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 International Bar Association  Artificial Intelligence

Cuatrecasas, Cravath and Arent Fox Schiff share their experience using AI  

IBA Conference: Mergers and Acquisitions in Latin America

NeoSmart,  April 4, 2024

Miami’s warm weather was the perfect setting for the Mergers and Acquisitions in Latin America event, organised by the International Bar Association (IBA) between 13 and 15 March. The conferences and programme were split between the Ritz-Carlton South Beach and SLS South Beach hotels, where some of the most important law firms in the region attended.

Neosmart has been present at the event and has had the opportunity to attend some of the conferences. One of them focused on the use of artificial intelligence in mergers and acquisitions. In a round table format, four speakers spoke, three of them belonging to law firms, and a fourth, co-founder of an AI services company for the legal field.

Diego Carrión, partner at Cuatrecasas Lima, began by comparing the current moment with other great technological leaps for the legal world, such as the use of email or the explosion of videoconference meetings. "This is really a revolution and it is going to influence the practice of our work," he said. Although AI has been helping lawyers in a number of areas for a long time, as this jurist recalled.
"I started working with some AI tools in 2023," Carrión pointed out to the audience at Mergers and Acquisitions in Latin America. "Before that we were already working with automation tools, but it was very different. When you work with these automation services, you need a big team within the firm that prepares a lot of documents, such as draft texts, contracts, information in different formats. Then you put it all together and you have a search tool. And this type of system is used in his office when they need to find a document among the huge volume of information they handle.

The Cuatrecasas Lima partner explained how his firm works in the field of artificial intelligence. There is a team with a technological profile in charge of preparing documentation from all departments. "In M&A we have many types of documents and now we have to distinguish between a SPA (sales and purchase agreement) under Spanish law, another under Peruvian law, Chilean law, Mexican law, because they are different. What the innovation team does is to pool the best models that we have and that have been approved for each area. And this is being automated," the lawyer commented.

Once the documentation phase of the system is finished, it is time for lawyers to use it. "If you want to prepare an SPA with some certain features, you go to this application and start clicking on what you need, for example, if the sale will take place in natural prices and there will be no price adjustment mechanism. You just click on the options and it takes five minutes. Then you press ’Enter’ and you have your SPA. It’s very easy," Carrión explained, adding: "But we can only rely on this SPA because for many years the innovation team has put together all these documents that have already been approved by lawyers.

Generative AI versus traditional AI

All the previously classified knowledge serves to feed the new AI tools. "What we do now, by leveraging this generative AI, is to implement the technology to combine different documents and different clauses," said Carrión, who illustrated with an example of how a clause in a sale and purchase agreement can be improved. If they want to modify the price adjustment, all they have to do is indicate it on their AI platform. "The tool is not only looking for the clause, it also understands what type of agreement the clause is for, if it is about the energy sector or real estate, the clause will be different," the lawyer explained.

This is one of the differences between more traditional AI and generative AI, as could be seen at the Mergers and Acquisitions in Latin America. Daniel J. Cerqueira, partner at the New York firm Cravath, Swaine & Moore also pointed out that machine learning and automation have been used in legal practice for years. These technologies have been used to support the production of documents or internet searches in connection with litigation.

Regarding the use of AI in his firm, Cerqueira talked about his firm’s first experiences: "We have some pilots going on. For example, in transactions, in the area of due diligence. We have had some clients who have asked us to use AI tools to review very long contracts that would have required an army of lawyers to do it." The lawyer added that on one occasion it took hours rather than weeks to review these hundreds of contracts. They subsequently ran tests to check the accuracy of the reviews and determined that this amounted to 95 per cent, a very high rate.

For Cravath partner Swaine & Moore, one of the advantages of generative AI is how lawyers can communicate with the tools in natural language. They can simply ask it to show them drafts of M&A deals in a particular type of industry and with certain characteristics. It is a more intuitive interaction and also faster. They can even ask the AI to summarise the information or present it in graphical form.
"The contract drafting tools I think are very interesting. They seem to be starting to be deployed now and we are at an early stage. There is still work to be done to optimise them, but I think the hope is that in a relatively short period of time you can basically generate a document that didn’t exist before," Cerqueira said, although he stressed that this is a starting point, not the final document.

Working closely with the technology department

For Matthew Berlin, a partner at Washington-based law firm Arent Fox Schiff, the innovation team is essential in this area. At his firm, he works closely with lawyers to get the best results. Among the utilities of AI, Berlin emphasised the generation of contracts and also its support in streamlining due diligence processes. His firm uses internal and external tools to carry out these tasks.

As the Arent Fox Schiff partner emphasised, the whole industry is still trying to figure out how best to use artificial intelligence. And one of the speakers brought another perspective to this question. Adam Nguyen, co-founder of contract review AI software developer eBrevia, confirmed that there is a lot of interest in the legal world in the technology. "When our company started in 2011, law firms were just beginning to adopt artificial intelligence," he noted. "Now we are in an accelerating phase of AI adoption. In some ways, AI is not just the future, it’s the present and also the past."

His company allows you to upload contracts and documents into its tool and then export the data in different formats. You can generate a due diligence report for a client or an internal analysis of a contract. This is a typical way of working in the legal sector, without losing sight of the fact that the goal is to increase the accuracy and speed of the process. "No law firm wants to increase speed at the cost of sacrificing accuracy," said Nguyen, before adding that in due diligence processes, AI allows for gains in both time savings and accuracy.

However, the eBrevia co-founder reminded that artificial intelligence is a complement: "At the end of the day, lawyers are responsible for the outcome. Clients pay for advice and for results. AI acts as an accelerator, but the ultimate responsibility lies with the lawyer and the law firm".

Despite the unknowns about the use of AI in legal practice, the speakers agreed on the renewed value the technology has acquired in the last year. With generative AI, the utility goes beyond a keyword search. In the Q&A, a comparison emerged that probably illustrates well what the artificial intelligence space is today. Law firm spokespersons spoke of AI as a paralegal that has arrived in law firms with extensive knowledge and the ability to scale its work.
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