Developers of legal AI are focusing on partners and dealmaking teams as their attention moves from automating routine operations to giving businesses and their clients a competitive edge. AI solutions like Litera’s Foundation Dragon and Deeligence, whose Australian creators just closed a $1 million pre-seed funding round, assist companies in building resource-intensive datasets.
Until now, law firms have mostly relied on AI only as a theoretical tool to help with routine writing and research duties. However, the creators predict that the most immediate influence of AI will likely come from providing data to business attorneys so they may promote due diligence and strengthen their positions during negotiations. Artificial intelligence, according to Adam Ryan, vice president of product at Litera and former senior associate at King & Wood Mallesons, would improve partner work equally with that of junior associates.
“When a client engages a partner, they are engaging their strategic insight and their ability to plan ahead to come up with negotiation strategies. All of that is going to continue to be valued, but what tools like these do is enhance the effectiveness of that partner by giving them the tools and the data to more effectively negotiate.”
In order to generate a searchable database of contract terms and information that might guide future talks, Litera’s program pulls provisions from past agreements. To varying degrees, businesses already gather deal points, but the companies with the most resources always have the most data. According to Elena Tsalanidis and Justin Hansky, co-founders of Deeligence, the resource gap between smaller businesses and large, international enterprises may be reduced via the strategic application of artificial intelligence.
“Deal points used to be available only to the world’s largest firms because they could afford to pay a junior lawyer to create a huge spreadsheet. Now, with artificial intelligence, firms can unlock this data incredibly easily. For partners at smaller firms, they’re going to have access to tools that might have only been available to very top firms,” Mr. Hansky said.
Traditional due diligence, according to Ms. Tsalanidis, is “nightmarish” for attorneys, deterring many bright young lawyers from going on at large companies owing to the monotony of constant document review. “It’s really a grind, and it’s something that is pretty miserable for junior lawyers,” Ms. Tsalanidis said.
In February, LexisNexis introduced its AI-powered search and drafting tool in Australia. In March, a UK competitor legal AI company, Luminance, raised £30 million in its most recent investment round, while Google Ventures invested in start-up Lawhive, spearheading a £9.5 million ($18.4 million) fundraising effort. The market for legal AI is getting more and more congested with new solutions.
