How Private Equity is Using Legal AI to Change the Game

Author: Vinay Vekaria

The world of private equity moves fast. Like, really, really fast. In any single moment, advisors could be viewing an investment and hailing it as the best thing since sliced bread, and the very next moment that sliced bread could be burned toast. The age-old problem is that businesses can only move on opportunities as fast as their professionals can move to protect their interests.

In the past, this ‘legal lag’ is what separated a good service from a great one; moving as close as possible to the speed of business, whilst minimizing mistakes and safeguarding your client’s interests. The issue is that the legal industry is notoriously hesitant to adopt newer technologies to minimize the legal lag and properly support their client’s needs.

Enter the new wave of Generative AI and legal technology, which has already improved the time to value around a host of legal problems,  cutting this legal lag significantly (my colleague, Shruthi, has already written a piece on it here. Robin AI is looking to cut that lag further with AI tools that solve specific pain points in industries like PE, through AI powered software, and a Managed Service offering where our legal team deploys Robin’s software on the client’s behalf.

I joined the company five months ago, sitting within our services division alongside a team of more than 80 qualified legal professionals whose sole task is to receive, process and revert routine documents back to a whole host of customers from a variety of companies such as UBS, GTIS and Temasek.

How does it work? Why is Robin growing as quickly as it is?  Let’s take it one question at a time.

Once an in-house legal team has reached out to our team and agreed their standard legal positions, the speed by which they want their documents back, Robin integrates the new firm into our workflow management system and trains our model on those positions. Robin can then either manage the entire process including negotiation points while looping in the customer’s Legal team on critical updates or key points to be noted, or can revert the document to the customer directly. Ultimately, our team’s processes are designed to make a customer’s journey from receipt to execution as seamless as possible, whilst respecting the sanctity of a commercial relationship between two negotiating parties and their data. That doesn’t exactly answer why private equity firms are choosing Robin over the traditional alternatives.

Not-So-Routine Routine Documents

Routine documents are often standardised documents with standardised positions, yet they can eat up hours and hours of a legal team’s time. These could be non-disclosure agreements (more commonly known as NDAs), back-to-backs, non-reliance letters or a host of alternative documents. These documents rarely (and by rarely, I mean never) contain details about the nature of the transaction they are considering undertaking, but nonetheless constitute a critical part of the purchasing process and are often used by private equity firms to obtain further confidential information from an owner of a company or their advisor about a potential company being floated on the market. When a firm wants to sell a company, they will often release a ‘teaser’ of the company’s key selling points and metrics to draw in potential investors. If the private equity firm wants to know more, they sign an NDA to ensure their proprietary information is properly safeguarded. These private equity firms could be processing thousands of NDAs a year alone, yet the ability to efficiently manage their capacity is simply not there. Worse still, any delay on the closing of an NDA can bottleneck a deal before it can even be properly considered.

An AI-Backed Service

Things will always slip under the radar; emails get missed, clauses left undrafted. Busy people make mistakes, it happens. Private equity firms choose to outsource their routine document work to Robin because these documents are reviewed, managed and delivered with multiple eyes (and not just human eyes at that), who have years of legal experience handling these matters. However, it’s not just human eyes that are looking at our customer’s work. Robin’s legal team has one of the fastest turnaround times in the industry having been trained to co-pilot with its custom in-house AI to ensure our document review procedures are not only comprehensive and accurate, but also speedy to offset that pesky legal lag!

Stepping outside our services division, our AI product has offered enormous efficiency-enhancing opportunities for our customers’ legal teams. By way of example, a typical trainee task often undergone at many firms is to painstakingly and manually create a ‘matrix’ of all of your contracts under a deal for a firm to know what it is obligated to do. From personal experience, this can take days of hard graft and accuracy. With Robin’s Query tool? Seconds.

Beyond that, our new Reports feature creates clear summaries of obligations in executed agreements. These efficiency-enhancing tools are extremely useful for in-house legal teams to scale up their processes seamlessly, especially for our private equity customers who are handling large volumes of documents daily. If you want to learn more about what our AI can do for you, you can find out more here.

Small Team Advantage

Private equity firms often evaluate many potential deals simultaneously and need to move quickly to stay competitive. However, handling these routine documents can create massive delays in a deal’s lifecycle and can stretch a private equity firm’s in-house legal teams too thin, especially considering these teams have to managed multiple competing priorities from different projects while handling more substantive long-form documents that could involve a high-value transaction. In that context, why wouldn’t a private equity firm come to Robin? Why would a firm opt to spend more on recruitment and specialised in-house labour alongside the generic risks that come alongside employment relationships, and sacrifice the dynamic advantage small and nimble legal teams have over more bloated teams?

By outsourcing to Robin, these firms can retain a streamlined legal team who are able to stay focussed on more deal-centric documents while being able to consistently meet deadlines for the various projects through our system of same-day reviews. Whilst competing bidders are redlining NDAs or negotiating NRLs, our customers legal team could be securing them a competitive advantage by drafting due diligence reports on potential target companies before another firm can even fire up Microsoft Word.

An International Service

Though Robin has its roots in London, we have since expanded our teams globally with offices in New York (home of our CEO Richard Robinson) and Singapore (home to our investor Temasek). This isn’t just a cool ‘nice-to-have’. Our international offices have been strategically picked to provide an almost 24 hour service to our customers. Our teams are in constant communication, working back and forth to deliver when our customers need it. This interoperability helps to preserve deal momentum for private equity customers, ensuring that there are minimal delays in document handover and the overall deal process is not bottlenecked by a single routine document.

Overall, while managing these routine documents in a fast-paced private equity firm can be a time-consuming, teeth-grinding and capacity-overloading mess, that in no way means they lack importance. Private equity firms simply don’t want to bloat their legal teams simply to turnover these documents, yet still want the benefit of these shields that safeguard your interests from bad actors. That’s where Robin shines. Our private equity customers come to leverage Robin for its 24 hour turnaround rates, its fast and reliable response times.