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Wait, can ChatGPT write my contracts?

June 03, 2024


Hey there,

We’re back this month with a couple of legal tips to keep you and your business headed for success. 🤓

Today you’ll learn:  

  1. 🙋‍♀️The legal question we’ve been asked most this past month by founders and startups. 

  2. 📰 A noteworthy piece of news (and why it’s relevant to you). 

  3. 🚀 One legal reminder for you to check off your list. 

  4. 🎉 Upcoming events that bring value to your business.

Got a question you’d like us to answer next month? Just reply to this email and let us know.

1. Our Most Asked Question during May:
Can I use ChatGPT or Gemini to write my contracts? 👾 

AI is transforming and expediting many aspects of business, and we love it!

BUT when it comes to creating legally binding documents, we always advise our clients that it should only be used as a reference tool. 

Because ChatGPT is still a new machine learning system, it doesn’t have the level of understanding and judgement as a human solicitor when it comes to interpreting legal principles and precedent.

This is compounded by the fact that since it's limited in the timeframe it can access data from, any new laws or regulations are not taken into consideration in the information it shares with you. 🧑🏽‍⚖️

So while ChatGPT can produce legal templates in broad terms, it's not able to draft them in a way which is bespoke to your business’s quirks, complexities and unique circumstances.  

And not to mention that while it’s great at providing short answers and grammatically correct sentences, it lacks the ability to create long-form documents, which most legal documents need to be. 

So while we’re big fans of AI and look forward to it evolving, please please don’t risk ‘giving it a go’ at creating any document of legal standing for your business. 🙏

2. Noteworthy News:
AI is Getting Less Sexy (but more profitable) 💸

The future of generative AI is increasingly shifting towards enterprise applications, a move that may be less glamorous, but is definitely more lucrative.  

Startups that initially focused on consumer-facing AI products are now pivoting to serve business clients. This switch is driven by the need for reliable, recurring revenue streams as startups are confronted with the high costs associated with maintaining AI-powered applications. 📈

Companies like Tome, Perplexity, and Sierra are leading this shift by developing AI solutions that address specific business needs, such as improving operational efficiency and enhancing productivity.  

By focusing on enterprise applications, AI startups can secure long-term contracts and stable revenue, positioning themselves as essential partners in the ever-evolving digital age. 👩🏼‍💻

Why should this matter to you? 

For a while now it's felt like anything and everything AI related is automatically hot stuff.  

But as the AI industry is maturing, practicality and business value are starting to take precedence over novelty. We’ve worked with many startups who have made AI a core aspect of their business, sometimes just for the sake of making the business more appealing to potential investors. And we get it, you want to give your business the best shot at success that you can. 

But with the changing AI landscape, we recommend whatever aspect of your business is comprised by AI actually adds concrete value and/or revenue to your business. And expect potential investors to start asking much more hard-hitting questions when it comes to how you’re using AI.  

3. Your June Legal Reminder:
Have You Applied for Advance Assurance? 🧐

You’ve probably come across Advance Assurance (AA) and some founders may have told you that, as a startup, it’s incredibly important to have it. But why?  

Well, Advance Assurance is provisional approval from HMRC that a company will qualify for tax relief schemes like EIS and SEIS. And what exactly are EIS and SEIS? 

Both are tax schemes set by the government to encourage investment into startups (usually from high-income earners who pay a lot of tax!). They offer huge tax benefits for investors. 💸

Of these two, SEIS is more applicable to smaller startups. It offers tax incentives like 50% income tax relief, capital gains tax deferral and exemption, loss relief and inheritance tax relief.  

Don’t forget that many VC firms have investors, and these investors are usually high net-worth individuals looking to get tax back using schemes such as EIS or SEIS. 

So once a startup has been AA-approved, your pool of potential investors widens as more angels and VCs become interested.   

It’s worth noting that some investment funds won't even consider startups that haven’t been AA-approved. ✅

4. Upcoming Entrepreneurial Events 🤓 

✨June 5th: SuLe Webinar Master Business Law: From Launch to Investment (from setting up to securing investments, navigating the legal aspects of your business) 
📈 June 7th: Emergence 2024 (investment conference) 
👾 June 10th – 14th: London Tech Week (anything and everything tech) 
💸 June 11th: SuLe Webinar How to Get Investment Ready (what you need to know to be investment ready)  
🏔️ June 15th: The London Venture Capital Summit (summit for investors, founders, and operators) 

That’s all for now! We’ll see you in July. 

– The SuLe Team 

P.S. If you have questions about whether something in this email applies to your business, we’re just a free 15 min consultation away. ;)