Linklaters’ Strategy for AI and Due Diligence
In the world of commercial law firms, due diligence is a critical component that many legal AI companies aim to streamline. So, how does the global firm Linklaters tackle this essential aspect of its client work? Artificial Lawyer had a conversation with Greg Baker to delve into their approach.
Baker, a London-based legal professional, has recently assumed a senior lawyer position concentrating on practice transformation, particularly in AI and innovation, within Linklaters’ global corporate practice. A core aspect of his role is establishing a team dedicated to tech-enhanced due diligence, essentially creating a ‘center of excellence’.
Though not directly involved in generating revenue, his role is geared towards advancing the firm’s long-term strategy of cultivating ‘innovation lawyers’ integrated within all main practice groups.
Regarding this endeavor, Baker highlighted that ‘some of it will involve AI’ and will be intrinsically linked with the in-house tool developed by Linklaters, ReportiQ. Launched officially in 2023 after a pilot phase, ReportiQ is a collaborative effort between Linklaters and the US vendor WizDocs.
Apart from Baker, other key figures involved in driving ReportiQ forward include Timo Engelhardt, an M&A partner based in Munich, and Jennifer Klement, the Product Owner. This end-to-end solution facilitates various functions such as managing changes in the Virtual Data Room, assigning documents for review, handling queries, offering a curated repository of suggested language, and generating the final report with just a single click.
Clients utilizing ReportiQ benefit from a distinct risk profile visualization, easy access to information, and options for monitoring progress. The platform has already supported deals worth over €35 billion.
While the success of ReportiQ is evident, Baker highlighted the broader strategy that entails a comprehensive analysis of ‘the process and the toolkit,’ followed by the evaluation of whether to ‘buy, borrow, or build’ the core technology of a solution.
Further considerations include understanding how automation can be integrated into the broader process and identifying areas where standardization can be applied.
Additionally, the introduction of genAI has introduced a new dimension to due diligence practices. Baker emphasized that tools like Kira and genAI play a crucial role in improving workflows. GenAI, in particular, focuses more on providing prompts rather than extensive AI training.
GenAI proves extremely helpful in consolidating and organizing multiple questions from various parties involved in a deal, improving overall efficiency and reducing redundancy in the process.
Despite advancements in AI technology for due diligence, Baker stressed that ‘spotting issues’ is not the sole purpose. AI and other tech tools can significantly augment the diligence process, offering more nuanced insights beyond standard clause examination.
Due diligence isn’t restricted to M&A deals but extends to a wide array of transactions, including real estate and finance. This diversity underscores the broad scope of applications for due diligence practices.
Ultimately, the goal is not to replace lawyers with AI tools in the diligence process but to enhance their abilities to negotiate deals effectively. AI serves as a valuable tool to create value for clients and streamline essential yet labor-intensive tasks.
The integration of AI and tech solutions can account for 10% to 50% of the total time spent on an M&A deal, underscoring its significant impact on operational efficiency.
Linklaters’ meticulous approach to integrating AI into their due diligence practices exemplifies a sophisticated utilization of technology to optimize workflows and enhance client outcomes. AI serves as a means to an end, facilitating smoother processes and empowering lawyers to secure favorable deals for their clients.
