Mid-Size Firm Saves $200K/Year by Automating Due Diligence

Background

Harrison & Locke LLP is a 45-attorney firm in Philadelphia with a strong mergers and acquisitions practice. The firm handles between 30 and 40 M&A transactions annually, ranging from $5M tuck-in acquisitions to $200M+ middle-market deals. Due diligence — the exhaustive review of a target company's contracts, financials, regulatory filings, and corporate records — is the backbone of every transaction.

For years, the firm relied on teams of associates and paralegals to manually review data rooms, flagging risks and populating due diligence checklists in spreadsheets. The process worked, but it was expensive, slow, and vulnerable to human error — especially on larger deals where the data room might contain 10,000 or more documents.

The Challenge

A typical mid-market deal required 400 to 600 hours of associate and paralegal time for due diligence alone. At blended internal rates, that translated to roughly $80,000 to $120,000 in labor costs per transaction — costs that were increasingly difficult to pass through to clients who demanded fixed-fee arrangements. The firm was absorbing more of the expense with each passing year.

Speed was an equally pressing concern. Buyers expected due diligence summaries within two to three weeks. On complex deals with large data rooms, the firm sometimes needed four to five weeks, creating friction with clients and occasionally delaying closings. Two deals in the prior year had nearly fallen apart because due diligence findings surfaced too late in the negotiation timeline.

The Solution

The firm's M&A practice group evaluated three AI-powered due diligence platforms and ultimately selected one that specialized in contract analysis for transactional work. The platform could ingest entire data rooms, automatically classify documents by type (lease, employment agreement, vendor contract, loan document, etc.), and extract key provisions — change-of-control clauses, termination rights, assignment restrictions, indemnification caps, and more.

Implementation took six weeks. The firm uploaded templates of their standard due diligence checklists, and the platform learned to map extracted provisions directly to checklist items. Associates no longer needed to read every page of every contract. Instead, they reviewed the AI's extraction results, verified flagged risks, and focused their time on the 15 to 20 percent of documents that required substantive legal judgment — unusual indemnification structures, non-standard IP ownership provisions, or regulatory compliance gaps.

The Results

Due diligence time per transaction dropped from an average of 500 hours to approximately 180 hours — a 64% reduction. The firm completed its first AI-assisted deal review in 9 days, compared to the 22 days the same deal size would have required under the old workflow. Over the first full year, the firm handled 36 transactions using the platform and calculated labor savings of $204,000.

Quality improved as well. The AI flagged a change-of-control provision buried in a vendor agreement's amendment history that the manual process would likely have missed — it was the fourth amendment to a contract originally signed seven years earlier. That single catch saved the client from a $2.1M penalty that would have triggered at closing. Client satisfaction scores for the M&A practice increased by 30%, and three clients specifically cited faster turnaround as the reason they brought repeat business to the firm.

By the Numbers