On the latest episode of Risk Management: Brick by Brick, Jason Reichl is joined by Josh Levy, Co-Founder and CEO of Document Crunch, a contract intelligence platform for the construction industry. Josh has a strong leadership background with expertise in construction law, co-founding Document Crunch to bring his expertise to the field.
In this episode, Jason and Josh discuss the world of contract management and reviews in construction. They delve into what Document Crunch offer for risk managers, how we should all be approaching contracts, and the potential for AI in assisting in document reviews.
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Approaching Contracts
For many risk managers, approaching contracts is like stepping into the unknown. Where are you meant to start? What should you look for? How will you know if the contract is right for you?
Well, according to Josh, the way you should approach them will depend on your specific role as a risk manager, but there is a framework that is applicable to most construction companies, breaking it down into several questions: “What is the true risk profile of the project? How much of that is insurable? Is the insurance that they're asking for even reasonable? And how does all of that relate to the fees, both for the profit that you're taking on, the scope of work that you have, and frankly, like what you're charging for the insurance portion of the project.”
Even with a framework for approaching individual contracts, it’s easy to get overwhelmed with individual contracts for each vendor. You may wish to categorize your accounts, and work with contract templates to make things easier.
Unfortunately, it just isn’t that simple. If you’re working upstream, you’re never going to be able to categorize contracts because you’re at the owner’s mercy. However, if you’re only working with subcontractors and vendors then you’re in for a treat: Josh says that categorizing your contracts is exactly what you should do.
What About AI?
Now you know how to approach and manage your contracts, you may be wondering if you can make it simpler still… perhaps with the use of AI.
Sorry to burst your bubble so soon, but we’re not going to be able to use the likes of ChatGPT any time soon to help us out. As Josh says, there is simply too much room for error in open interfaces, particularly when you consider the nuanced nature of contracts.
But, he doesn’t stop there. It turns out that Document Crunch are now building AI technology into their proprietary models to assist in document reviews. He explains, “We're very good at identifying issues and contracts and providing contacts around them. And then when you put the LLMs on top of that, it's super powerful. And it really allows you to level up. But I think that this technology is incredibly powerful, but it also could lead you up incredibly astray if you don't have the right subject matter expertise going into it and you're left to your own devices.”
To find out more about contract management for risk managers, tune in to this episode of Risk Management: Brick by Brick.
Apple: https://apple.co/3smp5fG
Spotify: https://spoti.fi/3Mw03ld
