A brief history of the Model Commercial Lease
The MCL is an important breakthrough in the movement towards standardising and speeding up the drafting of leases. Historically, law firms have tended to use their own lease agreements, with the variation across the market frustrating landlords and occupiers. The days of overly long, wordy leases, cluttered with burdensome clauses skewed to favour one party over another are over. Real Estate lawyers and their clients today favour speed over unnecessarily contentious drafts and have turned to lease documentation that represents a reasonable starting point - needing minimal negotiation and amendment.
"The MCL establishes a fair starting point for negotiations and speeds up lease transactions,” says James Quinn, CEO and co-founder of Clarilis. “At Clarilis, we’re big fans of anything that can be done to make the practice of law more interesting for lawyers. We want lawyers to be able to spend a higher portion of their time on high value negotiation and novel points of law.”
The MCL project incorporates 19 standardised commercial leases plus ancillary documents created to reflect today’s more collaborative relationship between landlords and tenants and the desire to accelerate negotiations. For more information on the background to the MCL, two of the architects of the MCL shared their experience of this project in our previous blog post.
Standardisation + automation = a tried and tested formula
There’s certainly growing momentum for standardisation in the legal industry. Law firms are embracing the opportunity it presents to rationalise their processes. But what’s also emerging is that the efficiency outcomes from standardisation can be further amplified by applying LegalTech.
“It takes a Herculean effort to get standardisation projects like the MCL off the ground, but there are enormous advantages to be gained from it,” says James. “From a LegalTech perspective, all standardisation projects are a fantastic launchpad for accelerating the adoption of technology. Once you've standardised, then you're ready to apply LegalTech to your standardised content or process.”
Using standardisation as a launchpad for automating drafting is a tried and tested formula Clarilis first pioneered in its ongoing collaboration with FromCounsel.
“The MCL isn’t our first standardisation project,” James explains. “Last year, we partnered with FromCounsel to bring a large suite of automated M&A documents to the UK market. A good proportion of the top 100 firms are now using this as the basis of their M&A drafting - significantly exceeding expectations.”
Automating the Model Commercial Lease
Clarilis’ decision to automate the MCL leases and ancillary documents has evolved at a time when competition for fixed fee, routine legal work is driving down margins. We can see that lawyers are under huge time pressure and, at the same time, they are less willing to forfeit their work-life balance to get their client’s lease signed by a deadline. It seemed an obvious progression for us to take the MCL documents and create a pre-automated, off-the-shelf option for law firms.
“Lease suites are one of the first candidates for automation that real estate teams ask us to look at,” says James. “A lot of lease work is fixed cost, with the margin reduced to single digit percentages, or even a notional negative margin. So, one of the most persuasive reasons for applying automation to the MCL content is to increase or turn these margins around.”
The Clarilis innovation PSLs have taken the 19 model commercial leases (together with the rent deposit deed and licences for alterations) and pre-configured the automation so they populate with minimal input from a lawyer. They have also supplemented this MCL suite of documents with the statutory forms of notice and declaration required to exclude security of tenure. The result is a pre-automated, ready-to-use lease suite.
Finding the right automation option for you
Automated drafting is proven to increase the speed of producing first drafts, lower costs and mitigate risk in the drafting process. But not all law firms have the resources, or the settled precedents, needed to realise these benefits. The Clarilis pre-automated MCL package offers an alternative off-the-shelf option. Law firms can now achieve the efficiency outcomes of Clarilis intelligent drafting without investing in a fully customised automation project. Could a pre-automated lease package work for you? Contact Laura Perry, to book a demonstration and see our MCL automation in action.
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