A new report from Eversheds Sutherland suggests that technology is accelerating international mergers and acquisitions while making legal advice more important than ever.

Buying a company has never been a simple process. Behind every major transaction lie months of negotiations, financial analysis, legal reviews and difficult decisions.

Technology is beginning to change that process.

According to a report published by international law firm Eversheds Sutherland on October 7, artificial intelligence and other advanced technologies are helping companies identify potential acquisitions, analyse risks and complete transactions more efficiently.

But faster does not necessarily mean easier.

Artificial intelligence is accelerating M&A transactions

Technology can analyse large volumes of information far more quickly than traditional methods.

In a merger or acquisition, this capability can be used to identify potential targets, review documents, detect certain risks and organise information relevant to negotiations.

Processes that previously required substantial amounts of professional time can now be completed more efficiently.

This can reduce transaction timelines and improve efficiency, particularly where large volumes of documentation or several jurisdictions are involved.

Greater speed does not mean less complexity

The central paradox is that while some tasks are becoming easier, transactions may be becoming more legally complex.

The report warns that technology is introducing new challenges involving intellectual property, data protection, cybersecurity and regulatory compliance.

An acquisition no longer consists solely of assessing physical assets, contracts, liabilities, customers or financial performance.

For many companies, a significant proportion of their value now lies in software, databases, algorithms, intellectual property, technology systems and specialist knowledge.

Determining what a buyer is actually acquiring is becoming harder

As companies increasingly acquire businesses for their technology, data and specialist talent, determining what they are actually buying becomes more complicated.

A technology asset may be extremely valuable while also being subject to contractual restrictions, ownership disputes, licensing arrangements, third-party rights or regulatory risks.

Data may be among a company's most valuable assets, but its use can be restricted by data protection rules and by the consent or purposes under which it was originally collected.

Similarly, a technology platform may appear commercially attractive while containing cybersecurity vulnerabilities capable of significantly affecting its value.

Due diligence is changing as well

Due diligence has traditionally been one of the most labour-intensive parts of an M&A transaction.

Lawyers and advisers review contracts, corporate records, disputes, assets, regulatory obligations and numerous other matters capable of affecting the purchase price or even determining whether the transaction should proceed.

Artificial intelligence can accelerate a substantial part of this document review.

But detecting a clause or identifying an anomaly is not necessarily the same as understanding its legal and commercial consequences.

Technology may identify the risk. The lawyer still needs to determine what that risk means for the transaction.

New assets create new legal risks

The growing importance of technology in acquisitions requires lawyers to examine issues that may have carried far less weight only a few years ago.

These include ownership of algorithms and software, technology licences, trade secrets, database rights, artificial intelligence compliance and cybersecurity measures.

Lawyers may also need to consider how the target company uses customer and employee data, whether that data can continue to be used after the transaction and which regulatory obligations transfer to the buyer.

An acquisition may appear commercially attractive while containing legal risks capable of substantially changing its real value.

Artificial intelligence creates a paradox for M&A lawyers

For lawyers, this creates an interesting paradox.

Some of the tasks traditionally associated with mergers and acquisitions may take less time because of automation and advanced analytical tools.

At the same time, the legal questions surrounding those transactions may become more demanding.

The lawyer's value may shift from manually reviewing large volumes of documentation towards interpreting identified risks, negotiating protections and designing the legal structure of the transaction.

Less document review and more legal judgement

Technology may fundamentally change how lawyers allocate their time during a transaction.

They may spend fewer hours locating information and more time determining what that information means for the client.

This requires understanding the target business, assessing regulatory risks, negotiating warranties, designing indemnity mechanisms and determining which issues justify changing the price or terms of the transaction.

Technological efficiency may reduce the value of certain tasks while increasing the relative importance of work that depends on professional judgement.

International transactions require even greater expertise

Complexity increases when an acquisition crosses several jurisdictions.

Data protection, competition law, foreign investment controls, intellectual property, employment law, technology regulation and sector-specific obligations can vary considerably from one country to another.

A transaction may require different regulatory approvals, international data transfers or specific analysis of ownership rights over particular assets.

Experienced advisers will therefore remain essential, particularly when negotiations involve substantial financial risks or complex international regulations.

Technology does not eliminate the need for legal advice

The message for major law firms is clear: technology may change how transactions are carried out, but it does not eliminate the need for sound legal judgement.

The ability to review thousands of documents automatically is valuable, but an M&A transaction is not decided solely by identifying information.

It also requires assessing risk, negotiating competing positions and determining which decisions are acceptable from both a legal and commercial perspective.

Artificial intelligence may provide more information and deliver it more quickly. Responsibility for the decision remains human.

The future of M&A may be about helping clients make better decisions

Technology may also transform how clients value the work of their lawyers.

If certain document-review tasks require less time, professional value may increasingly concentrate on strategy, negotiation and risk analysis.

This does not necessarily mean that lawyers will become less important to transactions.

It may mean the opposite: their value will be measured less by the volume of documents reviewed and increasingly by the quality of the decisions they help clients make.

The future of M&A may involve fewer hours reviewing documents and more time helping clients make the right decisions.