Why law firms and legal departments should convert their precedent documents into intuitive software applications
Let’s all be honest with each other fellow transactional lawyers. The vast majority of the time you spend “drafting” legal documents will involve:
- Filling in blobs;
- Removing square brackets;
- Endlessly inserting the exact same information into the main body of the agreement (don’t forget the schedules!);
- Ensuring that those really annoying little dots in the tables in a prospectus line up properly (brings back nightmares for me);
- Checking capitalisation of defined terms;
- Fighting with number list styles;
- Updating field codes and stressing over the table of contents; and
- Trying to locate five other recent deal documents from your document management system to ensure the provisions in your draft are “market standard.”
Clients are becoming warier of paying their lawyers high fees for such tasks that could easily be performed in a more efficient way. There must have been many times when you stopped to think about how assignments such as pagination, formatting, photocopying, bundling, sending simple emails, bibling and pulling together precedents were being charged for at hundreds of pounds per hour? Have you ever felt a little guilty when filling in the narrative in your time entries knowing that someone with no legal training could probably have achieved the same result?
With respect to drafting, there are few situations that require completely bespoke, “from scratch” drafting in your legal document, especially for initial drafts. You will most likely be tinkering with a precedent that contains the guidance notes, blobs, brackets and bolt-ons that you need to shape the precedent to the facts that you have at your disposal. In the transactional space, those facts are likely to be based on the companies involved in the deal, their industry sector, geographic location, corporate structure, deal value and other standard deal variables.
Producing these initial drafts can therefore often be a largely administrative and organisational process, with the occasional smattering of smart logical thinking to ensure you are not veering wildly off-market.
Every lawyer will adopt their own processes when pulling together a draft contract to send to their client or counterparty. Some will work off a previously negotiated deal document that they are familiar with, others will use a standard form precedent and build in the necessary clauses by reference to similar deals. Regardless of how the project starts, you can be sure that the strategic, value-added component to a lawyer’s role becomes rapidly replaced with document administration.
This is where Neota Logic’s no-code software applications can help. When powered by a robust reasoning engine, such applications will use data gathered from users at runtime, apply logic and reasoning to such inputs and will then produce a tangible output (word/pdf document, on-screen message, emails, reports, etc). In the scenario described above, the resulting output would be an initial draft of a deal document.
Rather than battling with complex Word documents, the lawyer tasked with producing the draft can instead interact with a neat, easy-to-use application. The app will ask questions designed to elicit the key variables that are required to populate the document, leaving the lawyer to focus on facts and logic rather than formatting and admin.
Once a document is created via the app, it can be sent to the client/counterparty in the app itself. They will receive a hyperlink to the app that grants them restricted access where they can review and comment on the document and send it back to the lawyer. Think about all of the time saved scrolling through lengthy email chains marked “see comments below in red!” An application creates a single source of truth that gets around complex versioning issues which I’m sure every lawyer will have faced at some point in their careers.
When a document is close to being agreed, a series of internal approvals can be initiated and the documents can be signed by all parties in the app itself via e-signature integration. After signing, the executed document can be circulated to all relevant counterparties, with all information including the key variables stored on a secure database and immediately searchable and accessible by the firm.
This could not get any better from a knowledge management perspective. What was the liquidation preference on the previous VC deal we worked on? When did we last use Warranty & Indemnity insurance to close an M&A deal? What risk factors did we incorporate in our prospectus for the last three Kazakh issuers we acted for? All of these questions can be answered immediately if deal documents are created through apps rather than through Word docs. A few quick clicks in the back-end of a database and away you go.
Vinay is a Senior Solutions Engineer at Neota Logic, where he designs and builds software applications for law firms and in-house legal teams using Neota Logic’s no-code AI automation platform. He spent 8 years as an M&A and capital markets lawyer at US law firms and investment banks before moving into the legal tech industry, where he has gained experience in product development and commercial strategy.