How a Mid-Market Firm Reviewed 2,000 Contracts in 48 Hours

When a mid-market law firm was engaged to represent a private equity buyer on a platform acquisition, the deal team faced a familiar challenge: a 2,000-document data room and a signing deadline that left no room for the traditional three-week first-pass review.

The Challenge

The target company, a regional logistics provider, had grown through a series of tuck-in acquisitions over the past decade. Each acquisition brought its own set of customer contracts, vendor agreements, and employment arrangements, resulting in a data room with over 2,000 documents and no consistent organization.

The PE buyer had committed to an aggressive timeline: 45 days from LOI to signing. With the data room only becoming available on day 15, the deal team had 30 days to complete full legal diligence while simultaneously negotiating the purchase agreement and disclosure schedules.

The math did not work. Traditional staffing would require 4-5 associates working 10-12 hour days for three weeks just to complete first-pass review. That left zero time for follow-up questions, memo drafting, or disclosure schedule preparation.

The Approach

The firm deployed Mage to accelerate first-pass review while maintaining the quality standards the deal required.

Day 1: Document Upload and Classification

The full data room was uploaded to Mage in a single batch. Within 3 hours, Mage had:

• Classified all 2,000 documents by type (customer agreement, vendor contract, employment, lease, etc.)
• Identified 847 material contracts warranting detailed review
• Flagged 156 documents that were duplicates or administrative (not requiring legal review)
• Extracted basic metadata (parties, dates, governing law) across all documents

The deal team could immediately see the scope of material contracts and begin prioritizing their review.

Day 1-2: Key Term Extraction

Mage extracted key provisions across all material contracts:

• Change of control provisions: 234 contracts contained COC language
• Assignment restrictions: 312 contracts required consent for assignment
• Termination rights: 189 contracts had termination for convenience provisions
• Liability caps: 78 contracts had liability limitations worth noting
• Non-compete provisions: 45 employment agreements contained restrictive covenants

Each extraction linked directly to the source text, allowing attorneys to verify findings with a single click.

The Critical Discovery

On the morning of Day 2, the Mage analysis flagged 12 customer contracts with a specific pattern: change of control provisions that prohibited assignment without consent, with automatic termination if consent was not obtained within 30 days of closing.

These 12 contracts represented approximately 35% of the target's annual revenue. If the deal closed without obtaining consents, the buyer would face automatic termination of its most important customer relationships.

This issue had not appeared in the seller's disclosure schedules. Without AI-assisted review, it likely would not have been discovered until weeks into the diligence process, potentially too late to address before signing.

The Resolution

Armed with the Mage analysis, the deal team took immediate action:

1. Client notification: The PE buyer was briefed within hours of the discovery
2. Seller outreach: The target was asked to begin consent outreach immediately
3. Deal restructuring: The purchase agreement was modified to include consent receipt as a closing condition
4. Prioritized review: Attorney time shifted from first-pass review to negotiating consent terms

Seven of the 12 consents required substantive negotiation with the counterparties. Two customers requested contract amendments as a condition of consent. One required a direct meeting between the buyer's CEO and the customer.

All 12 consents were obtained before closing, but only because the issue was identified early enough to manage properly.

The Results

Time Savings

• Traditional approach: Estimated 3 weeks for first-pass review
• With Mage: 48 hours to complete first-pass analysis
• Attorney time: Shifted from document reading to issue resolution

Cost Impact

• First-pass review costs reduced by approximately 70%
• Total deal cost remained similar due to complexity of consent negotiations
• Value delivered: Deal closed successfully vs. potential failure

Quality Improvement

• 12 critical issues identified that might have been missed
• Comprehensive extraction across all 2,000 documents
• Source-linked findings for instant verification

Lessons Learned

The deal team identified several takeaways:

Start AI review immediately. The earlier Mage runs, the more time exists to address discoveries. Waiting for a "clean" data room costs valuable days.

Trust but verify. Mage extractions were highly accurate, but the deal required attorneys to verify critical findings. The source linking made this efficient.

AI changes staffing, not oversight. The deal still required experienced attorneys to evaluate findings, negotiate resolutions, and advise the client. AI handled the mechanical work of finding the needles in the haystack.

Surface issues early. The change of control discovery was only valuable because it came early. The same finding on day 25 would have been a crisis rather than a manageable workstream.

Conclusion

This engagement demonstrated how AI-assisted review can transform deal execution. The 2,000-document data room that would have consumed three weeks of associate time was analyzed in 48 hours, freeing the deal team to focus on the high-value work of resolving issues and closing the transaction.

The critical change of control provisions that Mage identified saved the deal. Without early discovery, the buyer might have closed without necessary consents, facing automatic termination of 35% of revenue. Instead, the issue was identified, escalated, and resolved before signing.