'It gives them their lives back' - Slaughters chief on what AI means for associates
Magic circle firm signs up to use artificial intelligence software
September 14, 2016 at 03:56 AM
4 minute read
Slaughter and May M&A associates are not about to see their jobs replaced by robots, says senior partner Steve Cooke, following the firm's adoption of new artificial intelligence (AI) technology.
The firm has been working with Luminance Technologies – which has been funded by Autonomy co-founder Mike Lynch's tech investment firm Invoke Capital – to test and pilot the software, which Luminance claims will transform the due diligence process on M&A deals.
Cooke agreed to work with Luminance on the back of a longstanding working relationship with Lynch – Slaughters advised Autonomy on its 2011 sale to Hewlett Packard, with Cooke taking a lead role. "I happened to have lunch with Mike Lynch and the idea of AI due diligence came up. We took it from there," says Cooke.
He adds that the firm had been monitoring AI for some time. "There didn't seem to be any viable options before we agreed to this deal; nothing struck us as being a great leap away from what we do currently."
Cooke argues the new system will be helpful for junior lawyers, who currently have to sift through reams of data as part of the due diligence process. "It gives them their lives back. A lot of the due diligence work is not the most exciting work for lawyers."
Luminance chief executive Emily Foges adds that the benefits of the software include the fact it reports on lawyers' progress. "It shows associates which trainees are assigned to which area and their notes and questions. There is a tight feedback loop."
Other benefits include the fact it is not based on keyword search queries. Instead, the Luminance technology operates without preconceptions and can analyse documents at a glance and identify risks. In addition, it can also sort documents by language, clause type, currency and geolocation.
There are no plans to downsize in lawyer numbers as a result. "There has been talk about robots taking over lawyers for some time. That is not what Luminance is about. I don't see it replacing lawyers though, they will simply be able to focus on the more interesting aspects."
Slaughters plans to use Luminance for approximately 50% of its London-based M&A deal work. "We will start with a safety net and use Luminance side by side with normal document review," says Cooke. He adds that the firm is also considering rolling out the technology to other London practices and Asia.
The key partners involved in collaborating with Luminance and running the pilot are corporate partners Sally Wokes and Murray Cox, technology head Rob Sumroy, finance partner Ed Fife and competition partner Anna Lyle-Smythe. Overall, 40-45 trainees and associates were involved in its development, and the system was tested directly on around 20 of them.
The firm confirmed that it did not provide any funding for Luminance, nor did it waive fees in return for a stake as it did not charge Luminance for its non-legal advice during the pilot process.
Slaughters is the only law firm to have piloted Luminance prior to its launch, though several others are also understood to be interested in the technology.
"When we piloted it we used live transactions and used Luminance to shadow our regular document review," says Cooke, who declined to comment on the transactions and clients involved.
Luminance was founded by a combination of lawyers, M&A experts and mathematicians, while Invoke Capital, which was founded by Lynch and members of the senior management team at Autonomy, has access to $1bn (£700m) in capital.
Slaughters' move comes as a growing number of firms introduce AI systems, with CC signing a deal with Kira in July. DLA Piper also signed a deal with Kira in June – its first use of AI technology. In March, Kira also signed a deal with Deloitte, allowing the Big Four accountancy firm to use its machine-learning technology to review documents related to M&A deals, investigations and contract management. Fellow magic circle firm Linklaters announced a deal with rival technology company RAVN in May, allowing its lawyers to use RAVN's services for a number of automated tasks.
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