The handsome DiligenceEngine website contains much information, but here’s the gist of what DiligenceEngine does:
- It automatically finds and highlights user-specified contract provisions.
- It prepares summary charts with findings (e.g., a list with the actual change-of-control, term, confidentiality, indemnification, notice, etc., section text), which users can edit and download.
- It includes workflow and data-analysis tools to help users refine and understand results.
Noah also said the following in an email to me:
While the software can extract information from contracts on its own, lawyers often use it as a first step in contract review. We have found that an experienced lawyer using our system can review contracts page by page in 20–30% less time. If they are willing to trust the system more and only spot-check its results, they can get through in closer to 60% less time. The really useful part, though, is that we have found a user is more accurate despite being faster.
Currently, most of our users are at large law firms, a few companies of various sizes, and a few legal-process-outsourcing (LPO) companies. The system has been used in over $25 billion of transactions so far. And user feedback has been positive, with, for example, one representative user tell us that the system was “tremendously helpful.”
We will let people try it for free before April 1 as part of our public launch, but then may revisit this free trial policy.
Noah also sent me this analysis comparing traditional due diligence with computer-aided due diligence.
As usual, I ask myself, What’s in it for the contract drafter? Well, DiligenceEngine is primarily for use in—no surprise—due diligence review of contracts in connection with a proposed transaction, or for pulling information from legacy contracts or counterpart-paper contracts, perhaps for purposes of an automated contract-lifecycle-management system. But you could also use DiligenceEngine to check for variation in a corpus of a certain kind of contract. Here’s what Noah told me in that regard:
If you would like a spreadsheet showing, say, the confidentiality/change of control/assignment/license grant/dispute resolution/force majeure/nonsolicit/[more] language from a hundred (or thousand) agreements, our system could do it for you automatically (with pretty high accuracy) or help you do it (in less time and more accurately than you would do it on your own).
No one ever went broke underestimating the transactional world’s appetite for automation. But I’m hopeful about DiligenceEngine’s prospects. Compared with contract drafting, I doubt anyone has their sense of self-worth wrapped up in the traditional approach to due diligence. It’s always been that dreaded combination, mind-numbing but essential, and people just want to get it done, and get it done right.