Lawtech

Situation

As fund managers grapple with larger numbers of investors at higher commitment targets and across multiple jurisdictions, managing these fundraisings requires a considerable change in approach.

It’s vital to address the potential bottlenecks and inefficiencies in this process, particularly in collecting investor information to populate legal documents, such as subscription agreements and other compliance documentation. Manual data collection for such a document-heavy process can be time consuming and introduce the risk of manual error – particularly in larger fundraisings when the number of investors can run to the hundreds.

Action taken

Our Lawtech team has developed “Onboard”, an alternative delivery solution to tackle these inefficiencies and pain-points. Onboard is a digital tool designed to make data collection easier, using a series of “smart” questionnaires to gather data from investors directly, in one specified format and without duplication. Onboard also provides real-time oversight of fundraising and commitment progress, providing a single point of truth for all information relevant to the fund and allowing ease of access for all relevant parties such as fund managers and administrators.

We considered the following key aspects of investor onboarding in our design:

• customisation and flexibility: allowing investors to take different approaches to providing their data and adjusting the solution to their requirements;
• objectivity: ensuring the alternative data collection process actually saves time and avoids user error;
• presentation and visualisation: structuring collected data in an intuitive and easily understandable way; and
• user experience: keeping the process familiar while making it more manageable for both investors and fund managers.

Impact on our clients

Onboard has transformed what was a complex and time-consuming process into a streamlined technology-enhanced system, for the benefit of clients and third-parties. By centralising information collection, Onboard has streamlined the fundraising process, making it easier to manage multiple fund launches and allow clients – and other parties – to track progress in real time.

Situation

Commercial real estate transactions are notoriously complex and involve a high volume of documents, making it tricky to conduct detailed legal analysis, and refer back to it post-completion. In addition, our lawyers traditionally need to spend a lot of time processing, formatting, and compiling relevant documents for client review. Our Lawtech and Real Estate teams met to devise a solution that achieved three key objectives:

• collating all transaction information into one platform shared between the firm, our client, and their advisers;
• making the report on title much more user-friendly and simpler to navigate so that clients can quickly glean headline details, but also deep dive into the granular details of the property, transaction and analysis, if needed; and
• ensuring clients could easily locate transaction documentation and advice post-completion, and access those on an efficient self-serve basis at any time and place.

Action taken

Our Real Estate and Lawtech teams worked together to create an online transaction report portal, closely collaborating on the portal’s design and functionality through an iterative build process. The portal centralises transaction documentation and gives clients a fully interactive version of the final report on title that breaks down detailed legal advice into digestible sections.

With the various user pathways available, clients and their advisers can easily find high-level information or more detailed analysis as required. Key dates and deadlines are built into the portal’s online calendar for effective tracking. The portal also provides seamless links through to associated title plans, illustrations, searches, reports, insurance documents, policy documents and deeds so that everything is just one click away. Clients who want to print the report (or sections of it) to review in hard copy can do so, but the portal is also fully accessible from any device.

Impact on our clients

Clients are impressed with the user-friendly and intuitive design, and the speed at which portals can be created. Now that post-transaction information is readily available online, clients no longer need to request documents from us – they can simply view or download them whenever and wherever they need them. Clients value the straightforward and accessible nature of the portals, acting as a one-stop-shop for all transaction information.

Situation

Our Finance team completes Companies House checks for every transaction, reviewing the borrowing and guaranteeing companies’ articles of association for important provisions including their ability to borrow, guarantee and give security.

Typically, this would be a manual process whereby a fee earner would review companies’ constitutional documents, details of charges and persons with significant control and complete the checklist. This process is time-consuming, particularly where there are a large number of companies which need to be checked.

Action taken

The Lawtech team designed a process that combines automation, AI data extraction and process improvement to download company filings, extract relevant information and upload them to our AI tool. This is then used to complete the checklist, which is then returned to the  Finance team to review.

Impact on client

By creating a hybrid process, pairing cutting-edge technology with manual oversight, the Lawtech team created an improved model for completing company search checklists. This created a more efficient process and allows fee earners in our banking and finance team to focus on the legal aspects of a transaction.

Situation

An existing client of the firm, the family office of an international family, approached us with concerns about evidencing their residence position.

The UK statutory residence test determines whether an individual is UK resident. It balances connecting factors to the UK, such as family, accommodation and where else you are based, with how much time you spend on UK soil. The more connecting factors to the UK, the less time you need to spend in the UK to be deemed resident.

As a high-profile and mobile family, our client required a solution to allow them to manage and record their time and activities in the UK in order to evidence their residence position.

Initially our client approached traditional IT providers, but chose Macfarlanes to build a bespoke solution for them due to our ability to combine our knowledge as their existing legal advisers with technological solutions.

We created a bespoke portal that allows family members to record their time, manage their activities and upload supporting evidence (photos, calendars, email records, location services). The portal also provides management elements for the family office, to allow them to review each family member’s activities to ensure future activities continue to fall within the rule of the statutory residence test.

Action taken

The initial step was to scope the solution. The Lawtech team held initial exploratory meetings with our client to discuss the parameters for what they wanted to achieve. Lawyers in the Private Client team supplemented our client’s requirements with their technical understanding and application of the statutory residence test to our client’s circumstances.

Once the bespoke product had been built, it was subject to extensive testing by our client, with feedback sessions that allowed for further tailoring and updating of the product.

To ensure a smooth launch, training was rolled out across the family office and to family members.

Impact for our client

The solution was completed in mid-2020 and the family have built the solution into their day-to-day lives. Managed by their family office, they have comprehensive records available to evidence their residence position, both for their internal records and for third parties, should the need arise.

Situation

Awarding carried interest is a complex and time-consuming process that requires close oversight and careful management, particularly around the confirmation of participations and sharing sensitive data with awardees. Every year, our Tax and Reward teams undergo an intensive 2–3 month period to produce relevant award documentation for recipients of a key client’s carried interest awards. To streamline the process the Lawtech team were asked to develop a solution that:

• reduces the time taken to allocate the relevant documents for each recipient;
• reduces the time taken to draft each document; and
• creates a centralised portal for data insights, document storage and process management.

Action taken

To achieve these goals, the Lawtech team’s starting point was to carefully examine our client’s existing processes and the people involved.

The existing process involved a complex decision tree for document allocation which was manually used to assign documents to each recipient. The relevant decisions apply at a fund level so if a recipient was awarded carry points for several funds, then the process of document allocation needed to be repeated several times for one individual. Each document would then be manually drafted, and several documents may be required for each individual.

The first step was to digitise the decision tree so that the entire document allocation process could be automated. Custom logic was created to determine each document allocation based on various factors such as whether awards were being allocated for the first time, the relevant jurisdiction, and whether the award value was significant. 

The Lawtech team then used document automation technology to mass produce all documents required for our client. Both the document allocation and document production processes were completed simultaneously. As the automation capabilities were embedded within a centralised portal, our client had a place where they could easily house all generated documents. As well as acting as a document repository, the portal also helps to streamline process management through automatic notifications, workflows, integrated e-signing and data insight pages.

Impact for our client

The team was able to reduce a complex decision and drafting process from up to three months to just over an hour, for 112 award recipients. Our Tax & Reward team also appreciated the use of a centralised portal to streamline the bulk download and organisation of documents for signing.

Situation

Our Litigation team were approached by a client to undertake a sizeable disclosure project, with just a few weeks to deliver results. The task involved sifting through at least three million documents to find potentially relevant information.

Action taken

Given the short timeframe, the team opted to use Everlaw’s machine learning tool with predictive coding to efficiently manage the volume of documents, rather than a traditional linear review with keywords. After rigorous training sessions, the model scanned the entire data set identifying a subset of less than 1% of the documents that required manual review. Throughout the process, the CMU team ensured the approach was robust and defensible by monitoring and fine-tuning the predictive coding algorithm, continuously assessing its accuracy and adjusting training sets as needed. 

Impact on client

With this technology assisted review, the set of around three million documents was narrowed to just 27,000, reducing the review volume by 99%. Predictive coding not only streamlined the process but also saved our client over £1m in review costs.

Situation

Our client received a Data Subject Access Request (DSAR) from a former employee which required it to supply a copy of all the personal data it held relating to that former employee. The client’s search found around 1,000 potentially relevant documents that required manual review, and we faced a tight four-day deadline to complete the review and production process.

Action taken

Our Case Management Unit processed our client’s data with the Everlaw review platform and, using a combination of bespoke workflows and Everlaw functionality, we streamlined the first-level review process. This involved using exact content de-duplication to weed out duplicate documents, and using Everlaw's “text select” feature, which allowed the legal team to quickly and efficiently identify relevant personal information for disclosure.

Impact on client

By applying the right tools and workflows, we successfully completed the DSAR exercise within the four-day deadline. The CMU team exported the highlighted data in under an hour, allowing the legal team sufficient time for review and to make any final adjustments to the DSAR schedule.