Being asked to “do more with less” is now a common feature of the modern workplace. This has become especially true for attorneys in private practice, where efficiency is now a top priority. A 2019 survey by the management consulting firm Altman Weil highlights that 96% of 362 responding law firms reported a focus on improved practice efficiency as a permanent industry trend. This heavy emphasis on efficiency has motivated lawyers to turn to sophisticated artificial intelligence (AI) tools to reduce duplicative work and cut hours off the time they must devote to contract review and monitoring. Cleary Gottlieb, and more specifically it’s recently founded legal tech incubator ClearyX, are similarly ahead of the curve.
These AI review tools use patented machine learning to identify, extract, and analyze content in commercial contracts, often increasing accuracy and efficiency and allowing attorneys to more easily find trusted information and uncover risks. The benefits are often most evident during M&A transactions, one of the many work streams that ClearyX supports. On the sell side, when the target company prepares to share its contracts with the buyer, these tools can automatically identify potentially problematic provisions so the target company has a better understanding of the risks of entering into an M&A transaction in its own contracts (for example, the target company’s customers may have an option to terminate their contracts if there is a change of control of the target company). And on the buyer side, it can help eliminate the major pain point of manually downloading documents from a virtual data room since users can connect directly and securely log in to import documents.
Where these tools can be most impactful though, is when identifying potentially problematic provisions within the typical tight timeframes. Accurate provision identification is essential throughout the due diligence process. For example, most attorneys know that the change of control and assignment provisions are not always heavily negotiated, but the importance of reviewing and analyzing them carefully during due diligence cannot be overstated. Early identification of critical target company contracts and careful analysis of these clauses are essential so that the parties can develop effective strategies for addressing any issues that could put at risk the intended value or timing of a transaction. It is through the use of AI driven contract analysis tool that the reviewers can uncover these provisions and determine the implications in a fraction of time, relaying the relevant information to clients in an actionable manner and reducing their overall risk exposure. In the world of M&A, where hundreds of thousands of contracts are at play, relying on manual review is asking for trouble.
That is why at ClearyX we deploy a full suite of cutting edge legal technologies to drive our alternative legal services, with AI powered contact review software being central to our due diligence offering. Our goals and those of our client are made all the more achievable through the use of these tools, increasing efficiency and costs savings, producing high quality work product, and mitigating client risk. We hope you’ll let us show you how it’s done…