload and demand for automation solutions like ours.
Did you have to make difficult choices, and what are the lessons learned?
Jerry Ting: I think how you lead and what sort of culture you create are key choices in the early days of being a startup. I decided I wanted to emphasize a sense of community in our team so that our first core group of team members would be committed and focused on helping the company succeed. One engineer was among the first 10 hires on our team, and he took a job with a larger Silicon Valley company for benefits that our startup could not offer at that time. It was difficult to greenlight his decision to make the transition, especially when this engineer asked for a reference with his next employer. At this early stage, I worried that someone leaving would reflect poorly on our team. At the same, I knew that I could not offer the benefits of the other employer he was considering. At this time, Evisort had not yet secured enough funding to be able to offer such expansive benefits.
I continued to include this engineer in team dinners with the core group of co-founders and early hires even after this team member started his other role. Another engineer left the startup for Microsoft. This team member continued to participate in team dinners, showing the bond and camaraderie between his coworkers who had become friends. That same team member continued mentor sessions with senior management and asked senior managers to dinner beyond the established team dinners.
What I learned from this experience is that culture can’t be forced. You need to actually feel an identity of belonging, affiliation, and shared identity. This is an indicator of why it’s so hard to build a healthy team culture. We’re lucky we have a lot of nice people working at Evisort.
How do you deal with stress and anxiety?
Jerry Ting: I Iove going on jogs. I recently moved to a new neighborhood in San Francisco, and the hills make it even more fun. I also love hiking around the Bay Area and eating a lot!
How do you project yourself and Evisort in the future?
Jerry Ting: Once customers see the impact Evisort has on streamlining their contracts, they quickly start to roll it out to other divisions and departments. A focus for our growth is continuing to deepen relationships with F500 customers and household name brands such as Microsoft, Jelly Belly, Fujitsu, Cox Automotive, and others, and to expand from legal to procurement, sales, and revenue operations. With new customers, we have seen strong demand from the tech sector, financial services, insurance, pharmaceutical and healthcare, and real estate and are focused on expanding our footprint in those sectors. Key hires this year, such as Silicon Valley sales veteran Mark Stephenson, who joined as Chief Customer Officer and Head of Sales, are part of this strategy. We also continue to build on strategic partnerships with ALSPs (Alternative Legal Service Providers) as part of our go-to-market.
Digital transformation is a major driver of our business. Enterprises are digitizing every process in order to reap efficiency gains and extract data-led insights. The contract management process is the latest to be automated as businesses realize the value of the intelligence sitting in their contracts. The pandemic has only accelerated this. With the introduction of our Contract Workflow tool earlier this year, we now provide an end-to-end platform that serves every department’s contract needs. As our investors at M12 put it in our December 2019 funding round: “Evisort is creating the new command center for the operations team for mid- to-large enterprises.”
Who are your competitors? And how do you plan to stay in the game?
Jerry Ting: We see analytics companies focused on AI and some next-generation contract management companies as our peers. Our difference is in the power of our authentic AI. We’re seeing incredible demand from existing and new potential customers. As soon as companies see our solution in practice, they recognize the difference and quickly expand to other departments.
In addition to our core product offerings, we are working closely with our customers to coach them and help them optimize the benefits of the automation we bring to their teams’ operations. Getting a digital contracting product off the ground is not hard. The hard part of implementing a new technology that affects processes and people is running a change management agenda. That’s the real investment—and where it’s important to partner with a vendor who can guide you through this process.
Your final thoughts?
Jerry Ting: While the primary application of our AI is the end to end contract management, we are really an AI company. We used our Series A funding to invest in training our AI, so it’s unparalleled in its ability to recognize the use cases customers in a range of different types of businesses are asking about. We’re continuing to invest in the Evisort AI Labs (our AI R & D team) and explore new ways to help businesses apply our authentic AI. We’ve hired across every department in 2020, as we see this tremendous surge in leads and interest in using our product.
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