How Artificial Intelligence can Transform Due Diligence: Panel Summary
The Luminance team flew out to New York for our first Legaltech conference at the end of January. We had a fantastic time speaking to lawyers from around the world, but the highlight of the week was our panel discussion on Wednesday, held to a packed house.
George Schoen of Cravath Swaine & Moore joined Luminance customers Svein Gerhard Simmonaes, corporate partner at top Norwegian firm BA-HR, and Steven ter Horst, Chief Innovation Officer at the Netherlands’ Houthoff Buruma, to discuss ‘how artificial intelligence can transform due diligence’. Luminance CEO Emily Foges moderated.
First, the panel discussed how the process of due diligence has changed over the years.
Steven ter Horst pointed out that when he began working in legal project management, the data room was still a physical room overflowing with paper. He described the “painful agenda planning” of beginning to transfer due diligence work into the digital realm. By contrast, the current move towards AI-assisted review seems minor. Svein Gerhard Simonnæs emphasised that legal analysis and thorough communication with the client remained at the core of the added value law firms provide to the client. He doesn’t see this changing for the foreseeable future.
On the question of What are the risks of introducing AI into the legal profession?, the panel were in agreement that the idea of AI taking over completely from humans was more of a philosophical problem than a practical reality at present. “Right now, I don’t see a lot of risk to the client when using artificial intelligence,” said George Schoen, “as long as it’s used as a tool.” Svein Gerhard observed that the real risk lay in lawyers being held to even higher standards than today, with clients expecting not just traditional due diligence reports, but also statistical analysis of data points. This could also invite liability issues, he added, but “the alternative to errors made by a computer is errors made by a human.”
The panel then moved on to the idea of ‘disruption’, and whether legal AI was simply marketing hype — with seemingly every new legal technology company claiming to incorporate the technology in one form or another. Steven said that Houthoff Buruma has already seen real and surprising improvements in efficiency thanks to their use of AI. Svein Gerhard agreed, saying that just a month after implementing Luminance, BA-HR had substantially reduced the amount of time they spent on due diligence.
