‘Repapering’ without help from the right technology is a deeply unglamorous task for a lawyer, but this belies the importance of the work, which is often business-critical for a corporation. The process typically involves risk-assessing, remediating or migrating contracts, typically to stop the disruption of goods or services, avoid unwanted contractual consequences, or to help businesses with relocation or contingency plans. With Brexit looming over us, the slow death of LIBOR, and the increased importance of personal data rights post-GDPR, repapering is fundamental for business survival.
But how easy is repapering?
Take Brexit as an example. Last month the CEO of the Financial Conduct Authority (FCA), Andrew Bailey, raised serious concerns about the lack of action taken by retailers in preparation for Brexit. If a no-deal Brexit does go ahead, after a certain period, UK businesses, without the correct paperwork, will no longer have the right to trade products and services within the EU27. On the flip side, Bailey also warned that a significant proportion of European-based businesses have failed to apply for permission to continue operating in the UK post-Brexit. Whilst some UK organisations have already relocated market-related activities for EU clients from London to other business hubs around Europe, this can only be done with the permission of the client, meaning each contract has to be revised and signed. Simply put, this is a massive repapering exercise.
The FCA has also urged for the speed up of repapering for contracts linked to LIBOR. Financial institutions must identify contracts that need to change from LIBOR to alternative reference rates within documents by 2021. However, the subtly and complexity of legal language can make this a challenge.
This is an issue already facing organisations in light of the GDPR (General Data Protection Regulations) which came into force last year, putting in place mandatory provisions concerning the personal data and privacy of persons. As a result, institutions are expected to review and amend documentation to meet the GDPR standard, a process which has proved time and resource-intensive.
These are just three examples of major events in an ever-changing regulatory environment and the need to conduct such exercises should be treated as business-as-usual for legal teams. However, most legal teams have not adopted any kind of technology to solve the problem, and certainly don’t have sufficient resources to complete the work manually.
The challenge of repapering
Legal advisors must prepare businesses and financial institutions in the best way possible. But, as it stands, the traditional method of manually reviewing documents and repapering where it is seen fit, is an impossible feat. As well as the huge cost of such an exercise, completing the review within the transition period may not be feasible for lawyers and legal teams entrusted with this mammoth task. Some teams resort to sampling, which has obvious drawbacks when the point of the exercise is to eliminate business risk. Using Luminance’s revolutionary platform, it doesn’t have to be that way.
Legal AI is the only solution
With the assistance of Luminance, lawyers are able to carry out repapering exercises efficiently and cost-effectively. Due to the minimal set-up and configuration required, Luminance’s Legal Inference Transformation Engine (LITE) immediately enhances a lawyer’s understanding of the document set. Users are able to see all standards, deviations and anomalies throughout an organisation in an intuitive and visual display, and then categorise risk in accordance with contractual risk or regulatory change. By streamlining the review in this way, LITE provides time-savings of at least 50% on day one of the review. The platform can then learn from its interactions with the lawyer to further refine the repapering process as new challenges arise or when a client requires urgent assistance, accelerating the review process even further.
The abilities of LITE were put to the test in 2017 when a global retail bank leveraged the Luminance platform to conduct a GDPR compliance review. The legal team greatly benefitted from LITE’s unmatched pattern recognition abilities, which automatically exposed documents that deviated from GDPR-compliant wording, and then learnt from the team’s interaction with the documents to proactively suggest clauses with similar wording across the entire project. As a result, the team completed the review in just two weeks, compared to the nine weeks they predicted for manual review.
More often than not, regulatory change is a cross-border and cross-jurisdictional matter. The ability of LITE to read and understand any language and its jurisdiction overcomes this practical challenge, allowing lawyers to truly comprehend the documentation and uncover subtleties in legal language which may otherwise have been missed.
In an ever-changing legal and regulatory environment, repapering is here to stay. Luminance’s cutting-edge technology is the only software which can rise to the challenge.
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