LegalTech/RegTech: Silver Bullets For Legal Professionals?

Photo: Philippe Noeltner, Associate at Allen & Overy Luxembourg / Credits © Kaori Anne Jolliffe / Silicon Luxembourg

Deal management

Luxembourg legal professionals tell the same tale. Documentation volume is mounting. Deal complexity is increasing.

LegalTech solutions can provide a perennial solution to manage complex deals and draft intricate documents. Even if the implementation of new technology depends on a level of standardisation and digitization of legal documents for each industry, some common threads can be identified.

From a drafting perspective, new platforms relying on AI are being developed that read, draft and mark up legal agreements on an automated basis. Recurring comments and common negotiating points can be automatically included in drafts received from opposing counsels and re-uploaded directly on the platform. The first round of comments would be automatic, setting aside time to focus on key changes to be fought over.

Entire legal documents can now be produced directly by software that relies on answers provided by users in tailored questionnaires. This process leaves room to envision and draft deal-specific clauses to better represent your economic advantage. Furthermore, analytics can also be derived to track recurring negotiation points and often-rejected clauses. This enables stakeholders to pick up the clauses that most need amendments. In an additional piece of good news for legal (and non-tech) professionals, no coding expertise is required to use such software!

Regarding signing and closing processes, platforms (accessible for both clients and external counsels) are being developed to provide a more efficient and transparent method for closing transactions. These platforms can collect and organise signed documents in one or two clicks.

Using these LegalTech solutions enables legal professionals to do more legal tasks efficiently, with fewer resources.

“Managing increasing deal flows and regulatory requirements can be done in a more productive and cost-efficient manner.”

Regulatory compliance

A regulatory tsunami has arrived on the shores of Luxembourg since the financial crisis. The compliance departments of startups, credit institutions or corporates have to confront GDPR, MiFID, AML or even EMIR issues at every stage of their business lifecycle.

For example, a booming startup operating across Europe and Asia that is involved in cross-border data transfers or that enters into a currency swap will be faced with a myriad of regulatory provisions. A regulatory risk lingers as managers are not always aware of the regulations that are applicable to the operations at hand.

Such an entity (or its legal advisers) would certainly be happy to know that specific RegTech solutions now exist to comply with various regulatory hurdles. In using such a service, the startup managers would only have to tick boxes on a questionnaire regarding the startup’s planned business activities. A report is then churned out indicating concrete steps to comply with the regulation and the risk of not doing so.

Other RegTech platforms on the market also play a monitoring role in alerting its subscribers when a new regulation has been adopted and what the impacts are for the entity’s operations. This frees up resources and lowers regulatory risk.

The message is clear. Managing increasing deal flows and regulatory requirements can be done in a more productive and cost-efficient manner by embracing the solutions that LegalTech and RegTech have to offer.

This article is brought to you by Allen & Overy Luxembourg and reflects only the opinion of the author.

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