How it works in a data room
The reviewer selects a folder of contracts and chooses the clause types to find. The system locates each clause, quotes the relevant text, classifies it, for example “consent required” or “no restriction”, and links back to the page. Results appear as a spreadsheet-like grid with one row per contract, which reviewers can sort, filter and correct. Corrections may improve later results within the same project. Output can be exported for the diligence report, subject to the room’s download rules.
Why it matters in a deal
Legal due diligence on a target with thousands of contracts used to mean junior lawyers filling in tables by hand. Extraction speeds that up and makes coverage more complete, since every contract is at least screened. The output is a starting point: unusual drafting, amendments in side letters and poor scans can lead to misses or wrong classifications. Reviewers should check a sample and every contract marked as material.
Example
A buyer of a distribution business runs extraction on 3,200 supplier and customer contracts for change of control, exclusivity and termination for convenience. The grid shows 210 contracts needing consent on change of control. Lawyers verify each of the 210 and a random sample of the rest, then build the consent plan for closing. The legal industry guide covers how law firms use rooms.