Almost exactly one year ago, a new legal tech startup, The Contract Network, came out of stealth, with a mission to “radically accelerate the time for contract negotiations” through an AI-powered contract collaboration platform where all parties to a deal engage in a secure and neutral environment. The company’s cofounder and CEO, Jim Wagner, is a legal […]
Last May, I reported here on the emergence out of its stealth development phase of The Contract Network, whose goal is to “radically accelerate the time for contract negotiations” by providing an AI-powered collaboration platform that can be used by all parties to a transaction to more quickly “get to the point” in their negotiations.
Notably, the new company is led by CEO Jim Wagner, who has a track record of starting successful legal tech companies, and it came out of stealth having already partnered with the Mayo Clinic to build a solution to accelerate the negotiation of clinical trials agreements.
Now, The Contract Network has announced that it has raised $8 million in seed funding to further develop its AI-powered contract collaboration platform. The round was led by Tusk Venture Partners, with participation from Andrew Sieja, the founder of Relativity, The Legal Tech Fund, Mayo Clinic, Toba Capital, and GC&H Investments, an investment fund associated with Cooley LLP.
Tusk is a venture firm that invests solely in early stage startups in highly regulated industries. Cofounder and managing partner Bradley Tusk was political advisor to Uber in its early days, helping it navigate the regulatory process in key markets.
That background is critical, Wagner told me, because of the issues that lie ahead for the legal industry as artificial intelligence is more widely adopted. “He has a real appreciation for some of the challenges we as a company face and we as an industry face,” Wagner said.
Another of the investor’s in this round, Toba, was a core backer of Seal Software, where Wagner was president until DocuSign acquired the company in 2020. “They understand contracting, they understand contract AI, and they’ve been in it for the long run,” he said.
The company will use the funds raised in this round primarily to further develop its product, Wagner told me, so that he can get customers using the system and seeing its value.
“If we can do that, the go-to-market and the rest of it will take care of itself,” Wagner said. “We have to get people to really get value out of the product and to be in a position where they’ll say, ‘Yeah, if we had a chance to do this again, we would do it for sure and we encourage others to do it.'”
When I spoke to Wagner in May, the Mayo Clinic was live on the platform and he was aiming to get others live on the system by early summer. This week, he said that a number of users are now in the system, actively using it to negotiate agreements. They include a major pharmaceutical company and a private equity firm.
By next month, he expects to have the system become commercially available and customers paying to use it. For now, the two primary areas of market focus will be clinical trials and private equity, he said.
As Wagner told me in May, “The concept behind the business is that B2B contract negotiation takes too long, and that businesses need a platform where both sides can collaborate to get deals done faster and to manage their compliance obligations.”
The Contract Network says its platform works by parsing out contracts into their individual clauses, turning agreements into “data from the first draft,” against which it uses generative AI to provide context and market insights for each change and redline. Stakeholders can collaborate on contracts in real-time and with full visibility into every change that is made with AI-powered translation from legal jargon to plain language.
The Contract Network works in concert with existing contract lifecycle management (CLM) platforms and also connects to the various software silos that typically exist in a typical contract negotiation.
Wagner was the cofounder first of DiscoverReady and then of Apogee Legal, an enterprise contract analytics platform. In 2018, Seal Software acquired Apogee, after which Wagner became president of Seal. In 2020, Seal was acquired by DocuSign, where Wagner became vice president of agreement cloud strategy. Since 2021, he has been founder and managing principal of Lean Law Labs.
The company’s partnership with Mayo on clinical trials was an ideal use case for the company to start with, Wagner told me in May, because so much is at stake in developing new medical treatments. Even so, the negotiation processes for clinical trial agreements are complex and time-consuming, leading to significant delays in the launch of clinical trials.
“The clear real-world application and need for an AI-powered collaboration platform is what attracted us to The Contract Network,” Jordan Nof, cofounder and managing partner of Tusk Venture Partners, said in a statement. “This platform will completely transform how businesses come together to get deals done faster across a wide variety of industries, also saving time and money as a result.”
Sieja, Relativity’s founder, said: “The Contract Network has enormous potential to fundamentally change how contractual agreements get done to save time and money while preserving the goodwill between parties. Its innovative approach allows for productive and rapid issue resolution, allowing parties to come to agreement and get to work. This positive impact on its participants and the company’s ambition to build a network serving millions has us excited to be involved.
A new company coming out of stealth today, The Contract Network, aims to “radically accelerate the time for contract negotiations” by providing an AI-powered collaboration platform that can be used by all parties to a transaction to more quickly “get to the point” in their negotiations.
It is led by CEO Jim Wagner, who has a track record of starting successful legal tech companies, and it has already partnered with Mayo Clinic to build a solution to accelerate the negotiation of clinical trials agreements.
“The concept behind the business is that B2B contract negotiation takes too long, and that businesses need a platform where both sides can collaborate to get deals done faster and to manage their compliance obligations,” Wagner told me.
Wagner was the cofounder first of DiscoverReady and then of Apogee Legal, an enterprise contract analytics platform. In 2018, Seal Software acquired Apogee, after which Wagner became president of Seal. In 2020, Seal was acquired by DocuSign, where Wagner became vice president of agreement cloud strategy. Since 2021, he has been founder and managing principal of Lean Law Labs.
Together with cofounder Bill Murphy, former chief technology officer at Blackstone, and others, Wagner has been developing the platform in stealth mode for over a year.
The company announced its Mayo partnership April 11 and is formally launching today. Mayo is also an investor in the company.
“We’re excited to get underway and tell the world what we’re doing with more detail, start showing the product to a lot of folks, and start the process of getting folks early access,” Wagner said. He expects to get others live on the system by early summer.
Wagner said that clinical trials were an ideal use case for the company to start with because so much is at stake in developing new medical treatments but the negotiation processes for clinical trials agreements are complex and time-consuming, leading to significant delays in the launch of clinical trials.
“We envision a world where businesses collaborate with respect to their agreements seamlessly, achieve outcomes faster, and share vital information, deadlines, and milestones without friction,” Wagner said in announcing the Mayo partnership. “We are incredibly proud to make clinical trial agreements the first use case for our collaborative platform and to have the opportunity to play an integral role in promoting growth and innovation in such a meaningful context.”
In an interview last week, Wagner said his career has shown him that many of the problems with contracts need to be solved before the contracts get signed, because once they are signed, “it is quite an effort to put Humpty Dumpty together again from an operational and compliance perspective.”
As Wagner described it, The Contract Network (TCN) platform is a collaborative environment where all parties to a contract negotiation can participate. In this way, it addresses three issues that other contracting tools fail to address:
Wagner said that platform is not designed to compete with the glut of CLM products on the market or everything those products do with regard to the contracts workflow and lifecycle.
“But when it comes time to publish that agreement to a counterparty, we’re saying, ‘Wait a minute. Instead of just sending it out into email and starting this red line rut, why don’t we have a place where the parties can go to get deals done?’ And that’s the platform that we’re building.”
In what Wagner describes as Moneyball for contracting, the platform will also deliver market data about what is being done in other negotiated contracts from within the network, as a way of providing transparency. “You’re asking for an insider trading restriction in this nondisclosure agreement. The transparency is, that only appears in 12% of all NDAs in this context. We think that market data is invaluable.”
While TCN is launching with its partnership with Mayo Clinic to tackle clinical trials agreements, Wagner said there are a number of areas in which parties are stuck in a sort of Groundhog Day of repetitive negotiation cycles, including mergers and acquisitions and commercial real estate.
During our interview last week, Wagner gave me a preview of some of the platform’s key features, including AI.
To start a new negotiation, the user can either upload a draft creating using a different CLM platform or by using templates stored within TCN. But from the first draft forward, Wagner says, TCN treats the key points of the agreement as data.
“Even though it looks like we’re working on a traditional agreement, in fact, any point that is likely to be negotiated, and point that has to be managed proactively from an obligations management perspective, we’re going to have made that point data from the first draft.”
Every time a party to the negotiation makes a change in the draft, the other party is notified of the change and also provided with a summary created by generative AI. “Every time we pass the agreement back and forth, every change that happens is now captured with AI and we’re going to give you a summary of everything that changed.”
Although not yet live as of my demo last week, Wagner said the platform would also be able to provide generative edits to drafts.
TCN calls its approach “AI for everyone,” reasoning that it makes no sense to have one party using advanced technology and the other left to antiquated approaches.
“If you’re negotiating on The Contract Network, you are going to have the right tools at your disposal, including the latest in artificial intelligence, at every step of the process,” the company says.
At the conclusion of a negotiation, TCN will ask each user if they would like to save the decisions that they made from the negotiation and create a profile. This profile effectively becomes a playbook, but one, as Wagner put it, that is embedded in the negotiations and that is inferred from the user’s actions, but that the user can then update and modify.
Wagner calls it making language part of your déjà vu. “Every time you’re negotiating, you have the ability to layer onto your profile to make it more and more robust, more effective, so as you use The Contract Network more, you see fewer and fewer new things.”
While different parties do not have access to each other’s profiles, they do both get essentially the same view of the agreement being negotiated, They can each make changes and comments via the platform or simply give thumbs up or thumbs down to specific clauses.
Given that the platform requires both parties to participate, I asked Wagner if he sees that as a hurdle, in that one party may want to use the platform while another may not.
That is a challenge, he acknowledged, but he said they are addressing it by offering so many incentives for parties to participate.
“You’re going to have data from the first draft, you’re going to have collaborative obligations, management and contract compliance in a way that you simply won’t otherwise have, and you’re going to get to your agreement significantly faster than being stuck in the traditional red line route.”
Also, there is no charge to counterparties who are invited onto the platform as guests. They are able to come on and negotiate the agreement and get all the platform’s benefits at no cost.
“From the very first time that you touch the application, you’re going to have market data that you and no one else has ever had. From the first time that you touch this, you’re going to have data from the first draft in terms of your contract compliance. And now you’ve got every date-deliverable deadline, you’ve got all of those things available to you from the first draft. So we’re very focused on how we can get counterparties to come in and say, ‘You know what, this is actually a worthwhile experience for me. I would love to be a part of it.'”
Much of the funding for the business so far has come from Wagner and his cofounder. In addition to the Mayo Clinic, The LegalTech Fund is also an investor, as are a number of individuals who include leaders of major legal tech businesses, Wagner said.
Other executives joining Wagner and Murphy at TCN are Phil Richards, most recently the cofounder and CTO of Clairvoya (sold to
JLL-backed Breakwater Solutions), and Bettina Drake, most recently the COO and chief legal officer of eVestment, the analytics arm of NASDAQ.
TCN is currently accepting applications for early access. You can apply or request a demo at thecontractnetwork.com.
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