Apogee Legal’s Jim Wagner wrote an interesting blog last week called “Predictive Coding Going Places … Like Corporate
Contracts and M&A,” where he spoke about Zubulake changing the nature of discovery by requiring organizations to pay attention to their electronic evidence. From there, we’ve seen the nature of eDiscovery continue to evolve from, ‘do the best you can to find the relevant ESI,’ to a mandatory process in many different types of matters. In order to manage this requirement and to reduce the need for a pure manual review effort over terabytes of information, eDiscovery providers adopted technology that eventually allowed for the use of basic levels of artificial intelligence in the form of predictive coding. This has revolutionized the culling of information to get the right documents for production much quicker. Okay, I understand that I oversimplified the process, but there is enough information out there on eDiscovery, so let’s move on to something much more intriguing!
The commercial transaction world is different from its eDiscovery sister. I would describe it as an ‘interesting world’ in the sense that contracts are an organization’s number one economic asset, yet they go ignored and forgotten. There are contracts for everything and untold man-hours go into drafting and negotiating these documents, and they essentially get filed away only to be desperately searched for when something goes wrong. This type of behavior is no longer acceptable thanks to an increasingly competitive market and regulatory changes. Organizations are now trying to milk their contracts for everything they’re worth knowing that if they can prevent revenue leakage, or leverage discounting opportunities they may gain an advantage over their competitors.
Jim also described the historic practice of using the pure power of people to review documents for an M&A deal. The tedious task of manually reviewing portions of a contract looking for language that could make or break a deal was/is fraught with opportunities to miss important information or not have time to review every relevant document
Well, commercial transaction technology has FINALLY caught up to the world of eDiscovery. Technology with a pure contract focus can now find contracts stored in many different locations, ingest and extract all of the provisions of interest for an M&A transaction. It can also be taught to find information in any/all unstructured documents and in most foreign languages, so organizations no longer have to throw their hands in the air with frustration or exasperation at the enormity of the task of gaining visibility into their contracts.
But let’s not stop at M&A for the use of Machine Learning, Natural Language Process, and several other AI techniques that are much too technical for this lawyer. M&A is just the tip of what is a very costly (both from a risk and financial perspective) iceberg for all organizations. Let’s dive into the fact that for the first time, dare I say ever, companies can centralize all of their contracts in a matter of days or weeks and then query the system to instantly find answers to their most pressing questions. Anything from, ‘Do I have an MSA with Company X?’ to ‘How many contracts from newly acquired company X have no right to assign or change of control provisions?’
The software can be taught to answer almost any question you have today about what’s in your contracts and, more importantly, the software is there for you when you have to get back into the contracts to answer questions that will come tomorrow.