{"id":133687,"date":"2025-09-22T17:03:16","date_gmt":"2025-09-23T01:03:16","guid":{"rendered":"https:\/\/xira.com\/p\/2025\/09\/22\/contract-literacy-is-the-missing-link-in-ai-readiness-says-linsey-krolik\/"},"modified":"2025-09-22T17:03:16","modified_gmt":"2025-09-23T01:03:16","slug":"contract-literacy-is-the-missing-link-in-ai-readiness-says-linsey-krolik","status":"publish","type":"post","link":"https:\/\/xira.com\/p\/2025\/09\/22\/contract-literacy-is-the-missing-link-in-ai-readiness-says-linsey-krolik\/","title":{"rendered":"Contract Literacy Is The Missing Link In AI Readiness, Says Linsey Krolik"},"content":{"rendered":"
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If your legal team is exploring how to use generative AI in practice, and let\u2019s be honest, most are at least testing the waters, the conversation often jumps straight to tools and outputs. Which chatbot should we use? Can we trust it to draft something real? How do we control hallucinations?<\/p>\n

But before you even get there, there\u2019s a more basic question that many legal departments overlook. What are we feeding the AI in the first place?<\/p>\n

In a recent episode of \u201c<\/em>Notes to My (Legal) Self,\u201d Linsey Krolik, a law professor at Santa Clara University and longtime in-house counsel at companies like PayPal and Arm, made a compelling case for what she calls AI literacy. But the bigger insight was between the lines: you can\u2019t use AI effectively in a legal setting without understanding the inputs, and that means contracts.<\/p>\n

Watch the episode here:<\/p>\n

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The AI Moment Isn\u2019t Coming. It\u2019s Already Here.<\/strong><\/p>\n

\u201cWe are using generative AI today, whether we want to admit it or not,\u201d Linsey said during the interview. \u201cIt\u2019s happening. So get on board and we can learn together.\u201d<\/p>\n

That sense of collective learning, and the gap between curiosity and confidence, is something many in-house teams are experiencing firsthand. There is pressure to move quickly, reduce turnaround time, and do more with less. AI promises all of that. But as Linsey pointed out, we need to start with the basics.<\/p>\n

She\u2019s training law students to build real-world legal documents like terms of service and privacy policies for early-stage startups. These students are already experimenting with AI. They\u2019re learning where it helps, where it fails, and how to critically assess its output. They are developing muscle memory not just in drafting, but in understanding why contracts are structured the way they are.<\/p>\n

That foundational skill, contract literacy, is what too many practicing teams are missing.<\/p>\n

AI Is A Mirror. If Your Contract Data Is A Mess, It Will Show.<\/strong><\/p>\n

When lawyers think about AI tools, it\u2019s easy to focus on the output. What can it draft? What questions can it answer?<\/p>\n

But what matters just as much is the underlying data. If your team can\u2019t easily answer questions like \u201cWhat are our standard payment terms across all NDAs?\u201d or \u201cWhich vendor contracts auto-renew in the next 90 days?\u201d then any AI solution you implement will be trying to find patterns in chaos.<\/p>\n

Linsey emphasized that in-house teams are increasingly being asked, \u201cDid you use AI for this?\u201d And when the answer is no, the follow-up is often, \u201cWhy not?\u201d That pressure to explore and adopt is growing. But AI isn\u2019t magic. It won\u2019t clean up your contract portfolio for you. It will only surface what\u2019s already there, or worse, what\u2019s missing.<\/p>\n

Contract Literacy Isn\u2019t Just Knowing Legal Terms. It\u2019s Knowing The Business.<\/strong><\/p>\n

One of the sharpest observations Linsey made during the conversation was about how contract education has evolved. She\u2019s moved beyond traditional legal writing assignments to include things like AI-assisted drafting and short business-style presentations.<\/p>\n

Why? Because she understands that lawyers today don\u2019t just write contracts. They explain them. They negotiate them. They implement them. And increasingly, they design workflows and data systems around them.<\/p>\n

AI can support that work, but only when the lawyer understands what the business needs from the contract. If you can\u2019t articulate the difference between what a procurement manager wants to know and what your finance lead needs to see, no AI tool will bridge that gap for you.<\/p>\n

The Real Risk Isn\u2019t AI. It\u2019s Staying Unprepared.<\/strong><\/p>\n

Linsey acknowledged the ethical concerns around AI, confidentiality, accuracy, and unauthorized reliance, but she also made it clear that the bigger risk is paralysis.<\/p>\n

\u201cThere\u2019s a lot of uncertainty now,\u201d she said. \u201cBut I think we need to start being more curious and less scared.\u201d<\/p>\n

She teaches her students to disclose when they use AI, to reflect on why they used it, and to evaluate the quality of the output. In doing so, they learn how to build trust in the tools and in their own judgment.<\/p>\n

That same framework applies to in-house legal teams. Instead of asking whether AI is perfect, start asking whether your team is ready. Can you explain what your standard indemnity clause looks like? Can you audit vendor agreements for renewal triggers? Do you have a structured way to compare terms across contracts?<\/p>\n

These are contract literacy questions. And until you can answer them confidently, AI will remain a shiny solution looking for a problem.<\/p>\n

Want To Get AI-Ready? Start With Your Contracts.<\/strong><\/p>\n

Linsey Krolik is training the next generation of lawyers to think critically, use emerging tools responsibly, and work directly with the business. If today\u2019s law students are learning to draft, structure, and analyze contracts with AI as a companion, then the rest of the legal world needs to catch up fast.<\/p>\n

AI readiness starts with knowing what you have, what it means, and how to use it. That begins not with software, but with skill. Not with automation, but with understanding.<\/p>\n

Contract literacy isn\u2019t the end goal. It\u2019s the starting line.<\/p>\n

Watch the full interview with Linsey here<\/a>.<\/p>\n

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Olga V. Mack<\/em><\/strong><\/a>\u00a0is the CEO of\u00a0<\/em><\/strong>TermScout<\/em><\/strong><\/a>, an AI-powered contract certification platform that accelerates revenue and eliminates friction by certifying contracts as fair, balanced, and market-ready. A serial CEO and legal tech executive, she previously led a company through a successful acquisition by LexisNexis. Olga is also a\u00a0<\/em><\/strong>Fellow at CodeX, The Stanford Center for Legal Informatics<\/em><\/strong><\/a>, and the Generative AI Editor at law.MIT. She is a visionary executive reshaping how we law\u2014how legal systems are built, experienced, and trusted. Olga\u00a0<\/em><\/strong>teaches at Berkeley Law<\/em><\/strong><\/a>, lectures widely, and advises companies of all sizes, as well as boards and institutions. An award-winning general counsel turned builder, she also leads early-stage ventures including\u00a0<\/em><\/strong>Virtual Gabby (Better Parenting Plan)<\/em><\/strong><\/a>,\u00a0<\/em><\/strong>Product Law Hub<\/em><\/strong><\/a>,\u00a0<\/em><\/strong>ESI Flow<\/em><\/strong><\/a>, and\u00a0<\/em><\/strong>Notes to My (Legal) Self<\/em><\/strong><\/a>, each rethinking the practice and business of law through technology, data, and human-centered design. She has authored\u00a0<\/em><\/strong>The Rise of Product Lawyers<\/em><\/strong><\/a>,\u00a0<\/em><\/strong>Legal Operations in the Age of AI and Data<\/em><\/strong><\/a>,\u00a0<\/em><\/strong>Blockchain Value<\/em><\/strong><\/a>, and\u00a0<\/em><\/strong>Get on Board<\/em><\/strong><\/a>, with\u00a0Visual IQ for Lawyers\u00a0(ABA) forthcoming. Olga is a 6x TEDx speaker and has been recognized as a Silicon Valley Woman of Influence and an ABA Woman in Legal Tech. Her work reimagines people\u2019s relationship with law\u2014making it more accessible, inclusive, data-driven, and aligned with how the world actually works. She is also the host of the Notes to My (Legal) Self podcast (streaming on\u00a0<\/em><\/strong>Spotify<\/em><\/strong><\/a>,\u00a0<\/em><\/strong>Apple Podcasts<\/em><\/strong><\/a>, and\u00a0<\/em><\/strong>YouTube<\/em><\/strong><\/a>), and her insights regularly appear in Forbes, Bloomberg Law, Newsweek, VentureBeat, ACC Docket, and Above the Law. She earned her B.A. and J.D. from UC Berkeley. Follow her on\u00a0<\/em><\/strong>LinkedIn<\/em><\/strong><\/a>\u00a0and X @olgavmack.<\/em><\/strong><\/p>\n

The post Contract Literacy Is The Missing Link In AI Readiness, Says Linsey Krolik<\/a> appeared first on Above the Law<\/a>.<\/p>\n

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<\/figcaption><\/figure>\n

If your legal team is exploring how to use generative AI in practice, and let\u2019s be honest, most are at least testing the waters, the conversation often jumps straight to tools and outputs. Which chatbot should we use? Can we trust it to draft something real? How do we control hallucinations?<\/p>\n

But before you even get there, there\u2019s a more basic question that many legal departments overlook. What are we feeding the AI in the first place?<\/p>\n

In a recent episode of \u201c<\/em>Notes to My (Legal) Self,\u201d Linsey Krolik, a law professor at Santa Clara University and longtime in-house counsel at companies like PayPal and Arm, made a compelling case for what she calls AI literacy. But the bigger insight was between the lines: you can\u2019t use AI effectively in a legal setting without understanding the inputs, and that means contracts.<\/p>\n

Watch the episode here:<\/p>\n