Legal Tech for Transactional Lawyers Newsletter: #12

Why blended fee models can work really well on transactional matters, the release of our new title app, some solid article links and more!

Happy Friday and hope everyone is enjoying fall!  It has a been a little while since the last newsletter as the hurricane season in Florida has been a bit crazy.  Hope everyone has made it through OK.

In this edition we dig into why a blended fixed fee / billable model might work really well in financing transactions and highlight the launch of the Moonstone AI title app.  Article links include a nice video link to demo of agentic AI and several other great reads.  

Hopefully you find it useful and fun.  Please feel free to share with anyone that may be interested and have a great weekend!

Matt Basile

If you find this content valuable, please connect with me on LinkedIn.

🏆Blended Fee Models in Financing Transactions

Due diligence has historically been a black box of cost on transactions due to the large volume of documents that need to be reviewed. 

Associates often bill too much time to the matter and partners can struggle to determine if the cost is justified because they are not reviewing all the documents themselves.  However, you cannot take the risk of missing something important and it takes time to comb through all of the information, so costs remain high and unpredictable. 💰💰💰

As we start to see more and more point solutions that leverage AI to perform specific due diligence tasks in real estate transactions, it might be time to consider a blended fee model to pricing legal fees for the due diligence piece of transactions. 

If you have tech tools to perform the basic review of due diligence tasks, you could put a fixed fee on that part of the transaction, with the understanding that if something complex is discovered, then a billable rate can be applied to that part of the review.

Why stop with due diligence?  Applying this model and new technology, you could take the same approach with the entire transaction and offer a blended fixed fee. 

For example, on a real estate finance transaction it might look something like this:

⚡ Leverage document automation to provide a fixed fee on the first draft of loan documents and deal specific complications might be billable.

🤗 Use AI powered apps to review title, survey, zoning, searches, organizational documents, leases and other diligence items.  Complex issues can be add-ons.

💪 Closing process can be handled by transaction management platforms. An extra fee could apply for disorganized borrowers or rush closings.

🤼 One round of simple negotiations might even be able to be included by leveraging AI search tools to find precedent negotiations.

This would also solve the problem in legal tech adoption where firms are hesitant to deploy technology that reduces billable time because if they can do the fixed fee part of the transaction more efficiently they can make more money and earn more business.  This is a win-win for everyone.🤘🚀🚀

🏅Gen AI Powered Title Review App

Earlier this week we kicked off a 90-day FREE use period for our AI-powered Moonstone Title app! The goal is to run as many title commitments through as possible and get feedback from users.🚀🚀

🖥️ Legal Tech Folks: If you work at a firm with a real estate practice group, you should pass this along to them. This is an easy GenAI win with relatively low effort / risk to implement.

⚖️ Real Estate Lawyers / Paralegals: Give it a shot now. Super easy to use and no training or onboarding needed to get started.

💰 CREF Lenders: Send this to your lawyers to speed up the title review process.

📃 Title Companies: Give me a call to discuss how we can partner to make this available to your clients.

Here is the link if you want to try it out. Very simple to use, just upload a title commitment and within a few minutes you’ll receive the following via email:

📊 Chart listing all title exceptions with recommended actions
📑 Summary of each title document
📂 Link to a zip file containing PDFs of all exceptions
📃 List of suggested endorsements up.

Articles and News

 👨‍🚀Agentic AI - What is Possible?

Big news this week was Claude releasing a new feature called "computer use".  Folks have been talking about Agentic AI for a while now but this short two minute video gives a really nice overview of what might be possible in legal if you use your imagination.  Also, here is a link to the full product description page.

On transactional matters, lawyers pull information that needs to go into documents from a number of places - term sheets, title commitments, surveys, zoning reports, emails and other diligence documents.  Most information does not come from your mind and it needs to be accurate. 

Just this short clip gives me a lot of ideas of what might be possible in corporate and real estate transactions as the next wave of AI agent apps are developed.  You need to use your imagination a little bit, but apps to perform specific tasks are going to get really good soon.

🏨 Selling Legal Tech to Law Firms

Another great article from Alex Su on why selling tech to law firms is hard (it sure is) and why no matter how much tech changes how the legal work is performed, it is going to be very hard to disrupt lawyers out of the work because of how intertwined they are with corporate law departments.  Good stuff and totally agree with this analysis.

🚀 New OpenAI o1 Model Overview

Here is a quick summary of some of the strengths of the new OpenAI o1 model, which spends more time thinking and in theory can reason better on complex tasks.  It will be interesting to see how well this translates to performance and accuracy in legal tech apps under development.