City Firm Allen & Overy Launches AI Contract Negotiation Tool
Introduction
International law firm Allen & Overy (A&O) has thrown itself into the AI race since the launch of OpenAI’s ChatGPT, developing a number of in-house products. Its latest offering leveraging AI is ContractMatrix - a contract negotiation tool. This article explores the tool and the capabilities it brings to commercial lawyers.
ContractMatrix
ContractMatrix, developed by A&O’s in-house Markets Innovation Group, led by partner David Wakeling, is a contract negotiation tool. Running on Microsoft Azure, it utilises AI and draws on existing contract templates, such as non-disclosure agreements and merger and acquisition terms, to draft new agreements for lawyers which they can then amend and deploy.
The City firm claims this can save up to seven hours in contract negotiations. The technology has been fully deployed across the firm, with over one thousand lawyers integrating it into their work.
A&O also intends to roll out the software to its clients and their in-house lawyers, having already equipped five unnamed clients with the tool to commence using it from January 2024. Moreover, it can be deployed as a web-based application or a Word Add-In and it set to be eventually available on Microsoft AppSource and the Microsoft Azure Marketplace.
David Wakeling has expressed great enthusiasm for the launch of the product stating that “ContractMatrix frees lawyers from processing and allows them to do what they do best: smart, fast, and strategic decision making”.
The AI Race
Since the AI race took off last year, with the launch of ChatGPT, businesses have been grappling to integrate the technology into their workflow and stay ahead. Law firms are no exception.
ContractMatrix is A&O’s second AI offering, after the launch of its AI chatbot Harvey, based on OpenAI’s GPT-4. The generative AI tool released in early 2023 was the first of its kind to be developed in-house by a law firm and subsequently became an important part of A&O lawyers’ day-to-day work. Now, the launch of ContractMatrix makes it clear that the City firm is trying to stay ahead of its competition in terms of AI capability. David Wakeling’s statement appears to confirm this when explaining that the firm’s goal was to “disrupt the legal market before someone disrupts us”.
A&O is not the only firm developing in-house AI products. Other law firms including Addleshaw Goddard, Macfarlanes and Travers Smith have also rolled out generative AI pilots internally. Furthermore, one can safely assume that all City firms are integrating AI into their workflow to some extent, either developing tools in-house or utilising some of the latest products to reach the market, such as Microsoft’s Copilot.
Thus, it appears to be a veritable race to be the leading law firm when it comes to AI, and with good reason. Indeed, with the purported capabilities of the latest AI products designed for lawyers, it is unsurprising that firms are seeking to boost their productivity through innovative solutions.
Concerns
As with all AI offerings, ContractMatrix is not exempt from the usual concerns surrounding the technology.
Firstly, so-called ‘hallucinations’ that occur in some AI models, lead chatbots to generate incorrect information. A&O notes on its website that these errors can amount, in some cases, to tort liabilities, consumer harm or regulatory breaches. Thus, the firm will need to ensure that the model is trained on correct and up-to-date data, and that its lawyers do not blindly follow output without assessing it first. Wakeling has explained that hallucination concerns are reduced with ContractMatrix thanks to the type of template the technology was trained on.
Secondly, there are concerns relating to data privacy and protection. Examples include training an AI model on personal data or a user inputting personal data as a prompt. Wakeling attempted to alleviate these concerns by making sure that client data was not used to train the AI models that underpin the software, and that inputs and outputs remain encrypted.
Conclusion
A&O appears to be leading the way in terms of AI capabilities of law firms, with the release of its new contract negotiation product ContractMatrix. While the usual concerns of errors in output and data privacy issues are to be kept in mind, the firm has addressed them and deployed the product firm-wide, with the prospect of client use in the near future.
By Scott Hickman