The client would be keenly awaiting their draft, and the junior lawyer would once again need to let down the friend they had planned to meet that evening. Not the best situation for all, but it was accepted as ‘the way things have always been’ for banking lawyers, maybe even seen as a rite of passage.
Good news! Technology has stepped up to shoulder the burden! In recent times, greater reliance on digital platforms has highlighted the inefficiency of the outdated working methods some were clinging to. On the other hand, it has also accelerated the progress of law firms who have a defined innovation strategy and the right mindset to accelerate ahead of the competition.
Deep automation for banking and finance lawyers is specifically designed to handle complex legal drafting and deliver clear ROI of their investment, as many will testify to. Firms that are tech-wary are now seeing the ‘pace setters’ reap the benefits.
Moving on. Moving faster. Engage.
If you are old enough, cast your mind back to Star Trek: The Next Generation and how it was back in the day with the tablets (PADDs) used on the USS Enterprise. The instrument that helped the crew save countless civilisations under the control of Captain Picard is now the everyday item we know and love, in our pocket. At some point, new tech inevitably becomes BAU. Don’t get left behind.
It can be helpful to hear from those who stay a step ahead, willing to share insight on their journey and the pitfalls to avoid. I recently spent time chatting with banking and finance partners from our client base who shared with me the impact automated drafting of complex document suites has had on their clients and lawyers. The desired end result is a good place to start, I am told, and then work back from there.
Starting with the key drivers, Richard Oman from Addleshaw Goddard, Rachael Ruane from Burges Salmon and Rebecca Dury from Ashfords, share a universal appreciation that clients won’t settle for law firms that are still doing things the way they were done five years ago.
‘We are in a competitive market, and this means we have to be efficient,’ Richard Oman, Partner Corporate Lending and Borrowing, from Addleshaw Goddard explains. ‘Larger lenders in particular are very interested in what we’re doing from an innovation perspective, and I think they would be surprised and disappointed if their panel firms didn’t have a focused approach to innovation.’
Clients of course, also have digitally enhanced expectations, forever squeezing more value from their legal spend.
‘By offering automation to clients, we’re showing we’re prepared to put the upfront cost into developing an automated precedent suite for them because we believe in their businesses,’ Rebecca Dury, Partner and Head of the Banking and Finance Team from Ashfords, told us. ‘I think our lender clients really appreciate this.’
As innovation transforms the competitive landscape for law firms, it’s creating opportunities for practices to claim market share in areas where the largest firms previously dominated. ‘If you innovate and use tech in the right way, it can act as a really good leveller,’ Rebecca adds. ‘Automation is a great differentiator and allows Ashfords to compete with some of the larger firms with deeper pockets.’
The automation-driven competitive edge
Accelerating the pace of transactions, naturally brings competitive advantages. With deal timelines increasingly compressed, the use of technology has become essential to meet demanding deadlines.
‘By using automation to generate a speedy base level of document, we can tailor it and get something out to a client sometimes within two hours of being instructed,’ Rebecca told us.
Plus, this isn’t about churning out standard documents. For Burges Salmon, a compelling case for automation is the freedom it gives their banking lawyers to focus less effort on replacing ‘facility’ with ‘facilities’, and more on adding the legal insight that drives the success of a transaction.
‘We’ve worked out that for long-form facility documents, the time-saving from automation is approximately 80% from starting a term sheet to having a first draft of a facility ready to go to the clients,’ Rachael Ruane Partner, Banking and Finance Team from Burges Salmon, reveals. ‘This gives our lawyers more time to pick through an awful lot of optional drafting and provisions once they’ve done the automation.’
‘Working in a generally fixed fee environment means unless the scope changes, there’s no opportunity for a fee uplift,’ Richard says with honesty. ‘Our people were having to work too long and too hard, trying to get first drafts out. Producing those first drafts shouldn’t have been taking the time they were taking. We needed to be able to turn things around quicker.’
What does this mean for banking lawyers in the future?
Will automation diminish the future role of the banking lawyer? Gareth Grand, Banking and Finance Associate at Burges Salmon, who uses Clarilis, gives his view.
‘If I was coming into the profession now, I’d be questioning the need to spend hours making manual changes to a document when there is clearly a more efficient process. It’s easy to still look back and see how the answers you input into the Clarilis questionnaire affect the shape of the document. You don’t lose out by not learning how to change a hundred references from ‘Lender’ to ‘Lenders’.’
Finally, how to answer those who see automation as the enemy of the craft of manual drafting.
‘In many ways it’s the same challenge that we had when we first introduced our paralegal team – some of the concerns are the same, such as how are trainees going to learn if we take it away from them?’ points out Richard Oman. ‘It’s important to recognise that document automation doesn’t produce a finished document. It produces a much more advanced form of a precedent, which you still then need to work through and draft. What we’ve got to do now is look at how we train people in these new ways. We can’t simply pretend they don’t exist.’
Join Richard Oman, Partner, Corporate Lending and Borrowing and James Tapscott, Senior Manager – Innovation and Technology from Addleshaw Goddard on 25th November at 12.30pm when Clarilis is hosting a webinar exploring the role of deep automation in banking and finance transactions and what this has achieved for Addleshaw Goddard, in support of their overall innovation strategy. You will also see first-hand how to achieve this with a demonstration of an automated Leveraged Facility Agreement and a Legal Opinion. Register here.