The LMA.Automate system will also ‘cater for the entire document lifecycle, including negotiation and collaboration, documentation execution and comprehensive data extraction and reporting’ the group said. I.e. it’s heading more toward the CLM side of things.
The project is similar to what fellow Magic Circle firm Linklaters has done with Nakhoda and ISDA, through its work on automating documents for derivatives and then extracting key data at the point of creation.
It’s also another example of focusing on standardisation to help drive efficiency in legal work.
LMA.Automate will operate as a wholly owned subsidiary of the Loan Market Association or LMA. The LMA is an industry body that seeks to help participants in the financial sector to work in a more harmonised way.
Avvoka is a UK-based doc automation company, which has been in Allen & Overy’s FUSE tech programme. Its platform also offers negotiation capabilities and analytics.
The service is available to existing LMA Members, initially for a limited, agreed free trial period, and thereafter on an annual subscription based on the number of users. The initial suite of documents includes:
- Full automation of all LMA confidentiality agreements,
- Full automation of the real estate finance suite (excluding inter-creditor agreements, but including any applicable riders),
- Full automation of the investment grade suite (specifically to incorporate not only facility agreements, but also mandate letters and term sheets),
- Incorporation of commonly used drafting options’ within the investment grade suite to include any relevant riders such as defaulting lender language and domestic benchmark slot-in schedules,
- Full automation of the developing markets suite of facility agreements.
The LMA said it will also automate additional existing templates, as well as those produced as a result of LIBOR discontinuance at the end of 2021.
Clare Dawson, Chief Executive of the LMA, said in a statement: ‘We believe this service will benefit a large number of institutions across the market, irrespective of whether they are banks or law firms, as well as providing the opportunity for collaboration between them.’
‘This is an exciting new initiative for us, and one which we believe to be particularly important at the present time, given the ongoing transition of the market from LIBOR to RFRs.
‘We hope that the platform will greatly assist with this transition in particular, enabling firms to update internal precedents via a simple, user friendly and flexible self-automation tool and facilitating the production of a greater number of templates than are currently available in manual form via the LMA website.
‘Being an end-to-end solution, capable of converting documents into structured data, we also see enormous relevance to firms in the context of reporting and data analytics.’
Is this a big deal? Yes. This kind of standardisation and automation project is clearly the direction of travel now for an increasing amount of legal work. Also, the alliance of an industry standards body, a tech company, and a major law firm, is another sign of a more joined up approach to solving problems.