How will COVID-19 impact the legal sector? Luminance Advisory Board

11 May 2020 | Luminance

For legal professionals, as with employees of all industries, current thinking around business strategy and planning is dominated by the impact of COVID-19. Remote working, travel restrictions and the wider economic slowdown have all posed challenges to the way lawyers traditionally operate. Lawyers are being called upon to handle urgent and vital projects relating to the effect of COVID-19 without compromising the quality of the review. Over the coming weeks, members of Luminance’s Advisory Board share their perspectives on the impact of Coronavirus within the legal sector and how firms across the world are responding.

Understanding force majeure

Vagn Thorup, former Chairman of the IBA’s Technology Committee and a member of Luminance’s Advisory Board, believes that identifying force majeure provisions in an organisation’s contracts is the first priority. Companies in every sector “are faced with unprecedented challenges in performing their services, as they encounter issues both with their customers but also in their supply chain. They need to have a clear picture of where force majeure will impact this”.

In Vagn’s opinion “Luminance is the perfect tool to enable lawyers to identify force majeure clauses and their variations in the commercial contracts of clients in every sector”. Luminance’s Legal Inference Transformation Engine (LITE) uses a unique blend of supervised machine learning and unsupervised machine learning, along with pattern recognition algorithms, to read and form an understanding of legal documents at speeds and in volumes far exceeding human capacity. Luminance is primarily deployed in the cloud which allows for rapid install and onboarding – most lawyers can begin their review in a matter of hours. Recently, a team of 3 lawyers from Italian law firm Delli Santi were able to achieve a review of over 200 documents within two hours. This represented a 500% increase in productivity for their client.

Vagn also points out that simply finding these clauses is not enough, “effective lawyers need to quickly and confidently arrive at a clear understanding of the meaning of each clause, depending on its specific details.” Whether the COVID-19 pandemic can be considered a force majeure event is dependent on a number of factors such as the governing law of a contract. Jurisdictions where force majeure is codified in civil code have the option to deem an event to constitute force majeure, as China has done with the issuance of thousands of force majeure certificates. In English law, by contrast, force majeure is only applicable if explicitly included in a contract. Further, whether it can be triggered in the case of COVID-19 is dependent on the clause’s exact wording.

Luminance not only lets lawyers identify force majeure clauses far faster than a manual review, it also helps them answer these key questions about the force majeure provisions with much greater efficiency. Immediately upon opening Luminance, the regional activity and governing law of contracts is displayed across a world map, demonstrating the geographic spread of the contracts and alerting users to jurisdictions which might hold different force majeure implications.

Future proofing

As lawyers begin to adapt to the impact of COVID-19, many are now looking towards the future. In Vagn’s words “lawyers are increasingly thinking about how they can provide a quality service during a period of prolonged international uncertainty and [ensure] that their clients are well prepared for future force majeure events.”

Luminance enables lawyers to provide this quality of service, placing clients in the best possible position as we navigate the effects of the pandemic. For example, when reviewing a document or clause in Luminance, users can choose their ‘model’ – the standard from which all others are compared. After running an extra layer of analysis over documents and clauses, Luminance identifies which clauses or documents comply or are anomalous when compared to the model. This granular understanding and comparison of each force majeure clause is essential since, as Vagn says, “the applicability of force majeure very much depends on the specific wording of each clause”. But this functionality also allows lawyers to provide flexible, bespoke reviews for each client, tailored to each organisation’s specific needs. As well as providing a quality service right now, Luminance enables lawyers to best serve clients as we look to a post-Coronavirus world. Lawyers are able to “future-proof” their clients by designing a consistent, robust model force majeure provision for future contracts, and indeed highlight which contracts need to be renegotiated to be compliant with the new standard.

As providing a quality service in uncertain times and building future preparedness is at the forefront of lawyers’ minds, technology increasingly represents a solution, enabling them to work with far greater efficiency by leveraging the power of true machine learning.