- Top Big Law firms like Shearman & Sterling, White & Case, and Orrick use artificial intelligence.
- AI tools by companies like Thomson Reuters, Litera, and Evisort are helping firms manage M&A work.
- M&A activity surged 64% in 2021, which firms said drove their AI adoption, according to Refinitiv.
- This article is part of “Enterprise Tech Blueprint,” a series exploring the strategies leading-edge companies use to innovate and grow.
As a law-firm associate about 20 years ago, Meredith Williams-Range would often be surrounded by bankers boxes filled with documents as well as printouts fanned across conference-room tables.
In a familiar ritual back then for young attorneys and paralegals, they would physically thumb through contracts as they helped perform due diligence for merger deals, Williams-Range said. That could sometimes mean weeks of poring over the language for risks to flag to higher-ups and looking for issues to highlight for the parties to negotiate on, like any notable contractual obligations involving third-party suppliers.
Today, a lot of those records have long since gone digital, and top law firms like Shearman & Sterling, where Williams-Range is now the chief knowledge and client-value officer, are using artificial intelligence to comb through contract language for such insights and to organize information in those contracts.
“As lawyers, we have been trained not to trust anything — so trusting AI is always a difficult conversation to have,” she told Insider. “But what you’ve seen absolutely happen is the clients are driving where AI has either been developed or adopted in any Big Law firm.”
Mergers and acquisitions surged in 2021, when the roughly $5.9 trillion in deals was about 64% higher than in the previous year, according to Refinitiv data. The frenzy led to a windfall of work and revenues for Big Law firms, some of which looked to AI tools to keep pace with the volume of transactions they were advising on, Williams-Range said.
Shearman & Sterling uses a wide variety of AI tools for different uses — one of the firm’s go-tos for deals due diligence is Kira, a tool owned by Litera, a document-technology company that works with law firms.
The Chicago company’s main investor is its private-equity backer, Hg. It had raised a total of nearly $358 million as of April, according to data from PitchBook.
Litera’s legal-industry surveys have recently found increasing demand for automation technology. In a survey released in April of more than 200 M&A attorneys in the US and elsewhere, 84% of respondents said they expected their firms to spend more on technology in the next year. Even more said that over the next five years, they expected most M&A work at their firms to be supported by AI.
“The pandemic forced a lot of M&A teams to think about the process a little more than they had in the old days when everybody was in the same room or the same office,” David Curle, the legal-content and research lead at Litera, said. “The sheer deal volume made it almost impossible for a lot of firms to keep up without applying some technology to the process.”
Jerry Ting, the founder and CEO of the AI-driven contract-analytics platform Evisort, said his experience with the tedium of due diligence as a young M&A lawyer informed his entrepreneurship in this area.
“I’d never negotiated a contract before, and I went to the office in New York, and they said, ‘Here are a hundred contracts — every hour you spend reading it, write that down because we’re going to send a bill to the client,'” he said.
The message of using AI to tackle the repetitive elements of the work — and rein in the cost of associates billing upward of $500 an hour for them — seems to be resonating. In May, Evisort said it raised $100 million in a funding round led by TCV.
The firm White & Case also noted its use of AI, like many firms, to assist with document review for discovery — a key phase of litigation that generates a huge number of documents, including emails, internal memos, and other forms of evidence in a lawsuit. The company uses tools such as Brainspace and Relativity, Janet Sullivan, the firm’s global director of practice technology, said.
Thomson Reuters, known for its legal-research tools like Westlaw, and other big legal-tech players have ramped up their AI offerings to assist with M&A work and research. The firm has also been acquiring companies that can collaborate, like Practical Law and the document-review tech company ThoughtTrace, combining the legal expertise of human lawyers and writers with AI tech to help train algorithms, Joe Dormani of TR Ventures, the venture-capital arm of Thomson Reuters, said.
Some firms are also experimenting with more cutting-edge uses, like helping their attorneys write legal briefs. Orrick, Herrington & Sutcliffe, for instance, is piloting the use of Clearbrief, an AI-based Microsoft Word plug-in that suggests improvements as lawyers write briefs, like examples of relevant case law they might not have included that could strengthen their argument, Kate Orr, the global head of practice innovation for Orrick, said.
But that doesn’t mean young attorneys are being replaced by code just yet, she added.
“It is not drafting entire paragraphs for you,” she said. “It’s just to improve your drafting on the substance and the facts.”