Klarna lawyers use AI to draft contracts

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Swedish fintech company Klarna has revealed that its in-house lawyers are using ChatGPT to draft time-consuming contracts, which has “massively” saved time.  

The company’s legal team is using ChatGPT Enterprise, a more advanced and secure tool, to write first drafts of common types of contract. Selma Bogren, senior managing legal counsel at Klarna, explained: “Instead of spending an hour starting a contract from scratch or working from a template, I can tweak a ChatGPT draft in about 10 minutes.”

The buy now, pay later organisation is among other businesses that are embracing AI, with almost 90% of its employees now using the tech to improve efficiency.

The legal team at Klarna appears unanimous in its decision to leverage generative AI as the technology is said to save time that can be allocated to strategic planning and fostering creativity. Bogren said that using ChatGPT is better than using contract templates “because you can create something quite bespoke”. She added: “You still need to adapt it to make it work for your particular case but instead of an hour you can draft a contract in 10 minutes.”

While the use of generative AI can increase productivity and efficiency, the technology continues to pose potential risks. James Longster, partner in the technology department at Travers Smith LLP, explained that “there is still some hesitancy regarding a more general adoption of AI in organisations”, which has arisen from concerns about unauthorised use of personal data, potential third-party intellectual property infringement, and the need to navigate evolving regulations.

The chief executive and co-founder of Klarna, Sebastian Siemiatkowski, states: “As Klarna continues to discover applications for OpenAI’s tech, there’s the potential to take the business to new heights.”

In the wider industry, the number of lawyers reportedly using generative AI at least once a month more than doubled in six months, according to a LexisNexis survey, and Shoosmiths recently published general guidance on the use of AI in its training contract applications.  

Find out more about whether you should be using AI for your law firm applications in The Oracle.