Amid the ever-growing buzz about artificial intelligence in the legal industry, a Pittsburgh-based startup recently announced its first “combined intelligence” partnership with a law firm—with more deals likely to follow.

LegalSifter, founded by two Carnegie Mellon University alums who received seed funding from the school in 2014, offers software that reads contracts and then gives advice about them. The person viewing that advice could be an executive, a company lawyer, or even outside counsel, said LegalSifter CEO Kevin Miller.

After a contract is uploaded, Miller said, it takes about 10 to 20 seconds to read the document and decide what elements are present. Then the software highlights key concepts and offers advice on how to approach them. That's where the “combined” part comes in—the advice can be tailored to the user and supplemented with lawyer guidance.

For instance, if the software detects an assignment clause, it will show the client company's typical stance on assignment clauses. When the tool is in its non-customized state, LegalSifter provides some best-practices text so users aren't starting from scratch, Miller said, but that can be changed to reflect a particular lawyer's advice or a client's policy.

The software lowers risk for companies that use it, Miller said. “Lots and lots of nonlawyers are negotiating contracts because they can't afford to wait for outside counsel” during a negotiation, he said.

And for law firms, LegalSifter says it offers an opportunity to widen profit margins, particularly when working on a fixed-fee or alternative-fee basis.

“A lawyer that uses this product is faster, materially so, and makes fewer mistakes,” Miller said. “It's a revenue expander and it's a margin expander, and it also allows the law firm to get stickier with the client because they're selling subscriptions” to the software.

He added that LegalSifter also creates a way for senior attorneys to provide junior lawyers with guidance as they evaluate contracts from afar, by loading the software with their own best practices for others in their firm to consult.

Earlier this month, LegalSifter announced a partnership with U.K. law firm TLT LLP. And at the beginning of 2018, the company expects to officially announce a similar partnership with Horty Springer & Mattern, a boutique firm based in Pittsburgh. Several other law firms have signed seller agreements that will become public next year as well, Miller said.

Dan Mulholland, a senior partner at Horty Springer, said his firm learned about LegalSifter early in 2017, somewhat by accident. Mulholland said he was looking for an e-discovery vendor when he came across the startup, but he was intrigued by the idea.

Horty Springer, a 16-lawyer firm, provides full-service legal counsel to health systems and hospitals, so much of their practice involves contract review.

“We found it a very useful tool that we could review a contract, redline it and in a matter of minutes send it back to the client,” Mulholland said. “Whatever time we're devoting into it now will be recouped many-fold because of the efficiencies it gives us.”

Mulholland said his firm plans to let clients use the software on their own, customize it based on their business, or use the software with simultaneous added guidance from a lawyer. He noted that his firm has been using fixed-fee arrangements for more than 30 years, and the software will be all the more useful in that respect.

“A lot of people think this artificial intelligence development is going to eliminate lawyers, I think it's going to create a lot of opportunities for law firms,” Mulholland said. “This gives us a very efficient way to service clients on a fixed fee.”