Surviving to Thriving: How Kira Can Help You Prepare for the New Normal

Written by: Kira Systems

August 31, 2020
Industry Trends

9 minute read

From market trends to evolving use cases, our latest roundtable focused on sharing insights to help our customers thrive as the legal industry undergoes significant changes.

As part of the discussion, our legal knowledge engineering team shared valuable information on the strategic approaches law firms can take to stay agile and how Kira’s recent product development can help. This was particularly important because 65% of participants noted they’ve experienced increased client demands for the use of technology since COVID-19 began to impact the market.

The use of technology, specifically contract review software such as Kira, allows a business to remain agile and make informed decisions quickly. They achieve this by knowing what rights they or their counterparties may exercise in order to reduce spend and minimize risk exposure during challenging times. Developing a thorough strategy for your business is dependent on understanding all details within your contracts, and as detailed throughout the session, Kira enables you to do just that. This played a major role in the discussion as businesses are looking more closely into how best to mitigate risks and losses.

Poll Results

What are some of the biggest changes/trends you’ve seen at your organization?

  • Slowdown in traditional deal flow: 43%
  • Uptick in non-traditional work: 35%
  • Client pressure for reduced fees/fixed fee arrangements: 57%
  • Increased client demand for use of technology: 65%
  • Nothing really, business as usual: 4%

While essential to share our thoughts, we also felt it important to present practical insight from industry leaders who have been at the forefront of the crisis working hard to ensure their organizations thrive. On that note, we spoke with Richard Robbins, Director of Knowledge Management at Sidley Austin LLP, who specializes in the application of innovation and knowledge management technology, to share some of his insights and experiences. Key highlights from the discussion can be found below as well.

As expected, there has been significant stagnation in traditional workflow resulting from a slowdown of corporate and real estate M&A. The market uncertainty has made valuations a lot more challenging, which obviously impacts deal flow.

However, as a result of this stagnation—and likely out of necessity—there has been an emergence of new work as well. There is the initial contract analysis resulting from COVID-19, including large-scale review for force majeure and termination for convenience provisions. In addition, some traditional use cases are starting to re-emerge, such as bankruptcy and restructuring, as well as general recession planning.

Despite the slow down, it appears that Kira can still be utilized to address the recent events and the resulting new work. Specifically, Kira can assist with bankruptcy and insolvency related diligence, as well as comprehensive recession analysis across a number of practice areas like general commercial, banking and real estate. Beyond those emerging use cases, Kira can still provide value across a number of use cases unaffected by COVID-19, such regulatory and compliance related reviews, market intelligence gathering (i.e., Deal Points) and utilizing Kira’s general project management/collaboration tools as workforces shift to working from home.

With that, below are some key learnings related to each of these evolving use cases, shared by our team of in-house legal experts.

Kira’s Evolving Use Cases

Corporate & Commercial

The challenging economic conditions brought on by COVID-19 are having a significant impact on customer-supplier relationships. As customers, many organizations are trying to figure out how to limit spending as much as possible. In doing so, they may try to delay payments, reduce existing orders, or terminate certain supplier relationships completely. At the same time, customers are also concerned about the ability of their key suppliers to continue to satisfy their performance obligations in this difficult environment. As suppliers, organizations are grappling with the same issues, though from the opposite point of view.

Regardless of whether an organization is evaluating its relationships from the perspective of a customer or a supplier, it will need to undertake a review of its contracts in order to understand its rights and obligations. To address this need, Kira has curated a group of smart fields that are intended to identify and extract important concepts within commercial agreements so that organizations can quickly evaluate their options and respond effectively.

These key concepts include:

  • Customer/supplier commitments (Kira smart fields include: Payment Due Dates, Interest on Overdue Payments, Minimum Purchase Amounts, Exclusivity, Performance Obligation – Supplies, Purchases and Sales)
  • Relief from contractual obligations (Kira smart fields include: Force Majeure, Force Majeure – Public Health Events, Hardship)
  • Termination options (Kira smart fields include: Purchase Order Changes/Cancellations, Termination for Convenience, Termination for Cause or Breach)
Real Estate

Real estate has been heavily impacted by COVID-19 this year because of government lockdowns. Even as businesses have started to re-open, public apprehension about resuming public activities persists, resulting in a slow consumption rebound. The result is that landlords and tenants are trying to mitigate their losses as best they can.

Tenants are reviewing force majeure provisions in their leases (we wrote a study on whether or not force majeure clauses in leases may effectively eliminate rental obligations for tenants and found that, for most, it is unlikely), and to business interruption insurance. Landlords, on the other hand, are trying to get paid wherever they can, so they are looking at remedies under their leases—if the local government has not put a stay on evictions for residential and commercial tenants.

How Kira can help:

For tenants—review of leases to determine:

  • Whether the tenant is excused from obligations to pay rent (Kira smart field: Force Majeure (Lease)
  • Whether the tenant has a right to close termination options (Kira smart field: Unilateral Tenant Termination Right – Lease)

For landlords—review of leases to determine:

  • Whether the landlord can call a default if the tenant is insolvent or in bankruptcy (Kira smart fields: Default or Termination for Bankruptcy or Insolvency – Lease)
  • Whether the tenant’s lender has a right to a new lease if the tenant rejects the lease in bankruptcy: (Kira smart field: New Lease (Lender Right)
  • Whether the lease contains liquidated damages (Kira smart field: Termination Damages – Lease)
  • What express remedies the landlord has upon a tenant default (Kira smart field: Landlord Remedies Upon Events of Default – Lease)

For banking trends, borrowers are seeking waivers or amendments to their financial related covenants in credit agreements. As compensation for these amendments and waivers, lenders want additional protections as their concern about non-performing loans grows. There are estimates of high levels of defaults on current loans, so lenders are reserving billions of dollars to address that particular issue.

As for high yield bond indentures, issuers are interested in acquiring additional liquidity. After drawing down revolving lines of credit, issuers may seek bond issues for additional financing. Issuers with existing bond covenants need to track compliance because of the difficulty of amending indentures. Issuers also need to be cautious of unexpected additional debt issues such as governmental aid in the form of loans, or perhaps, a payment deferral for goods and services.

For ISDA agreements, parties are interested in the defaults and termination provisions, particularly negotiated additional termination events and material adverse effect provisions.

Other considerations in banking and finance include cross-defaults and LIBOR. As negotiations occur to retain cash by deferring payments or other amendments, parties need to understand the impact of such amendments for potential cross default issues among their financial contracts. With COVID-19, there has been some speculation that the LIBOR cessation timeline will be delayed. As of now, the timeline remains the same and this LIBOR work continues.

For credit agreements—Kira has approximately 200 out of the box smart fields to assist in any type of credit analysis:

  • Financial Covenants
  • Default provisions, including Cross-Default and Insolvency

For bond indentures—built-in smart fields capture:

  • Limitation on Additional Debt Covenant
  • Asset Sales/Disposition Covenant
  • Other general provisions such as Equity Clawback Redemption, Optional Redemption and Supplemental Indentures/Amendments

For ISDA agreements—built-in smart fields assist in determining the scope, default and termination triggers and close out of derivative contracts.

For LIBOR—Kira has dedicated smart field groups to help with the discovery and filtering of LIBOR referenced contracts.


When corporate debtors file for bankruptcy, they often do so with the aim of reorganizing in order to emerge on the other side as a viable business. Successfully navigating the bankruptcy process, however, can be challenging. It is important therefore for debtors to have the opportunity to conduct a thorough review of their affairs so as to make informed decisions about the best way forward. With that in mind, we recently introduced three new smart field groups that can help debtors and their professional advisors do just that:

  • Bankruptcy/Recession Planning – General Commercial
  • Bankruptcy/Recession Planning – Real Estate Leases
  • Bankruptcy/Recession Planning – Equipment Leases

Specifically, the smart fields in these groups are designed to assist debtors and their advisors in reviewing executory contracts and unexpired leases for the purposes of deciding whether to reject or assume these agreements, if the debtor is authorized to do so in the applicable jurisdiction. In this context, an executory contract refers to one under which both parties still have material unperformed obligations at the time of the bankruptcy filing. The advantage of this reject or assume framework is that it allows debtors to obtain relief from burdensome contracts and leases while at the same time letting them keep those that add value to their business. Factors that inform this decision include the remaining term of the contract or lease, any ongoing payment obligations, the existence of any continuing defaults, and the cost of curing those defaults. Our smart fields can help debtors find this information in less time than it would take to review all of these agreements manually.

The intent of the above is to provide customers and partners with substantive action items to employ in the next coming weeks or months. We understand that some may have a long term view right now, and to add a rebound from this downturn, but we do believe that Kira is a valuable and essential tool in helping you weather that storm, and do the type of work that has been arising lately.

Shifting Away From a Reactive Mindset

Law firms are experiencing common problems amidst the pandemic as they work through the issues, one step at a time. Our goal was to share with our customers some practical methods that have allowed organizations in similar positions to thrive. During the fireside chat portion of the roundtable, Richard Robbins of Sidley Austin LLP acknowledged that some in Big Law may struggle to recognize when Kira can be leveraged to support evolving use cases. However, he believes that a major driver of success is actually empowering Kira to do even more than initially imagined. To address that, Sidley’s Knowledge Management department formed an internal team responsible for partnering with SMEs across the firm to identify trends and encourage the implementation of Kira where it saw a possible fit. The key takeaway here was the importance of having the right people in place to support innovation and aggressively pursue its adoption because it is hugely significant to the success of your business, not just your individual practice.

“I think that the possibilities to use this class of technology across our firms is really only limited by our imagination." - Richard Robbins, Director of Knowledge Management at Sidley Austin LLP.

For more information on any of the above content or for a more general discussion on market trends, please contact Daniel Himmel who leads our practice consultancy function in North America. You can also visit our COVID-19 resource center as we continue to leverage our expertise to support our customers and community.

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