Lawyers today are certainly more open to using document automation for the mechanical aspects of producing first drafts than they once were. Clients are equally delighted when their lawyers hand over a document in a few hours rather than a few days. Yet, in many law firms, the full potential of drafting automation is still not being realised. While lawyers will happily trust automation to generate something straightforward, for the more complicated documents relating to a transaction, such as legal opinions, they are much more likely to be drafted manually, which is both time consuming and laden with risk.
In this article, we propose that when the automation is deep enough, legal opinions can present an untapped opportunity to significantly mitigate risk and to improve efficiency.
What makes legal opinions ideal candidates for automation?
Transactions requiring legal opinions tend to be highly complex and are usually high value. When multiple documents, forms of opinion, parties, and/or jurisdictions are involved, a highly structured approach to producing these documents is critical. Automation systems can be leveraged to great effect to provide interactive guidance and risk control as an integral part of the drafting process. It is also important to plan for the evolution of the automation over time as legal opinion precedents are not static documents.
“Legal opinions might not be the longest of documents, but they are deceptively complex, and there’s no room for error,” says Nicky Ellis, one of Clarilis’ experienced finance PSLs. “These two factors often lead lawyers to conclude that they’re beyond the scope of automation platforms. But at Clarilis, we think this is what makes them ideal candidates for automation.”
When preparing a legal opinion, things can get complicated quickly – and risk accompanies this complexity. For example, consider an opinion that covers Obligors incorporated in multiple jurisdictions with documents ruled by a variety of governing laws. This not only introduces multiple variables, but also lots of opportunity for lawyer error. Lawyers, even those with the very best training, are fallible – especially when working long hours and operating under significant time pressure.
“When drafting manually, the wrong precedent can be used, a junior lawyer can mistakenly add something incorrectly, and an exhausted senior lawyer can miss this error during their review,” Nicky says.
When it comes to legal opinions, your automation needs to mirror how those opinions are traditionally drafted regarding the many aspects/parties/jurisdictions involved in the transaction. This is way beyond simple gap filling and basic logic, going deeply into the transaction structure at the very heart of the opinion. The wording used needs to reflect the latest best practice and must have guidance and prompts to support lawyers and mitigate the risk of drafting error In short, the right drafting platform will be designed specifically to safeguard the quality, integrity and consistency of output.
“The Clarilis questionnaire collects information about the Obligors, statements in the opinion are then tailored accordingly. The automation ensures that, for instance, foreign obligors are automatically excluded from ‘capacity’ opinions, ensuring accuracy and consistency in drafting.” Nicky continued, “It means drafting legal opinions can be delegated to more junior lawyers without an increase in risk,” says Nicky. “Our clients tell us the time taken by supervising lawyers reviewing drafts is typically cut by 50% when using our automations to produce first drafts. This leads to a whole host of other benefits, from better job satisfaction and increased lawyer capacity to deliver added value, to an uplift in margins and a better competitive position.”
Summary: Not automating legal opinions is a missed opportunity
The emergence of deep automation has made it possible to automate legal opinions for complex transactions, with the risk reduction and quality improvements that brings. If you haven’t yet automated your legal opinions, it is certainly something your firm should be thinking about.
Find out how your firm can benefit from automated legal opinions.
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