In the rapidly evolving landscape of legal services, the traditional approach of selecting outside counsel based on familiarity and instinct is becoming outdated. Otto Hanson, the visionary co-founder and CEO of TermScout and Screens, advocates for a more strategic, data-driven method during his recent discussion on the podcast “Notes to My (Legal) Self.”

Starting his career in the demanding environment of a large law firm, Hanson quickly identified the inefficiencies in traditional legal practices, particularly in contract review. His experiences led to the founding of TermScout, a platform designed to review, benchmark, and certify contracts to streamline legal operations.

Building on the advancements in AI technology, Hanson introduced Screens, a platform that allows legal teams to create AI-powered contract playbooks. This innovation enables lawyers to encapsulate their expertise in a scalable form, transforming contract review from a bottleneck into a strategic asset for businesses.

Hanson highlights the pitfalls of instinctual outsourcing, where legal teams rely on well-trodden paths and legacy relationships. This often results in inflated costs, prolonged deal cycles, and outcomes that may not align with current business objectives. He challenges legal departments to adopt a risk-complexity matrix to categorize and allocate projects more effectively, ensuring that spending aligns with the actual needs and risks involved.

TermScout addresses another critical aspect by offering a certification layer for contracts. This feature allows companies to demonstrate that their contracts are not only legally sound but also fair and reasonable according to market standards. By doing so, TermScout helps shorten deal cycles and build trust with partners.

Despite the promising integration of AI in legal processes, Hanson acknowledges a "trust gap" due to the lack of contextual understanding by AI systems. He suggests that this gap can be bridged by integrating AI tools with human expertise, allowing for nuanced and informed decision-making.

For legal teams ready to shift from reactive measures to proactive strategy, Hanson advises starting small—utilize a free trial, build a playbook, or certify a single contract. These initial steps can pave the way for significant improvements in efficiency and strategic value.

As legal teams face increasing pressure to support business objectives efficiently, embracing technological solutions and moving away from instinct-based decision-making could well define the future of legal practices. Hanson’s insights offer a roadmap for transforming contract review into a powerful tool for business growth and innovation.