Any company or lawyer that has ever been involved in any kind of merger or acquisition transaction will know one thing for sure – a deal typically involve hours of legal work, including often mundane, but essential tasks. Owen Oliver, product manager at Workshare, which produces document comparison software for law firms, said: “My legal days as a corporate lawyer were marked by hours of carrying out tasks such as due diligence and verification – the thankless stuff that keeps you in the office until 2am in the morning but is not what you really want to be doing.”
Mr Oliver reflects the growing realisation among most law firms, and their clients, that there is an ever-increasing need to deploy technology to help drive down costs and improve efficiencies in M&A transactions. In recent years, legal technology has become a thriving area and for good reason – deals can live or die based on how efficiently a transaction can be completed – and law firms have to be on the front foot when it comes to innovation.
Products that are already on the market to help lawyers do their jobs better include Workshare Transact, which creates an easy workspace to share documents and deal checklists to allow both the lawyer and the client to efficiently move a transaction through to closing quickly. Other technologies include brainspace and RAVN and Chris Baldwin, consultant at CMS UK, said the efficiency of some of these products can reduce cost of reviewing documents by between 30 and 50 per cent in some instances.
However, Mr Baldwin said that the truly exciting future for legal technology is the potential for artificial intelligence could transform legal technology even further. For example, when reviewing documents, machine learning could help ensure that only the most interesting or relevant documents were brought to a lawyer’s attention first in a due diligence exercise: “We want to bring the documents that are of most interest straight up to the top and use our lawyers’ expertise most productively.”
Artificial Intelligence could also be used to help automatically find key provisions in documents that are of interest to lawyer, such as transfer and change of control clauses, rather than searching them out manually. Not only could this search be done upfront by systems, it is possible machine learning could also help recognize “good “” or “bad” clauses or deviations from the norm.
Klaus Jager, partner at CMS Germany, said while the potential of legal technology was immense it may only be as effective as the data it relied on. He said firms had to avoid the dangers of “garbage in and garbage out” as poor data and processing could increase legal risk. Daniel Sasaki, managing partner, Mayfair Equity Partners, said: “There is a large scope for efficiencies in the legal system that can come from artificial intelligence. I do think though at the end of the day there is a difference between things that are relatively straightforward and things that really require specialised knowledge. The appetite for risk goes along with that.” He said that, for example, there was a relatively low risk of “missing something” from straightforward corporate due diligence and potentially large legal costs savings to be made. However, in some instances transactions that required more nuanced decision-making or actions that could not be programmed into a repeatable action may have much higher risk levels.
Peter Wallqvist, vice president of strategy at iManage, said that law firms could not ignore the importance and potential benefits from legal technology in reducing risk, adding: “We have very tangible evidence that using artificial intelligence has even led to a reduction of fees in law firm premiums, so perceptions are changing in that area.”
Perceptions may well be changing but with the ever-increasing importance of technology in the legal world could there ever be a situation where lawyers will not need to exist? Mr Baldwin thinks not: “You only have a certain number of people who are experts on the deal, so it is about working together, working hand in hand . It is not a man versus machine conflict. That is the Rolls Royce solution.”