Ned Gannon and Adam Nguyen, former corporate attorneys and Harvard Law classmates, used to spend night after night staring at their computer screens scrutinizing and summarizing contracts as part of the legal due diligence process in mergers and acquisitions.
And night after night, they both felt there had to be a better way.
After researching many possible solutions, they came upon cutting-edge artificial intelligence technology being developed at Columbia University that had been successfully implemented in some non-legal settings.
The duo thought this technology could be just the right fit for their contemplated applications.
Welcome to the world of eBrevia.
“We wanted to create a tool to allow us to perform these and other legal tasks more accurately, efficiently and cost effectively,” says Gannon, CEO of the Stamford-based company. “At the same time, we recognized a number of trends in the legal industry that are making value and efficiency increasingly important both with respect to law firms and in-house legal departments.”
As an essential part of mergers, acquisitions and financings, attorneys are asked to conduct due diligence on the companies involved. The purpose of the process is to identify any problematic provisions contained within a company’s legal documents that a potential acquirer, investor or lender would want to know about. In larger transactions, the due diligence process includes attorneys combing through a broad array of documents (customer contracts, leases, employment agreements) uploaded to virtual data rooms. The attorneys are also asked to summarize the documents.
According to Gannon, even though this exercise is typically conducted by junior attorneys, it can become expensive for clients because of the number of attorneys involved billing out at anywhere from $300-$500 per hour. At the same time, if the attorneys skim materials too quickly or skip them entirely because of the late nights and time constraints, material information could be missed which could harm the client.
eBrevia, which is easy to use and can analyze a batch of 50 legal documents in less than a minute, uses cutting-edge natural language processing technology. The software is robust because it does not rely on keywords or pre-canned search criteria to find key provisions within documents.
Instead, the software uses an artificial intelligence technique called “machine learning” to learn what provisions and concepts look like from large numbers of examples, and then recognize such concepts regardless of the vocabulary used to express them.
“The software also gets smarter and smarter with the more examples it sees,” Gannon said. “The software is not intended to replace the human user, such as a junior attorney, but rather to act as a tool similar to Westlaw or redlining software.”
eBrevia will use a software as a service (SaaS) business model in which users can upload documents through the company’s secure web interface and receive back fully editable templates with links to the original documents. Customers will have the option of being charged on a per document basis or on a subscription basis that takes into account the number of users.
Set to roll into beta testing shortly, eBrevia is already generating quite a buzz.
Connecticut Innovations gave the company $25,000 as part of its TechStart Fund program, and eBrevia was recently selected as a “2012 Company to Watch” by the Connecticut Technology Council.
But, Gannon says the biggest success to date was being selected as one of only four startups to win an all-expenses-paid trip to California to present to some of the world’s top venture capitalists and other investors at DEMO 2012 the first week of October.
“The DEMO 2012 event was an extraordinary opportunity for eBrevia,” said Gannon. “The conference gave us the opportunity to connect with investors, technology press, customers, and potential strategic partners on the West Coast and throughout the country that we might not otherwise have come in contact with.”
Gannon, who indicated strong interest in eBrevia by several West Coast tech service providers at the DEMO event, said the company anticipates closing a$400,000 funding round in the near future.g
John A. Lahtinen is a freelance writer/editor based in Farmington. Reach him at lahts@yahoo.com.
