23 November 2020- With the death of LIBOR (the London Bank Interbank Offered Rate) looming, Luminance, the leading artificial intelligence platform for the legal profession, has announced that world-leading professional services firm, Ernst & Young (EY) Law Belgium, are using its machine learning solution to assist with LIBOR compliance reviews.
The Financial Conduct Authority’s decision to transition from LIBOR to alternative overnight risk-free rates (RFRs) by 1 January 2022 has left many financial institutions with the complex task of reviewing enormous volumes of contracts to identify the extent of their exposure to LIBOR. Indeed, LIBOR underpins contracts affecting banks, asset managers, insurers and corporates estimated at $350 trillion globally on a gross notional basis. To help firms avoid reputational, legal and commercial risk, ‘Big Four’ professional services firm, EY Law, are using Luminance’s AI to quickly identify LIBOR-related documents maturing after 2021 and repaper them accordingly.
By using a unique blend of supervised and unsupervised machine learning to read and form an understanding of legal data, Luminance is able to instantly surface key datapoints, clauses and anomalies. As a result, using Luminance, EY Law are able to quickly identify LIBOR-related provisions, such as LIBOR definition, Interest Rate definition, Change in Law and LIBOR fallback, in just a few clicks. Luminance can then be used to automatically generate a custom report summarising both lawyers’ analysis and their recommendations for amendments. Further, Luminance unique synchronisation with Microsoft Word ensures that reviewers can then apply this insight in order to amend and remediate contracts, all from within the Luminance platform. Most recently, a Global Top 100 law firm used Luminance for a LIBOR compliance review and achieved an impressive 70% time saving.
The success of the Luminance platform in this field has resulted in Luminance launching a specific module to assist lawyers undertaking a LIBOR compliance review. Within Luminance, lawyers can will be able to select the LIBOR module, and in one click can analyse their documents for LIBOR exposure. This will help lawyers to perform compliance reviews with more speed and insight than ever before.
Stéphanie De Smet, a Corporate Lawyer at EY Law Belgium, says, “With many of our clients concerned about the impact and cost of a LIBOR review, Luminance’s powerful machine learning is fundamental to our legal practice. Using Luminance, we can rapidly identify non-compliant areas, drastically reducing the time and resources spent on finding and remediating LIBOR-related documents.”
Clementine Fox, Luminance’s Head of Account Management, comments, “With over $200 trillion of LIBOR-based contracts outstanding, it is fundamental that firms are adopting the most cutting-edge technology to help them mitigate potential risks associated with the LIBOR cessation.” She continues, “As the most powerful technology on the market for this type of review, Luminance’s new LIBOR module will allow lawyers to conduct a seamless and efficient review.”
Luminance is currently used in over 250 law firms and organisations worldwide. This includes all of the ‘Big Four’ accounting firms and over one-fifth of the ‘Global Top 100’ law firms such as Holland & Knight, Bird & Bird and Slaughter & May.
Luminance is the leading artificial intelligence platform for the legal profession. Founded by mathematicians from the University of Cambridge, Luminance has developed the Legal Inference Transformation Engine (LITE), the first true application of machine learning to the legal industry, combining pattern-recognition technology with supervised and unsupervised machine learning to read and understand human language. Luminance is used by law firms and in-house teams in over 50 countries around the world to improve processes such as due diligence, contract negotiation, regulatory compliance reviews, property portfolio analysis and eDiscovery. The company has offices in London, Cambridge, New York and Singapore.
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