53: Contracts and Knowledge-base Building with Jake Sussman (Part 2)
Jake Sussman studied law in Harvard and was all set for his career as a lawyer in one of the big law firms when he discovered that he could use artificial intelligence to solve one of the biggest pain points for lawyers, and make a lot of money at the same time. This revelation lead to his start-up, Evisort, a company that uses artificial intelligence to extract key data and legal terms from contracts.
In this episode, Jake takes us on a guided tour of business contracts including how and when to set them up, the key business and legal terms and the importance of filing and storing your contracts. He also shares his struggle of bringing his team from five employees to thirty in the past year, and the solutions he came up with to improve and speed up the onboarding process.
Teaser:
My Guest: Jake Sussman
Jake is the Co-Founder and COO of Evisort, a startup using artificial intelligence to extract key data and legal terms from contracts. Jake has previously worked at The Boston Consulting Group, Simpson Thacher & Bartlett, and in private equity. Jake received his J.D. from Harvard Law School and his B.S. from Rutgers University. Most recently, Jake and the Evisort team were featured in the Forbes annual 30 Under 30 for Law & Policy.
More generally, my path isn’t exactly a straight line. I dropped out of high school when I was 15 and worked part-time while making some money selling items online. After a while, I decided to attend community college because the path I was on didn’t seem to be a very good one. I attended community college performed while, and ended up transferring to Rutgers and then attended Harvard Law School.
Pivotal Moments:
Studied law at Harvard Law School, with the intention of following the clear cut, easy path to becoming a lawyer at one of the big law firms.
Started talking to lawyers and realized that a big pain point for them was searching for technical language inside contracts.
Realized that he could make a lot of money if he developed an algorithm that would solve this problem.
Stopped just short of qualifying as a practising lawyer and created his start-up, Evisort, to develop artificially intelligent systems that search for data inside contracts.
Currently, Jake is in the process of huge expansion at Evisort. In the last year, he upped his employees from about five to thirty and has just secured a $4.5 million funding investment from existing investors and new ones.
The Advice:
Sales and Systems
All businesses need to have sales and systems in order to be effective. Often someone who is good at sales will not be good at creating and maintaining effective systems and managing business processes, or vice versa. In this case, bringing in a partner to be either the CEO or the COO can be the key to business success.
However, when bringing in a partner, there needs to be clearly defined roles to avoid stepping on each other’s toes. One role will include managing sales, being the visionary, developing and growing the business. The other role will involve managing the internal operations, creating processes and protocols, and managing day-to-day operations.
Creating Contracts
If you are cutting a deal with someone, don’t be afraid to ask for a contract. Contracts are extremely valuable, not only to avoid any future complications but also because:
- Contracts set clear expectations of what each side will receive and provide.
- Contracts can act as a great client filter. Anyone who won’t sign a contract or makes unnecessary complications when agreeing on a contract will often not be a great client.
- Creating a contract shows that you are serious and professional.
Filing Contracts
Make sure to file all your contracts right from the beginning of your business. This includes everything from contracts with clients, staff and vendors, to subscriptions for online programs or software.
It’s important to keep your contracts in one place for two reasons:
- So that you can find them when you are looking for them.
- So that you can keep track of what contracts you have and when or if they renew. You can also keep track of your contracts by creating an excel sheet with all your contracts and plugging any important dates such as renewal dates into your calendar.
Contract Do’s and Don’ts
Do Not
- Start creating a contract by asking a lawyer to write one for you, because you want it to be written in plain English and not law jargon.
- Write your contract yourself from scratch because it will most likely end up a mess of text that doesn’t make sense.
- Send or sign a contract that you don’t understand.
- Remove clauses from your contract unless you are completely certain that they are not relevant anymore. You never know when something might come up again.
Do
- Use a template to begin creating your contract (see Resources and Links). A template gives you an idea of what to include and can bring up clauses that you didn’t think of.
- Make sure that the language of the contract makes sense and is understandable to an average person.
- Try to learn from other people’s mistakes, adding clauses into your contracts appropriately.
- Pay more attention to the business terms of the contract than the legal terms.
Business terms include:
- When the contract starts and ends
- If and when the contract renews
- Payment terms: who is paying who, how much, when, and how they are paying.
- Deliverables in return for payment
- Pathway for increasing the value of the contract
Legal terms include:
- Limitation liability- A cap on the amount payable if something goes wrong.
- Indemnification- Amount of compensation if using the product or service leads to problems or harm for the customer.
- Confidentiality- Agreement to keep certain details private.
- IP Ownership- Clarification of the ownership of technical components of a product or service.
- Dispute Resolution- How and where disputes will be resolved.
The Struggle:
Jake is currently in the process of scaling his business. Part of the growth process involves delegating most of his previous tasks to new employees. In under a year, Jake hired twenty-five new people to take responsibility for tasks that had previously been part of his role. The onboarding process for all these new people has been a difficult journey. A year ago, Evisort was a less formal company internally, with very little of their processes and systems documented or formalized. Jake now needs to figure out how to document his processes so that he can hand over tasks and responsibilities in the clearest and most efficient way.
The Breakthrough:
To help with the documentation of processes, Jake invested in Notion, an internal knowledge base tool. Notion allows each department to have a designated place to store their documented process. This means that new employees can be directed to the knowledge base and will know where to look for information that they are missing.
When documenting processes, Jake also takes care to not only explain what the process is, but also why it is done, and who does it. He has also started creating timelines of what processes look like to help with the onboarding process.
Resources & Links:
- Find Jake on Social: LinkedIn
- Find Evisort: evisort.com
- Knowledgebase tool: Notion
- Contract Template Resource: Cooley GO
- Recommended Book: Short and Happy Guide to Business Contracts
- Work with Estie: www.strandconsulting.net
- Join us on the Show: www.estierand.com/breakthrough
For Part 1 of this episode, where you can hear about Jake’s journey and the revelation that lead him to create his start-up, go to estierand.com/53-1
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