Latham & Watkins has partnered with Harvey to develop a new ‘AI-enabled fund formation solution,’ as big law deepens its ties with legal tech providers.
The collaboration will see the firm work with Harvey to build ‘a separate product within the Harvey suite that combines a series of different tools,’ Latham’s chief information officer Rene Mendoza told Legal Business, listing ‘agents, project management, document analysis, and process automation’ among the tools.
Latham and Harvey hope that the new product will streamline processes, enabling partners and associates to focus their time on higher-level commercial questions.
Latham lawyers will work with Harvey engineers to build a tool that could be marketed to other firms at a later date, Mendoza said – though any other users of the tool would not have access to Latham’s market intelligence, which will help shape the tool through its development.
Although Latham has been purchasing Nvidia chips and fine-tuning open-weight Nvidia AI models, Mendoza said that the firm’s partnership with Harvey will not involve any fine-tuning or post-training.
He added that it is yet to be decided what model Harvey will use to run the tool inside its suite.
‘Fund formation often involves hundreds of investors and there are many different areas of coordination that AI can help make more efficient,’ Matthew Chase, global chair of Latham’s investment funds practice, explained.
‘This will create a better product for our clients by combining Latham’s market knowledge and bringing that to bear with the capabilities of AI.’
‘We don’t partner with many third parties on AI products, but Harvey’s been a long-time partner and we felt this to be the right fit’
The tools will be directed at improving key tasks in the fund formation process, including drafting side letters, subscription documents and limited partnership agreements.
Chase and his team had already been working internally with Mendoza to develop AI tools for the funds space when Harvey approached the firm and suggested collaborating.
‘We’re the lead design partner with Harvey on this initiative, but our in-house team has been working with Matt for many months on using AI in his practice,’ Mendoza said.
‘This was a natural next step toward developing a more robust product. We’ve also worked with Harvey for years on custom development projects and giving them feedback on how to refine their product, so it was very much aligned with that broader relationship.’
The firm has advised Harvey on a number of financing rounds, including its most recent round this September, when the California-based startup raised $550m at a $15.5bn valuation.
‘We don’t partner with many third parties on AI products, but Harvey’s been a long-time partner and we felt this to be the right fit,’ said Amber Banks, an M&A and PE partner and member of the firm’s AI strategy committee.
The firm is focussed on developing a ‘flexible’ AI strategy, Banks said – one that involves fine-tuning models, building proprietary tools in-house and licensing from existing vendors.
‘It is important to talk to leadership in every practice because there is no one size fits all model,’ she continued. ‘What may work for M&A may not work for investment funds and so on. We are taking a flexible approach to everything as we go.’
‘Having our actual practicing lawyers be a big part of this is what will drive this product to be successful’
While she emphasised the firm’s desire to create its own tools, which may well dovetail with those being developed with third parties, she added: ‘We’re not a software development company. For things that can be made with a third-party partner who specialises in this, of course we would go in that direction.’
Banks also stressed the importance of involving as many of the firm’s lawyers as possible in the development of AI tools, including both leading partners and associates.
Chase concurred: ‘Having our actual practicing lawyers be a big part of this process is what we think is going to drive this product to be very successful.’
The announcement comes after Kirkland & Ellis signed a multi-year partnership with Palantir in June, to develop its own ‘proprietary enterprise platform’ targeted at the private equity fundraising space.
Firms are increasingly working with specialist legal tech providers such as Harvey and Legora as well as frontier labs to develop the tools reshaping the nature of legal work.
Sullivan & Cromwell, Ropes & Gray and Cooley all partnered with OpenAI to create custom tools within the lab’s new legal product, Astra for Law.
Latham is also collaborating with the ChatGPT maker, to enhance its governance frameworks and operational safeguards.
Latham and Harvey are now beginning the development process for their funds product, Mendoza said.
