CareCredit Women's Health May 2024 Banner

Law Firm Allen & Overy Debuts AI Contract Negotiation Tool

law firm Allen & Overy

British law firm Allen & Overy has introduced an artificial intelligence (AI)-powered contract negotiation tool.

The new product, the subject of a Thursday (Dec. 21) Financial Times (FT) report, was created in partnership with Microsoft and AI legal startup Harvey, and comes as the technology is increasingly being incorporated into the legal world.

According to the report, the service — called ContractMatrix — draws on existing contract templates to create new agreements that attorneys can then amend or accept. Allen & Overy (A&O) estimated it would trim up to seven hours off contract negotiations.

The firm says more than 1,000 attorneys are using the tool, with five of its clients signed up to begin using the platform starting next month.

The FT report notes that generative AI’s entry into the legal world could lead to job losses and reduced revenue by cutting billable hours and entry-level work.

However, David Wakeling, A&O partner who leads the group that developed ContractMatrix, said the firm’s aim was to “disrupt the legal market before someone disrupts us.”

“If we look at the impact of AI in law, it is happening and it’s likely to happen in a pretty big way in the next few years, and we are seeing it as an opportunity,” he added.

A&O also plans to offer the service to the clients it gains from its $3.5 billion merger with American law firm Shearman & Sterling, due to complete by May.

As PYMNTS wrote last month, the widespread adoption of generative AI in the legal industry will mean reconfiguring a number of roles and skills in this space.

“Coupled with the challenges of this reboot are the thorny issues surrounding security, privacy and ethics,” that report said.

“Additionally, the belief that generative AI will revolutionize efficiency for so much legal work is tempered somewhat by the majority of legal professionals who have reservations about the industry’s current preparedness for this AI-driven future.”

Research by PYMNTS Intelligence has found that 80% of legal professionals believe generative AI will create “transformative efficiencies” in their sector alone. However, 72% of lawyers doubt their industry is ready for the technology, and only 20% believe that the advantages of using AI outweigh the drawbacks.