By Chris Wlach, Senior Director, Legal, Acxiom
In July the Association of National Advertisers (ANA), together with D.C.-based law firm Venable LLP, published a template “AI Rider.” The rider — that is, a contract you slap behind another contract — promises to help ANA member marketers “ensure they’re covering all their legal bases for incorporating AI tools” into their advertising.
Cover bases it does. At five pages, the rider is long, detailed, and chock full of lawyers’ favorites. “Right, title and interest,” “represents and warrants,” “indemnify, defend, and hold harmless.” All the hits.
Businesspeople often see lawyers as overthinkers, formalists, and deal-delayers. That’s an unfair generalization; many attorneys just want their deals done.
But considering the 3000-plus-word rider, you have to think: perhaps there’s some truth in the stereotype.
A pragmatic problem
Full disclosure. I represent agencies, often counterparties to ANA advertisers. Still, my gripe with the AI rider isn’t about how it allocates risks and responsibilities between advertisers and agencies. Sure, it’s advertiser-friendly. But had the agencies’ industry group — the 4As — issued their own AI template, it surely would have favored agencies. That’s just how contracting works: each party pushes for its own interests. Rules of the game.
No, I’ve got a pragmatic beef.
Contracting AI needn’t be complex
The science of artificial intelligence is complicated. So complicated that if you’re really good at it Meta might pay you $100 million to work for them.
The law of artificial intelligence isn’t so heady. And when contracting around how AI fits into advertising services, it’s pretty straightforward.
A handful of issues are in play: data security, IP, legal compliance, transparency — maybe some others depending on one’s tastebuds. And get this: many of those issues are already addressed in your organization’s existing contract templates. Even if those templates don’t say “AI,” requirements to keep data safe and follow the law are written with software in mind; they don’t suddenly fritz out when applied to AI software.
Uniquely AI concerns do exist, like mandating human oversight of tools and acknowledging that outputs are unpredictable. But this is the stuff of sentences, not pages.
Yet rather than rely on existing IP and indemnity sections, the rider adds new ones — but for AI. It confuses more language with more protection.
But why would lawyers bloat deals?
Why lawyers overlawyer
You can’t be too hard on the ANA drafters. Countless other organizations have larded their contracts with “AI terms.”
It happens naturally. AI is a very hot topic. From front to back of house advertisers and their agencies are hip-deep in AI. Lawyers want in on the action too — or management wants them in on it. So the C-Suite comes to Legal and says: “Everyone’s buzzing about this AI thing. What are you doing about it in our contracts?”
The right answer is often “Not too much.” Maybe a few edits here, a few tweaks there. Otherwise leave most of it as is.
But it’s very hard to say that. Management may think quick-fix edits show a lawyer who is lazy, short on analytical skills or inattentive to risk. Plus, it’s psychologically hard: When someone is given a directive, it’s natural to follow it, not question it.
Outside counsel tasked with incorporating “AI” into a contract certainly won’t question the directive. They’ll compliment the company’s forethought — then write a five-page single-spaced rider.
Why nonlawyers should care
Attorneys finding the ANA’s AI rider affixed to a contract will no doubt bristle at having to mark up one more document. But whatever, it’s Legal’s problem, not yours.
Except that it’s not. A longer contract means longer time with Legal, who must review and redline the document. Then the other side’s lawyers need to do the same with your company’s mark-up. That lengthens the contracting process.
Which isn’t necessarily a bad thing. Negotiation is an essential — and valuable — step in deal-making. Even when little disagreement exists, forcing issues out into the open creates a shared understanding of the deal. It leads to a better contract, for the lawyers and non-lawyers alike.
But what’s critical to a valuable negotiation about AI is identifying the key issues, not writing lots of words about them. The latter results in more redlining, not better negotiation.
Conclusion
Here’s the irony: today’s lawyers hear promises daily that AI tools will speed up their lawyering.
It still can. But only if the technology is coupled with pragmatic lawyering. Otherwise AI may add as much complexity as it resolves.
