From the proliferation of technological adoption to the emergence of new use cases and ways to win client work, our latest roundtable sparked a lively discussion with our law firm customers on the future of the legal industry and how it has been impacted by COVID-19.
Co-led by Stephen Allen, Head of Innovation and Digital at Hogan Lovells, we explored how the fallout of the COVID-19 pandemic has forced the industry to propel into the digital age, causing law firms to reshape so that they can adjust to the new norm. Beyond the more structural changes, we also examined some of the new client work that we have seen in the market and how Kira is being used to assist with winning and delivering these mandates. While, with some notable exceptions, the traditional M&A and real estate deal cycles have slowed down as a result of the pandemic, there has been a huge increase in the number of reviews that are more typical of an economy suffering from a global recession. With supply chains also being disrupted in a very atypical manner, a number of clients have been assisting large suppliers and buyers with the review of supply and distribution agreements to assess potential exposure, and opportunities arising out of force majeure and termination for convenience clauses.
Lastly, many of our clients are using this down period in the transactional cycle to implement a number of internal use cases, including knowledge management and What’s Market / Deal Points Projects.
Key highlights from the discussion can be found below, and the team at Kira Systems will continue to host roundtable discussions to help customers navigate through these turbulent waters.
How Kira Supports the Work From Home Revolution
As a legal technology company, we have come across a wide array of innovative lawyers who have adopted technology during the pre-COVID-19 period, and we have also come across those who are more so on the conservative end of the spectrum. However, without a doubt, the pandemic has caused conservative mindsets towards technology to shift to one of adaptability as digital transformation has accelerated over the last few months. But, why has it accelerated within the legal industry? From what we have seen from our client ecosystem, it is because lawyers are now working from home as office closures, social distancing, and stay-in-place measures have been implemented, causing an industry-wide adoption of technological tools that are now the epicentre of operating procedures.
Specifically, Stephen stated during the roundtable session that Kira’s project management feature is interesting and one of the misunderstood benefits of Kira. Managing large project teams who are working to meet tight deadlines is challenging, especially when working with large volumes of documents; or looking to address complex issues at home. If there is a communication breakdown, this can lead to critical issues being missed or client expectations not being met. With Kira, teams are provided with a centralised platform that facilitates communication and speeds up the review process. Team members can immediately see a visualisation of the work that remains to be completed, and individual responsibilities are always clear. Project managers can also provide their clients with accurate, up-to-date information about the status of the project and if any issues have been uncovered that require their immediate attention. Digital project management is now the norm and it is crucial for law firms to utilise technology to help streamline processes and push projects forward.
How Kira Supports New Types of Work
On the other hand, the pandemic has resulted in higher volumes of work and increased stress levels as our customers try to advise clients and internal stakeholders from home during these unprecedented times. We are constantly seeing new types of work in the market from consumer actions, to the acquisition of distressed assets and this space is constantly evolving. However, we list some of the more prominent use cases, as discussed in the webinar below:
- Force Majeure and Supply Chain Disruptions: Due to the severity and prevalence of COVID-19 across the globe, there has been an enormous push to assess contractual remedies / risks emanating from disruption of global supply chains. Our clients have leveraged Kira for this very purpose. For example, a Magic Circle law firm in the UK and Pepper Hamilton are using Kira to respond quickly to client demands. Both of the above firms have used Kira to create a force majeure detector tool across an array of agreements to detect their clients potential exposure to the pandemic.
- Helping Financial Institutions: Hogan Lovells launched a COVID-19 solution and interactive map for financial institutions using Kira in conjunction with their internal expertise and other softwares. Kira is being used to extract key pieces of information from finance documents to determine how such documents are impacted.
- Real Estate (Recession): The impact of government lockdown measures brought in to tackle COVID-19 has been significant across the commercial real estate industry. The fallout triggered by these measures, as well as other economic factors, has been felt by both landlords and tenants alike. Kira can be used to quickly identify potential risks and exposures that both landlord and tenants have been exposed to.
In addition to those use cases above, we have also seen a large volume of work in the employment and government sectors around furloughing and government relief to impacted businesses. Kira has also begun to be used on consumer actions that have arisen due to claims made as a result of parties’ failure to fulfil contractual obligations during this pandemic.
How Kira Supports Internal Use Cases
Kira is perhaps best known for the ability to step into the traditional due diligence process.
However, due (in part) to a slowdown in the M&A and real estate deal cycles, a number of clients have been working on internal projects to improve their knowledge management resources.
One such example of this is the increased prevalence of What’s Market? / Deal Points studies being undertaken by our client base. It is increasingly the case that even leading law firms can no longer rely on simply completing pieces of legal work for their clients. Clients expect their advisers to provide additional data surrounding the total body of work so as to establish market trends and to negotiate in a more effective way. This has traditionally been a very popular process in North America but has become increasingly popular in the UK with Taylor Wessing conducting a very effective What’s Market? study in the venture capital space using Kira’s machine learning to detect and analyse heavily negotiated provisions in transactional documents.
Beyond What’s Market? exercises, general knowledge management projects within law firms often rely on professionals taking the time and effort to capture what they learned during an engagement and sharing it with a knowledge management team. With more urgent work often taking precedence, knowledge management efforts may not be a priority and valuable insights may be overlooked. With Kira, however, lawyers can automatically capture knowledge both during and after the completion of a project and easily share it with other team members. In this instance Kira can be used to identify key document types, provisions and deviations from model forms, which can greatly streamline the knowledge management process.
While the global social and economic climate is constantly changing, it would appear that the continued expansion of technological application within the legal industry will proceed at full steam. In terms of what kind of client work we expect this technology to be applied to, we expect the following:
- Recession Mandates: A number of mandates triggered by the global recession including restructurings and the acquisition of distressed assets.
- M&A Bounceback: It may be that value can be found in the global M&A market in Q3 and Q4 of 2020 triggering an M&A bounceback being driven by large funds and corporates.
- Fixed Fee Cap Work: In a number of jurisdictions, fixed fee cap work will become the new norm. Utilisation of technology will be crucial in maintaining profitability.
- Consumer Actions: The continuation of consumer actions against parties that have allegedly failed to comply with contractual obligations as a result of COVID-19.
For more information on any of the above content or for a more general discussion on market trends, please contact Patrick Skinner who leads our practice consultancy function in EMEA and APAC. You can also visit our COVID-19 resource center as we continue to leverage our expertise to support our customers and community.