The Loan Market Association (LMA) – the influential standards setting organisation – has after a competitive tender process picked Allen & Overy and legal tech company Avvoka to develop a doc automation platform for them.
While perhaps not a household name, the LMA is an important player in the financial services sector and is especially influential when it comes to the standards used for creating syndicated loan documentation.
Syndicated loans are basically very large loans that multiple lenders, such as the big banks, participate in – hence the need for common standards in legal language and contract formation. And also hence why this is a big deal for A&O, and Avvoka, which has been a long-term member of the FUSE innovation space/incubator at the global firm.
And, at the moment, with so many businesses facing a financial squeeze, putting together large and complex loans is likely to be a growth area.
For Avvoka, which describes itself as a ‘next generation’ contract automation system, it’s clearly a big win, as if you are aimed at the upper reaches of the legal market and a leading financial standards group picks you, that sends out a very useful message, i.e. we trust this tech to automate the most vital documents.
Endorsements matter for all types of tech, but especially doc automation, because there are so many platforms out there, which leaves potential buyers a bit lost sometimes as to which ones to use.
Also, it’s worth mentioning that Avvoka doesn’t just provide doc automation, it also offers deal flow tools and doc search capabilities, all designed to create an entire suite of capabilities for lawyers handling complex financial transactions. They also work with inhouse teams, not just law firms.
E.g. you can layer on approval thresholds for liability caps and contract values to ensure that document authors operate within play-booked boundaries. And you can also search, filter and organise documents by metadata, labels and other key contract milestones to keep your repository as structured as possible. So, more than just vanilla doc automation.
All well and good, but what did the LMA say about all of this?
The official statement said: ‘The LMA has entered into a memorandum of understanding alongside Allen & Overy and Avvoka, outlining its intention to develop a documentation automation platform in respect of certain LMA recommended form documents, as well as other ancillary services.’
And as noted, this matters because A&O and Avvoka then get placed at the centre of the standards setting environment and the doc creation process for a sector that involves dozens of major banks.
While Clare Dawson, Chief Executive of the LMA, added: ‘As technology becomes an increasingly prominent feature in our working lives, we believe that it is incumbent upon us as a leading industry body to continue to find new ways to make delivering the loan product more efficient.
‘This is an exciting new venture for our organisation, which we believe will benefit a large proportion of our membership, irrespective of institution type, size, sectoral focus or geographical location. We look forward to working with Allen & Overy and Avvoka.’
Dawson also added a point about working from home and the use of technology during the lockdown: ‘Never has this [tech] been more important than in the current uncertain environment, where remote working and use of electronic tools is likely to become vital to the successful conclusion of loan market transactions.’
Artificial Lawyer asked Avvoka if they’d also like to comment, but for now they’re letting the LMA do all the public announcements.