The first quarter of 2021 saw the largest value of M&A activity for an opening quarter since records began in 1980, according to financial data company Refinitiv. Deal value peaked at $1.3 trillion in Q1, a 94% increase from Q1 2020. It’s also the second-largest quarter on record, beaten only by Q2 of 2007 when $1.4 trillion in deals were done. Law firms and GCs need a best-in-class approach to m&a due diligence that creates competitive advantage and supports for high volumes of M&A activity. Speed, insights and cost containment are key to success:
- Scale quickly by leveraging third party resources
- Contain costs by adopting variable staffing models for peak workloads
- Leverage AI to produce insights that manual DD processes miss
Is your team ready? While scaling the team and managing costs are familiar territory, artificial intelligence (AI) has emerged as a game-changer.
Even before the review process kicks off, AI can provide insight into project scope. With a data room full of documentation, a simple AI review can decipher whether additional experts are required, such as someone covering different jurisdictions or specific legal knowledge that your organization or teams doesn’t have.
Then there’s the extraction and review process itself. Hundreds of hours can be eliminated by using AI to review contracts and documents, search for keywords, and identify anomalies and loopholes. Not only does AI do this in a fraction of the time, it also finds data outliers that could be easily missed in a manual process.
The massive volumes of information reviewed across real estate, finances, customers, employees etc can also be mined highlight areas of opportunity to drive cost savings – such as contract renegotiation and vendor consolidation. After due diligence is done, the data isn’t dead – as we mentioned recently, AI is about driving outcomes, not just box-ticking.
AI is not a magic wand that eliminates risk and need for lawyers to support DD. AI augments legal, and business expertise. Once the initial data extraction and analysis is complete, AI allows for legal deeper legal analysis of the consequences and relevance of risks that have been identified.
To learn more about how Exigent can help you deliver best-in-class M&A due diligence, please contact us.