DealLawyers.com Blog

It was long enough ago that I can’t remember exactly when I started hearing about the machine learning tools being developed to improve contract due diligence. Now those tools are commonplace. But how else are M&A attorneys leveraging GenAI to improve M&A workflows? This Sullivan & Cromwell article discusses some of the ways:

Research 

Market Research. AI tools can be used to research industry and market trends, as well as the target company’s business, challenges, and publicly reported events.

Legal Research. Standalone AI products or AI features built into existing online legal research tools can help expedite legal research. For example, GenAI-powered legal research tools allow lawyers to ask questions in a conversational style and receive summarized answers with citations to case law and secondary sources.

Due Diligence 

Defensive Profiles. GenAI tools can be used to analyze a target company’s public filings and produce a corporate profile, including a description of the target’s capital structure, board and management teams, and takeover defense measures.

Contract Identification and Risk Analysis. GenAI technology can be leveraged to identify and extract specific terms (e.g., change-of-control provisions) from an agreement. Attorneys may query GenAI tools to identify specific agreements, or agreements presenting a particular risk, in a VDR.

Summarization of Diligence Materials. AI tools can also be used to generate summaries of documents, or to assist with drafting diligence deliverables.

Drafting & Negotiation 

Drafting Assistance. GenAI tools can assist with preparing initial drafts of agreements and related transaction documents based on standard forms, precedents, and other data sources. They may also be directed to propose thematic changes (e.g., “make the purchase agreement more buyer-favorable”).

Issues List Generation. GenAI technology can be used to prepare initial drafts of issues lists based on drafts or markups received from the counterparty to guide attorney review and negotiation.

Market-Standard Benchmarking. AI can be used to support negotiation strategy by identifying market-standard positions and comparing the relevant transaction documents or provisions to the benchmark deal terms.

Execution

Deal-Process Optimization. AI tools can be used to summarize communications, flag open points, track action items, assist with inbox management, and other procedural tasks.

Signing and Closing Automation. AI tools can generate signing and closing checklists tailored to the deal structure and timing. They can also assist with execution logistics, including signature page management and closing binder preparation.

This all sounds great, but many risks remain. The alert describes some risks specific to M&A related AI applications, such as a bias in favor of publicly filed transactions.

– Meredith Ervine