Lawtech

Situation

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

Addressing the potential inefficiencies in this process is vital - bottlenecks can form in collecting investor information intended to populate legal documents, such as subscription agreements and other compliance documentation. For a document heavy process such as this, manual data collection can be prone to delay and there is risk of manual error – particularly when investors can number in the hundreds for larger fundraisings.

Action taken

To address these spotted inefficiencies and pain points, our lawtech team developed an alternative delivery solution called “Onboard” – a digital tool intended to ease the data collection process for investors. It uses 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.

In deciding upon and designing the solution, key aspects of investor onboarding were considered:

• 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;
• User experience: keeping the process familiar while making it more manageable for both investors and fund managers.

Impact on client

Onboard transforms a complex and time-consuming process into a streamlined technology-enhanced system, for the benefit of clients and third-parties. It streamlines the fundraising process by centralising the information collection process and helps to manage multiple launches. The tracking functionality keeps the client and other parties updated in real time.

Situation

Commercial real estate transactions are notoriously complex and involve a high volume of documents, making detailed legal analysis tricky to navigate and refer back to post-completion. In addition, the firm’s lawyers 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, the client, and their advisers.
• Making the report on title much more user friendly and simple 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.
• 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 navigate to 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 for the client

Clients are impressed with the speed at which portals can be created and their user friendly and intuitive design. The fact that information is readily available for clients to refer to post-transaction has significantly increased efficiencies so that clients do not need to request documents from the firm – they can simply view or download them at point of need. The portals currently act as a one-stop-shop for all transaction information, and clients have valued the straightforward and accessible nature of the solution.

Situation

Our banking and finance team require companies house checklists to be completed in each transaction. These checklists review the borrowing and guaranteeing companies’ articles of association for important provisions including their ability to borrow, guarantee and give security.

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

Action taken

The lawtech team designed a process where a combination of automation, AI data extraction and process improvement are used to download company filings, extract relevant information and upload them to our AI tool. This is then used to complete the checklist and return to the banking and 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 creates a more efficient process and allows fee earners in our banking and finance team to focus on more legally complex aspects of a transaction.

Situation

An existing client of the firm, the family office of an international family, approached regarding 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, the 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 the 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 techno-logical 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 the client to discuss the parameters for what they wanted to achieve. Lawyers in the team supplemented the client’s requirements with their technical understanding and application of the statutory residence test to the client’s circumstances.

As a bespoke solution, once the product was scoped the build was subjected to extensive testing by the client. Feedback sessions allowed for further tailoring and updating of the product.

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

Impact for the 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 also for third parties should the need arise.

Situation

Awarding carried interest is a complex and time-consuming process. Confirming participations and sharing sensitive data with awardees requires close oversight and careful management. Every year the firm’s Tax & Reward team undergoes 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:

• Reduce the time taken to allocate the relevant documents for each recipient
• Reduce the time taken to draft each document
• Create 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 the 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 decisions relevant 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 per 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 the client. Both the document allocation and document production processes were completed simultaneously. As the automation capabilities were embedded within a centralised portal, the client had a place where they could easily house all generated documents. In addition to acting as a document repository, the portal also assists with streamlining process management through automatic notifications, workflows, integrated e-signing and data insight pages.

Impact for the client

A complex decision and drafting process that typically took two to three months was reduced to just over an hour for 112 award recipients. The firm’s Tax & Reward team also appreciated the use of a centralised portal to streamline the bulk download and organisation of documents for signing.