Contractbook’s Alexander Irschenberger has a mantra: “Killing the PDF.”

We recently sat down with Irschenberger to discuss Contractbook, and to learn how his own singular background enables him to see the innovative potential of Contractbook in the landscapes of both law and business.

Mary and Deus: Hi Alex, thanks for meeting with us.

Alex: Hello! Nice to meet you both.

Before we get into what Contractbook can do, could you tell us a little bit about your background before you came to the company?

Yes! I am a lawyer by training but I think I’ve always had an entrepreneurial mindset. I started my first company when I was around 17. Then in high school, I had a law course and loved it, and knew I wanted to be a lawyer. So I pursued my studies in law. Of course, it’s a prerequisite to study law to become a lawyer, but I’m really not a big fan of studying, — it’s not my thing to be honest. But while studying, I was fortunate enough to be a part of a big corporate legal department, which meant that in addition to the theory, legal theory I was getting in law school, I was able to do a lot of practical stuff. So, I travelled around the world and did training on anti-corruption, CSR [Corporate Social Responsibility] and global compliance. I also did training on contract law, and so at this time began to build very early stage contract systems using SharePoint.

After this, I joined a classic, corporate, Tier 1 law firm in Copenhagen, doing M&A transactions [Mergers and Acquisitions], which I loved and found really exciting. I loved my colleagues, loved the challenges you have in a law firm like that. But after four years I wanted to do some new projects, to push the boundaries. I was asking: — ‘Why are we doing things the way we are doing them, just because we’ve done it this way for the last 150 years?’ Soon I realised that law firms are used to being the best at what they do, yet when they go into technology, they’re no longer the best. So, it becomes very difficult to push an innovation agenda. This is when I realised that if I wanted to innovate, I would have to do it from the outside.

At this point a few colleagues and I had an idea for a document management platform in M&A, so we started a consultancy that quickly developed into a quite heavy software company where we built algorithms designed to extract data out of contracts. We later pivoted this service to GDPR [General Data Protection Regulation], where we solved a good number of issues. We sold that company last year.

I knew Contractbook from my early days. My previous company and Contractbook didn’t compete in any way, so we could share knowledge. We thought it could be an amazing idea to get some of the knowledge I’ve built up over the many years with contracts, and match that with the journey Contractbook is on.

What interested you about Contractbook when you joined the company?

One key reason for Contractbook’s current success is that it is not built by lawyers. The foundation was set by two businesspeople having a business problem — so they didn’t over-complicate things. They said ‘Okay, we have this contract issue: I have to do an employment agreement or a sales agreement, so I have to call a lawyer. Or do it the Google way.’ And we know the Google way [of executing contracts] is probably not the best way, especially if you’re not a lawyer because it’s hard to distinguish what is a good contract and what is a bad contract. Knowing this, many choose the Google way anyway because that is the solution they have in that moment. Or you call a lawyer, and that becomes a tad too expensive if you’re a smaller business. Next you have to negotiate that agreement, and then you have to sign it using a signing tool. Using this process you have a bunch of contracts in your email, you sign them, you put it in a Dropbox or worse, on your desktop or in an email, or somewhere. So this is the business problem [contract execution and management].

So, the Contractbook idea was to build a platform — a little bit like Google docs — where you could be on the same document and collaborate in real time, have a list of templates that you can share. The idea is that you also have the signing tool, you have the storage, you have everything within one platform, with no emails. So that was how Contractbook was born.

Photo by John Adams on Unsplash

Contractbook was born from a business need then?

The reason we are successful is that our product solved a lot of problems along the entire [contract] journey, right away. When we launched, we didn’t have the fanciest editor, we didn’t have the fanciest templates, or the fanciest signature tools. But our product worked. It solved the problem A-Z.

What is your main role at Contractbook?

My first task at Contractbook was building the first post-signature product, built by a specialised product team, and which we could build toward as a future goal. For these products, there are algorithms and other fancy things that you can do. But we realised, that is not relevant right now, because they don’t solve a business problem. What businesses really need is way easier: getting a proper contract that is stored in a proper place. So we have taken our work around post-signing tools and created a foundation for the future. Right now we need to solve problems that businesses face right now. This was the vision that I brought: ‘Let’s not make things complicated, let’s solve problems for businesses that have real problems.’

Once these products were set in place, we realised my real pleasure is in the commercial side of the business. So on 1 January I took over all sales and a lot of the commercial efforts, and that’s my role today. I have a little insight into the product and can share my knowledge when it’s needed, but my main task is to ensure we make our revenue targets, and that all our funnels add up in the end as a company.

Since we’re growing quite fast, it’s a good task these days!

Where do you see Contractbook right now?

We just closed two funding rounds: our Series A in November and our Series B in the spring. This is a testament not only to the current success of our company, but also to the focus on “legal tech” in today’s market.

Legal tech is having a moment right now, or as we would call it in Denmark, a ‘hot potato.’ It’s something investors really want to go at. It is in the same place that say, Salesforce was at fifteen years ago for CRM (Customer Relationship Management) systems, innovating with cloud technology. Or at the same place where online payment transactions are now, such as Klarna, who in their latest investment round just a few weeks ago, realised a $46-billion-dollar valuation. My prediction is that legal tech is at that stage now where CRM systems or online payment systems were five, ten, fifteen years ago. That makes this space extremely interesting and active. I think we will not only see investments going into tech companies in this area, but consumers will also be ready.

For example, we see our customers, who are usually not law firms, advisors, or big fortune 500 companies, but instead are businesses with 20–500 employees. These smaller businesses do not have big legal departments, but they acknowledge the legal side of business is important and must be controlled. So Contractbook is there to enable businesses that maybe don’t have any legal capabilities at all. Maybe they just have a COO [Chief Operating Officer], a dedicated administrator, or a contract manager or a single legal counsellor. These types of businesses — we are their best friend in the contract space. We enable them to do contracts in an efficient way, so they can comfortably focus on other things, such as the bigger contracts that need to be negotiated. We help these smaller operations focus on the important parts of their business.

Can you elaborate on legal tech?

When you look at the contracting landscape of businesses, most contracts are standard contracts. That is, confidentiality agreements, standard sales agreements, employment agreements and others. These contracts are often templates with a few variables. If you know you have a proper template, a lawyer is not required. We enable businesses to have simple, efficient contracts.

For example, I see in many of our client companies, I would go as far as to say 96–97% of all contracts are standard agreements in some sense. Meaning that the 3% remaining are complicated transactions and negotiations, and this should be handled by lawyers. And this 3% is where lawyers will provide real value in the future as well. Contractbook can’t replace that. AI [Artificial Intelligence] can’t replace that. Processes can’t replace that. It is in negotiations where you need to be smart about things.

We are not going to take over what a lot of Tier 1 law firms do today. They negotiate complex agreements. I don’t want to touch that.

So essentially, Contractbook wants to take the administration time and costs out of contracts?

We enable a business to run efficiently and smoothly and remove the pain of starting operating without any proper agreement.

Photo by Cytonn Photograph on Unsplash

Does Contractbook provide standard agreements?

These days, as a software platform, there is a big distinction between what you are able to do as a platform provider and how much content clients provide onto the platform. I would say we are a platform provider and not a content provider.

Yes, we have standard agreements on our platforms because we want to offer standard agreements. We make them available for free and you can use them if you want to. But most of our customers’ contracts are their own templates. They set them up themselves, then can have a lawyer review it and modify it to their business.

Can Contractbook access client contracts?

In terms of confidentiality, we cannot access any contracts.

You mentioned that negotiations remain with lawyers, does Contractbook do any advising as part of its service?

We are not set up to provide legal advice to our customers. We believe it is dangerous territory to go into when you start advising or giving recommendations in these cases.

We do have a few collaborations with external lawyers, and platforms for this. In these cases, we provide the technology and the law firms build all the content. This type of collaboration between us and law firms is expanding.

How can Contractbook-built contracts be enforced/regulated?

Today with e-signature, you do not have the same distinction on place-of-execution. You will have an IP [Intellectual Property] stamp that shows you were in England when you signed the contract, yet in the e-signature world this is not something that counts much. From a technological point of view, a place where you are is less important today than it was five years.

In terms of the future, we know many things may happen after completing an agreement, such as a renegotiation. So, we can create notification requirements where we alert the customer that there is an obligation, or some aspects of the contract is expiring and ask whether the customer wants to assign this to a person responsible for the contract. We want to highlight practical things that you would want to handle.

So you can create alerts for changes to contract conditions?

We want to be able to inform the client that you have many contracts in a jurisdiction which has gone through a legal change, or there is instability in a particular jurisdiction. This is what we want to do in the future. But this is not a problem right now.

Tell us about your goal to “Kill the PDF.”

Our first mantra was killing the printer. That was five years ago. Why would you want to print a document, sign it and scan it again? That does not make sense. We kind of succeeded in that..

We want to push the world to something better. The next stop is the PDF. What is the problem with the PDF? A PDF is a static file format that has no data on it. Meaning if you take a Word document and convert it into PDF all history around that document is killed and then you have a PDF. So you cannot do a version history.

So what do we mean when we say we want to kill that? Well, we can’t do that unless we have an alternative to the PDF because a PDF works. You can have a contract converted into PDF and locked. At this point you have killed all the data in terms of version history, so you only have a final version of the document. You do not know what happened. You do not know what the difference is between your standard contract and a PDF that you just created, because you can’t measure it with version history. We think that is not enough.

Instead, our contracts are based on a database. This means that after signature, you still have all the data, searchable, extractable. With our database system, if I want to pull an overview of all employment agreements that were entered into during a given period, I can go in by clicking one button and have a full overview because the data has been stored in the platform from the beginning. And even better, I can go in and pick any contract that is signed, sealed, and locked and be able to see version history. I can go in and see exactly what was changed from the first version to the signature version with two clicks.

We want to kill the PDF because we think it is old fashioned. We do not believe that it solves the needs of businesses today. We do not believe it solves the needs of lawyers today.

How has Covid affected your business?

I do not think that the pandemic did anything bad to us. We are growing at the same pace we did before or even faster. Did it accelerate our growth? I actually do not think so. It was easier for us because we operated a remote culture before the pandemic. We are 100 employees, and 50 of us are spread all over the world, while 50 have their main hub in Copenhagen. All are used to working at home multiple days a week. So, we were already a pretty remote-friendly organisation and we adapted to the pandemic very well.

However, now it is easier for us to get our customers to talk to us over Teams or Zoom. But at the end of the day this did not push the revenues up for us.

Can you tell us about sustainability initiatives at Contractbook?

This is something that is super close to our hearts. Our previous mantra: ‘killing the printer’ went very much in hand with reducing paper usage. Having worked in a law firm before, I think we used almost a pallet of paper every second day because everyone prints everything, and this is not sustainable.

You can always discuss what is going to make the greatest impact on the universe like stopping flying, or stopping paper usage, or using electric cars. But I would assume that no matter how you feel about these things, our opinion is that even if it makes a small impact, do it. A lot of small impacts will have a huge impact at some point. And we want to push that agenda quite a lot. We also plant a tree for every contract signature.

It’s a big part of our culture to be mindful about this and also people. When we hire, do not care about grades or CVs. We care about you as a person. If you have the tenacity and grit that we want to see in the people that work for us, then I am sure you can learn whatever you are required to do and you will do it well. This is not about sustainability, but it connects to what we want to be.

Is social justice a part of the Contractbook ethos?

We also have access to justice features. That is why we have free contracts that may be accessed by small businesses. These contracts are not the best, but they are better than starting from zero. Our contracts provide a nice starting point.

Great, can we speak a little bit about your upcoming projects with qLegal and the CCLS [Centre for Commercial Law Studies] at Queen Mary?

Working with CCLS is very exciting. Legal tech, and how this affects businesses has always been at the heart of Contractbook. There was a shared vision of trying to make the law more approachable in the general sense. I think for a lot of people, the law is something that is seen as cumbersome, very tedious, very difficult to understand if you are not a lawyer. But it does not have to be that way. We want to position ourselves between the business and the lawyer, to support both perspectives.

I think what will go on with Queen Mary is about how to prepare lawyers. I do not believe that a lawyer should be a software developer or should be a technical person in any way. I don’t believe that is where a lawyer will provide value at all. I believe lawyers should be lawyers and know the law. They should know how to interpret it, how to advise businesses and others on legal issues and how to mitigate legal issues before they happen. But also, I believe lawyers should have sort of a basic understanding of what is possible for businesses. How can you use technology to solve some of your legal issues where you never intended to involve a lawyer because it is expensive? You could use Contractbook, or any other solution, to solve these issues and then you will have a legal foundation in your business which is 80% better than zero percent. I want to be part of an agenda that pushes a basic understanding of those very practical business things.

Also, we often talk about legal design. But what does legal design mean under the GDPR? The regulations do not provide a satisfactory definition. Yet regulation does not run a business, technology does not run the business. Businesses solve problems in the world, such as selling milk because people want to buy milk, to connecting systems because you want to keep your data in control. There is a lot of stuff there that is very interesting to go in and to be quite honest, law schools are lagging in. We are doing things like we did 20 years ago, and still not pushing the agenda properly. What I like about qLegal and Queen Mary is that they are trying to push this agenda as part of their education.

This article was written by Mary Rinebold and Deus Mugabe who are participating in qLegal as part of their Law Masters studies at Queen Mary, University of London.

qLegal provides pro bono legal advice to start-ups and entrepreneurs on intellectual property, data protection, corporate and commercial law. See the qLegal website for more details and to book your appointment now. Follow us on Twitter and LinkedIn for regular updates on issues relevant to your business.

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qLegal — Law clinic for entrepreneurs

qLegal — Law clinic for entrepreneurs

We provide free legal advice and resources to tech start-ups & entrepreneurs in the UK, at Queen Mary University of London. @qLegal_ on Twitter and Instagram!