Could be helpful for in-house counsel
Toronto legal-tech start-up Diligen says it can now identify new elements of contract clauses that are frequently used by companies such as banks and oil and gas firms.
The change could be helpful for in-house counsel dealing with recent regulations, such as new data protection privacy regimes and the upcoming shifts in references to LIBOR in some contracts, says Laura van Wyngaarden, Diligen’s chief operating officer.
The expanded software, which launched July 2, includes a library of 250 contract provisions that are likely to be most important to firms and can help lawyers go through large volumes of contracts faster, she says.
The technology generally works by letting firms input digital or scanned contract files, and the software uses artificial intelligence and machine learning to find key provisions and create contract summaries, says van Wyngaarden. That can be helpful in tasks like making due diligence deadlines in a merger review, she says.
Beverly Rich, a doctoral candidate in Strategy at the University of Southern California Marshall School of Business, told the Harvard Business Review last year that “inefficient contracting causes firms to lose between 5 per cent to 40 per cent of value on a given deal.”
Van Wyngaarden says that unlike some areas of legal technology, there has been rapid adoption of artificial intelligence by contract review lawyers, and some firms may even be considering making their own artificial intelligence model. Many of the new practice areas addresed Diligen’s expansion were requests from clients, van Wyngaarden says.
“What we have found is that Toronto is a fantastic space to grow a legal technology company — there is a lot of support in this area,” she says.