Embracing AI: Driving Legal Innovation

On this Ropes & Gray podcast, asset management partner Sarah Davidoff is joined by colleagues Ty Owen, Olivia Yoon, and Doug Ballanco to discuss the transformative impact of artificial intelligence on legal practice. The episode highlights how AI is streamlining document compilation, side letter negotiations, and market data analysis, leading to significant workflow improvements and time savings. The team also discusses the TrAIlblazer program, which empowers first-year associates to learn and collaborate on AI-driven projects, accelerating their development and enabling them to focus on more substantive legal work earlier in their careers. The conversation emphasizes a culture of innovation, collaboration, and continuous learning, with associates actively piloting new technologies and sharing best practices to deliver better results for clients.

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Transcript:

Sarah Davidoff: Welcome to the Ropes & Gray podcast, Embracing AI. I'm Sarah Davidoff, co-hiring partner, and I'm a partner in the asset management group here in New York. I'm so glad you're tuning in today. We're diving into a topic that's changing the way we work: artificial intelligence.

Here at Ropes & Gray, we're all about bringing in top talent and giving people the chance to do industry-leading work, especially when it comes to AI. Our culture is built on excellence, collaboration, and innovation, and our associates get to make an impact from the day they join the firm.

Whether it's private equity or what I do, a combination of PE and asset management, health care, life sciences, technology, or infrastructure, our teams are working on matters that make headlines. It’s in the journal everyday. I'm super excited to share that we've just launched our new TrAIlblazer program, Tr-AI-blazer program.

It's designed for first-year associates to really dig into AI, spending about 20% of their billable time learning new tools, collaborating on projects, and building best practices together. It's all about helping our team stay ahead and to serve our clients even better than we do now.

I'm joined today by three fantastic colleague from my group. Ty Owen. Ty is a fifth year. He's a Cardozo Law grad. Olivia Yoon. Olivia is a third year, and she also went to Cardozo.

And Doug Ballanco, a third year who went to Fordham. I went to NYU, so we're all in the family together from the New York law school crowd. Doug, just to kick things off, could you just tell us a little bit about how you use AI in your day-to-day work?

Doug Ballanco: Sarah thanks so much for having me. For me, AI really comes into play in two areas in my work. The first, I use it to help put together documents. Sometimes this can just be for throwing together a quick draft. But more often, it's about pulling materials from various deals or fund raises and compiling them all in one place.

As junior associates, we really spend a lot of time gathering these documents into compendia that we can reference for various legal principles or terms of deals, and AI has made that whole process so much faster and generally smoother.

The second way that I rely on AI is when it comes time to actually use those compendia. Whenever we need to reference a legal principle or pull precedent from specific funds, we can use AI to conduct in-document research almost like normal legal research, because AI can instantly highlight specific legal principles or clauses right within those documents that it compiled. It's honestly been a huge time saver for me.

Sarah Davidoff:. Thanks, Doug. Ty, I'd love to hear about your favorite AI tool as of late.

Ty Owen: When it comes to dealing with side letters, whether it's negotiating terms with an investor or running the MFN process, the ProVision program has been a game changer for me. Instead of manually combing through dozens, sometimes hundreds of documents to find and compare different side letter provisions and then having to maintain those in a lengthy Word or Excel document, I can throw all the side letters into ProVision to quickly pull out the relevant language and compile it into a compendium.

What I really like about ProVision is that it simply presents the information in a clean and organized way that I can then use to make substantive legal decisions. I'm able to have all the information I need in one place. I can compare the substantive differences for a particular side letter obligation across multiple investors and even across funds.

I can easily check the commitment amounts of investors that typically have received a certain side letter provision in the past, or I can quickly filter for all side letter provisions to, say, transfers, for example. On top of all that, ProVision can generate MFN packets for each investor based on a particular fund's MFN rules, circulate those packets to the investor contacts with a Docusign link, and then track the elections when the investors return them. It's become an essential part of my workflow, particular during complex side letter negotiations or fund closings when the time is of the essence.

Sarah Davidoff: Sounds like a huge, huge, game-changing time saver. Our entry-level associates are not just learning. They're actively testing cutting-edge tools, piloting new workforces for client matters, and collaborating to develop best practices.

Olivia, I'm interested to hear about your recent interactions with our summer associates, especially as you've been working with one of our AI tools. Can you share how that experience has shaped your approach to client matters and workflow?

Olivia Yoon: I actually learned a lot about ProVision from one of our summer associates. They were really great about showing me the ropes and taught me the basics of how to use the program. They walked me through how they put together the compendium of side letters, and after the summer, I was able to handle updates and manage everything myself for new closings.

It's honestly made things so much smoother and way less tedious, especially since ProVision essentially lets you cut down hours of work, compiling the compendiums and then reviewing the compendiums, which is extremely nice when you're juggling multiple responsibilities and are kind of running tight on time.

Sarah Davidoff: That's amazing. It's so great to hear how we're learning from our junior colleagues in new ways. Personally, I really believe AI will make this job even more interesting and dramatically accelerate that learning curve for new lawyers. What's some advice you'd like to give law students about AI? Doug, let's start with you.

Doug Ballanco: So I have two pieces of advice. The first, just don't be intimidated by AI technology. It's evolving quickly, but it is incredibly helpful. It makes our jobs more efficient and allows us to focus on substantive work, which ultimately helps us become better lawyers. So don't be intimidated, and don't be afraid to try it out.

Second piece of advice is something I learned during my training at Ropes & Gray. It's really important to know how to do a task manually before you start relying on AI or having the tool teach you to do it. This is very similar to the way that we work with paralegals as associates here at the firm.

If you understand the process yourself, you're able to guide the tool, the AI tool, very effectively. And if you know how you would approach a task, you're able to structure your prompts accordingly so that the technology can then deliver you exactly what you want, and it saves you a ton of time in the process.

Olivia Yoon: I think Doug really covered the essentials, but my advice is not to shy away from new technology. It's always evolving, and there's always going to be a learning curve, but the more you use it and familiarize yourself with it, the easier it becomes.

It's similar to when we first started using cell phones, laptops, tables. Technology always keeps advancing, and we're never going to know what's coming next, so the key is to really just dive in and experiment. So whenever I have some downtime, I'll go and test out a new feature or look up instructions for a specific task, and I find that to be really helpful.

Ty Owen: Sarah, we would like to turn the tables now and ask you about AI. How do you incorporate it day to day, and how has it helped your practice at the partner level?

Sarah Davidoff: I use it all day. It's my operating system. But the two major use cases I thought it would be helpful to walk folks through are when we kick off a new project, I'm the person responsible for providing that scope, outlining the steps, estimating the timing of the project, and also providing a cost estimate.

In the past, I'd spent hours pulling together prior scopes from different projects, comparing them, and then manually drafting a new scope and estimate. One day I was just in a massive time crunch, so I just started using Harvey to streamline this process.

I load in multiple prior scopes, and then I use prompts to highlight the differences for the new project, and within minutes, Harvey generates a draft scope. I can then quickly review and modify it as needed, and it really allows me to get it out to clients much faster.

It's incredibly helpful for setting client expectations and mapping out how a project will unfold, even though things may change over time. My second major use case is really a data collection exercise. when we pitch for new work, data is really a great way of showing actually how Ropes & Gray really dominates the market and is the counsel you should hire.

Having access to that robust market data is really valuable in that situation. It's super interesting that these days we operate much like an investment bank in that respect, and we've leveraged a wealth of data on fundraising and market trends, deal trends.

So when we prepare for a new fund raise or a new transaction, we use our internal AI tool, R2G2. We load in relevant fund documents and LPAs from similar deals, always ensuring that we protect client confidentiality. And what we do is the AI helps us create a market check or comp chart, we anonymize that before sharing it with clients, then we just walk through the various terms and how the client should think about them for their project.

it's really a compelling way to help clients understand their options and to make informed decisions about how to go to market.

Ty Owen: From your perspective, how do you think these AI tools will benefit law students? And what can they do to become more comfortable using AI as they begin their legal careers?

Sarah Davidoff: That's such a great question, Ty. what we're focused on today is helping law students understand how their careers might evolve with the rise of AI in legal practice. And from my personal perspective, I really think that many of the routine, day-to-day tasks, what we sometimes call blocking and tackling, will still be super important to learn firsthand so that you understand the process and the results.

But after you've done those tasks a few times, rather than repeating the same checklist over and over again, you'll just be able to leverage AI to automate those steps. I think a really great example is after creating a checklist manually a couple of times, you can use AI to generate it, freeing you up to focus on the more substantive issues, as in analyzing an indemnification provision or evaluating an extension of an investment period.

So ultimately this shift means associates will be able to tackle more complex and meaningful work earlier in their careers and really adding greater value for our clients at an earlier stage. It's really a win-win. The work will become more engaging for our associates, and the clients will benefit from deeper analysis and faster results.

I really would love to thank everyone for listening and to Doug, Olivia, and Ty for joining me today, sharing your insights regarding how AI is shaping our work in asset management. It's clear to me that technology is helping us work smarter and will deliver better results for our clients.

I really appreciate the practical examples we walked through today and the experiences you've all shared. I hope our listeners found this conversation both informative and inspiring. You can subscribe to this and other Ropes & Gray podcasts wherever you typically listen to podcasts, including on Apple and Spotify. Thanks again for listening.