UK-based legal AI company Luminance is hoping to take a sizeable slice of the legal due diligence market. It has already announced top UK corporate law firm, Slaughter and May, as a client, but that is only one part of the story.
Artificial Lawyer caught up with COO, Julie Dolan, and CEO, Emily Foges, in their swanky Pall Mall office to learn more about Luminance and to find out whether it has got something special.
There are a growing number of legal AI companies in the market, with several of them handling due diligence. Luminance is also now setting out its table in the AI marketplace and has several features that may differentiate it from some of its more established rivals.
The first factor is the people and money behind this company. Luminance is one of several tech companies backed by Invoke Capital.
Invoke is run by none other than Mike Lynch, the man behind Autonomy, which was once one of the UK’s largest software companies before it ended in an acrimonious sale to HP in 2011 for £6.7bn.
Lynch didn’t retire to a desert island with his cash. Instead he helped to set up Invoke Capital, which says of itself: ‘[We are] a technology investment and advisory company focused on identifying world-leading technology emerging across Europe. We help entrepreneurs productise and bring their fundamental technologies to the market.’
Other tech companies in the Invoke investment portfolio include: Dark Trace, a cyber defence company; Neurence, an advanced image recognition system; and Sophia Genetics, which says about itself: ‘Sophia Genetics is a pioneer in the nascent field of Data Driven Medicine, combining a deep expertise in genetics, bioinformatics, machine learning and genomic privacy.’
These are cutting edge companies with a strong focus on the latest developments in artificial intelligence.
But then, also consider this. Research by crunchbase.com found that ‘Invoke Capital Partners [has] access to $1bn in capital….It is the only investment team in Europe with a dedicated, in-house R&D division.’ Also not bad.
In terms of the amount of money being pumped into new ventures, the cyber defence company Dark Trace had a Series A injection of $18m in 2015 from Invoke. The cyber company now has had total equity investment of over $104m from at least seven investors. This gives some sense of scale as to what Invoke might one day be looking at when it comes to Luminance.
Moreover, Lynch and others who once worked at Autonomy are not ‘newbies’ when it comes to due diligence. As Julie Dolan, COO of Luminance and who also worked at the former Autonomy, explains: ‘Autonomy did a lot of acquisitions, so we really saw the problems involved in due diligence.’
Autonomy also helped develop successful legal tech offerings such as Legal Hold. And it is worth noting that some of the people behind the highly successful legal AI company, RAVN, are themselves former Autonomy alumni.
In short, these Invoke guys know a thing or two about both AI and the needs of lawyers.
The second and third features are perhaps less game-changing, but could give some advantage, at least in the short term.
These extra features are Luminance’s ability to provide highly visualised presentations of the data found in a due diligence exercise. As Emily Foges, CEO, explains: ‘You are seeing the entire organisation [from the due diligence documents].’ This is especially useful with very large companies, where truly understanding what one is dealing with could be an issue.
The other key feature of the software is its anomaly spotting capability. As with other due diligence systems it analyses clauses, extracts data, assigns certain documents to lawyers to look at in more detail and has other features that are fast becoming standard in the legal AI world. But, this ‘mine sweeper’ ability does seem additionally useful.
The system is programmed to proactively seek out anything that looks amiss, not just a missing page from a document, but for example if certain clauses or values in one contract seem to diverge from a group of other similar ones. Or, for example, if the law under which a contract is made is unusual, compared to other contracts of a similar type in the company’s document haul.
Of course, all cognitive systems could search for such issues if asked to, Luminance’s selling point here is that the system automatically scans for anomalies without any prompts to do so (at least that is what AL understands). That said, it seems that some AI systems are not that far away from such a capability in their offering already. Real world comparisons of different systems’ anomaly spotting capabilities are yet to be made public by any law firms, so having an objective way to test this is difficult at present.
Dolan notes that even missing one document, or one aspect in a document, could be critical to the entire merger of two companies. ‘General counsel are looking for the one lethal document,’ she explains.
Other features include a relatively fast training period for lawyers to make use of the system, with Foges also stating that Luminance is ‘plug and play’ i.e. users don’t need Luminance to come to the firm and manage the due diligence process for them. Documents can be uploaded and the process can begin.
As with other legal AI providers Dolan notes that law firms are under increasing pressure in terms of pricing for due diligence work. She notes that for some firms due diligence can even be a loss-leader. Meanwhile the increasing use of fixed fees encourages lawyers to find more efficient ways of conducting what can be very time consuming work if handled entirely manually by associates and paralegals.
In conclusion, Luminance seems to be on a par with other leading legal AI providers. But, perhaps it does have an edge in terms of the money and corporate management experience standing behind it in the shape of Lynch.
Only time will tell how much of the due diligence market Luminance can win, but it is off to a noteworthy start with Slaughter and May as a client. That said, the market is only likely to get busier with more players entering the field. In fact, only yesterday Artificial Lawyer wrote a piece about Diligen, which is also staking out a claim for a part of the due diligence market.
It seems the legal AI battle is hotting up.