LONDON (Reuters) - The entrepreneur behind British software company Autonomy has invested in a start-up called Luminance that uses artificial intelligence to read documents and speed up the legal process around deals, potentially cutting out some lawyers.

Mike Lynch, who founded technology investment fund Invoke Capital after leaving Autonomy, said on Wednesday he saw great potential in Luminance, which was set up by Cambridge University students and has worked with lawyers at Slaughter and May to develop software to analyze documents.

"You can see the excitement around things like driverless cars, so this being all about contracts doesn't sound quite as riveting, but I actually think it's going to have a very big impact" Lynch told Reuters.

"Lawyers will be able to do the things that matter rather than the grunt work, they can add better value by doing better analysis of what is found, rather than trying to plough through 50,000 documents."

Founded by a combination of lawyers, experts in deals and mathematicians, Luminance has created software that it says can read and understand hundreds of pages of documents every minute, with clients charged according to usage.

Lynch said Invoke had invested in the low millions and expects to invest more in the future.

Sally Wokes, a deals partner at Slaughter and May, said the process of conducting due diligence ahead of a transaction was becoming increasingly difficult due to the amount of documentation available about an organization.

"Trying to trawl through all of that when you're doing a transaction in order to understand the issues has become pretty much an impossible task," she said.

Lynch established Invoke Capital after he left Hewlett-Packard Co in 2012 in an acrimonious split over the $11 billion acquisition of Autonomy by the U.S. company less than a year earlier.

(Reporting by Kate Holton; Editing by Mark Trevelyan)