Artificial intelligence has not upended lower middle market M&A. It is, however, starting to make a practical difference. While human judgment remains essential in deal execution, AI tools are delivering measurable efficiencies in how deal teams manage the process.
The coordination problem
Managing a transaction, particularly on the sell side of a lower middle market deal, often means coordinating dozens of moving parts: diligence requests and responses, disclosure schedules, signature packets, third-party consents, and closing deliverables. Each item implicates interdependencies with other workstreams and deadlines, and a human somewhere who needs a nudge. The work has long relied on sprawling checklists, manual updates, and unending email traffic. AI does not remove the need for coordination, but it is beginning to automate the workstreams that slow it down.
Where AI helps
AI now shows up most clearly in workflow management and document tracking. Systems can read and analyze email correspondence, generate task lists and checklists, update workstream status automatically, and present real-time dashboards of what is complete, what is pending, and who is responsible.
Summarization tools condense long email threads or redline chains into concise updates, thereby replacing the “what changed” memo that previously consumed hours of associate time. Some platforms can identify patterns in delays and flag risk of transaction slippage early.
AI can also serve as the deal team historian. It can retrieve the last version of a disclosure schedule, recall the rationale for a change, or summarize a prior diligence call. When deals pause and restart weeks later, this recall cuts reorientation time.
Judgment still governs
These capabilities do not alter the lawyer’s central role. AI can manage flow, but not substance. Deciding what matters, what can wait, and how to communicate issues to clients and counterparties requires professional judgment. Think of AI as a junior project manager that works quickly and drafts the first version of a closing checklist. Like any junior team member, it needs oversight. Lawyers must validate output, protect confidentiality, and decide which summaries or insights are client-ready.
Practical hurdles in the lower middle market
Adoption of AI tools faces predictable barriers. Many teams are small and still rely on email and spreadsheets rather than enterprise deal platforms. Uploading sensitive data raises confidentiality and security concerns. For smaller deals, the cost and learning curve of specialized software may outweigh the benefit, for now. But as general productivity suites such as Microsoft 365 and Google Docs embed AI natively, these hurdles will ease. The functionality will be there, and lawyers will determine how and when to use it responsibly.
A measured shift
The impact so far has been incremental, not dramatic. However, small efficiencies compounded can result in significant process improvements, such as fewer late-night status emails, clearer visibility into bottlenecks, and more time negotiating instead of coordinating. For lower middle market deal lawyers, the near-term value of AI in transaction process management is evolution rather than revolution, and relief from the administrative drag that comes with managing complexity.
This post was written by David Jaffe who is a partner in the Firm’s M&A practice where he represents founder-led, lower middle market companies in M&A sales and other ownership transition transactions.
