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How AI is transforming the way law firms complete client Enhanced Due Diligence

lawyer being stuffed with paper for manual EDD

Law firms have already woken up to the reality that many of the tasks that back-office staff or fee earners have done manually, can now be started using AI. Enhanced due Diligence (EDD) is a research task ideally suited to AI, so humans can make better informed risk decisions. In this race to embrace AI, there will be winners and losers, and in this post we examine how law firms can best use AI in EDD.  

The current state of Enhanced Due Diligence at law firms  

Most law firms still rely on time-intensive manual processes for Enhanced Due Diligence (EDD), whether for client onboarding, research into litigation subjects or background checks for M&A matters. This manual approach creates several critical challenges:

  • Non billable hours: Senior associates and partners spend valuable billable hours on research tasks rather than strategic analysis and client advisory work
  • Time vs quality pressure: Partners expect comprehensive due diligence results within tight deadlines, creating impossible trade-offs between speed and thoroughness
  • Inconsistent coverage: Manual searches can miss critical information, particularly in non-English sources or across multiple jurisdictions
Pockets of innovation…some enterprising MLROS and law firm librarians are embracing Large Language Models

Some forward-thinking MLROs, compliance teams, and firm librarians are already experimenting with general-purpose Large Language Models to assist with EDD tasks. They're using these tools to translate foreign language sources, or help structure EDD research. While these early adopters are seeing some efficiency gains, they're also discovering limitations. LLMs will:

  • only perform simple searches that don’t pull back all the available information
  • struggle with entity disambiguation and preventing false positives
  • have no in-built guardrails to determine which sources should be used
  • hallucinate information creating false inferences
  • create a swivel chair problem when blending open-source findings with PEP, sanctions and AML compliance datasets  

This experimentation reveals the appetite potential and the need for purpose-built solutions designed specifically for law firms conducting EDD.

How DeepDive improves on general purpose LLMs to improve the strength of depth of EDD, in a fraction of the time 

DeepDive is an AI powered platform that speeds up EDD processes and extends the horizon of financial crime investigations using AI to create a broader more global EDD dataset that translates into better AML and AFC decisions. 

How DeepDive Works:

  1. Advanced Search – Executes complex, multi-language, alphabet and browser queries, tailored to the geographic scope of your investigation that go beyond manual search or basic LLM querying.
  2. Natural Language Processing – Aggregates, processes, and analyses vast amounts of data from hundreds or thousands of sources in any language.
  3. Entity Resolution – Filters out false positives, ensuring that only relevant sources linked to the correct subject are retained.
  4. Body of Knowledge – Our AI-driven prompt engineering extracts key statements, assesses source credibility, and cross-references findings to build a structured intelligence framework, with full citations.
  5. Generative AI Report & Chatbot – Synthesizes the Body of Knowledge into comprehensive reports, revealing key insights such as known associates, locations, business links, sources of wealth, political connections, and criminal activity
Five ways DeepDive change the game for EDD at law firms..
  1. Superior due diligence = ability to serve higher-risk, higher-margin clients
  2. Faster EDD = less human capital spent on non-fee earning activity and higher profit margins
  3. Compliance confidence = ability to expand into new emerging markets
  4. Operational efficiency = capacity to scale without proportional cost increases
  5. The MLRO can leave work on time for once! 
But…before you jump into the arms of AI…

 As these technologies mature, law firms need to evaluate several key considerations. First, there's the ROI potential—could automation of routine research tasks genuinely free up fee-earners for higher-value work? Equally important is quality assurance: how do firms ensure AI-generated research meets the professional standards expected in legal work?

Client expectations are also shifting. Are clients beginning to expect faster turnaround times that manual processes simply cannot deliver? And from a competitive positioning standpoint, will firms that adopt these tools gain advantages in winning complex, international matters?

Finally, from a risk management perspective, does comprehensive automated research actually reduce the risk of missing critical information, or does it introduce new challenges that need to be understood and managed?

We would love to find answers to these questions with you and understand your current EDD challenges.