Complex legal transactions: solving the pain points

Working with hundreds of separate documents, chasing down signatures from multiple parties, collating massive pdfs and hoping everything is in exactly the right place – all while under extreme time pressure.

When it comes to deal execution and finalising complex legal transactions, there’s no shortage of pain points for lawyers, but sometimes the various pain points conspire to create a nightmare scenario. 

Maybe a signatory returns a signature page with their thumb over their freshly inked name, rendering the signature unusable and sending the team scrambling to get a valid one – just when they thought everything for the deal was done and dusted. 

Or there are documents to be notarised, requiring a notary to read out the entire document. If it’s hundreds of pages, that could take up the bulk of your day. Go ahead and cancel your afternoon plans and try not think about the incredibly tight deadline you’re staring down. 

If there’s a common theme here, it’s that the traditional approach to transaction management can put lawyers in some painful scenarios. Some scenarios cannot be avoided but can be managed with better upfront planning and processes. But many of these scenarios are completely avoidable. 

By using new types of transaction management platforms and processes to assist in areas like project management, signature collection, working with e-signatures and producing closing bibles, lawyers can nimbly sidestep many such issues and greatly simplify deal execution.

Microsoft Word: not for project management

First point of order: the way most legal transactions are managed is a nightmare in itself. It usually relies on one person on the team – typically a junior person – emailing around a Microsoft Word document being used as a project tracker. 

Team members look at the document (if they can find it in their emails) and send any updates back to that person in charge of the document, who then updates it (see fig 1). 

Fig 1 A Word project tracker

This is not an optimal way of working. It’s slow and misunderstandings can easily slip in, and because these transactions move quickly, a Word document is going to be out-of-date almost as soon as it’s sent out. 

Constantly sending the document around for updates contributes to email overload. Also, upon opening the document to check status, there’s no way to access the documents being referred to from the Word document tracker. 

So how best to avoid this management nightmare?

Figure 2 An online single source of truth
 
Using an online transaction management solution ensures there’s a single source of truth for everyone to edit, providing real time updates on project status (see Fig 2). Crucially, it acts as both a project tracker and document storage facility. Anything but a static Word document will bring improvements here.

Right from the start, the project is being managed efficiently. 

Wait! Was that the right signature?

A lawyer wants to get a document signed by five people. She emails the document to the recipients and each of them prints the document out, signs it, scans it and sends it back by email. If those people are slightly tech savvy, they might use Adobe Reader – but they’ll still be sending back an individual signature page. What the lawyer needs to produce is one document that contains all the signatures. 

To do that, she needs to get a clean, unsigned version of the document, then replace all the blank signature pages in that document with the actual signature pages received (see Fig 3). That process might be fine for one document, but complex signings can easily involve up to 100 documents. It can be very difficult to manage that process ¬– and easy for errors to creep in. 

Figure 3 Replacing blank signature pages with signed pages
 
Transaction management software can automate the process of combining those signature pages into a single executed document, significantly streamlining the task, and reducing the potential for embarrassing errors (see Fig 4).

Figure 4 Automation of combining signature pages

Make the platforms work for you 

Think of our ‘thumb’ offender who put their thumb over their signature. Other signature mishaps await, like the person who takes a picture of their signature page using their iPhone camera and sends it over, unaware they’ve captured some aspect of their personal life or surroundings.

E-signature platforms make such problems a thing of the past and introduce tremendous efficiencies into deal execution processes. However, most of these platforms are not optimised for legal workflows. For example, people often aim to collate signatures in advance of a document being signed and then merge them into the final document. This workflow is made difficult by the fact that most e-signature platforms embed a digital signature into the document, preventing further amends to the document. 

This is useful and necessary in certain jurisdictions, but where there’s no need for this heightened level of security, it produces challenges. For some, these challenges make them revert to pen and paper.

Figure 5 The more complex closing process
 
A solution that takes into account the need for documents to be amended right up until the last minute goes a long way towards avoiding potential headaches. The fact that document drafts go to the wire is unfortunate but inevitable. Modern transaction management software provides a workflow that recognises the complexities of the closing process while still allowing users to make good use of e-signature platforms. 

One last box to tick

It’s the final aspect of any complex deal: the creation of the closing bible which gathers all of the executed documents for a particular transaction into a single package that can be distributed to all necessary parties (see Fig 5).

Figure 5 The closing bible for distribution

This closing bible can take ages to create manually, even without unexpected curveballs occurring. Imagine a team that has printed out all the closing documents and placed them in a conference room, ready to be scanned into a single pdf the next day. Now imagine a cleaning crew comes in overnight and reorders the documents.

Alternately, a lawyer may wait too long to prepare the closing bible and forget where the final versions of all the documents are stored within the document management system. If the deal closed on a Monday, locations were probably fresh in their mind for a couple days – but not by the following Wednesday. 

A transaction management platform ensures such a situation isn’t likely to occur. It gathers all the documents in the closing list and makes generation of the closing bible a matter of a few clicks – massively reducing the amount of time spent on sending out all the executed documents. 

A modern approach wins 

Transactions can be complex, involve many stakeholders, have high financial and legal stakes and need to be completed under tight timelines. Ongoing negotiations during the closing often add to the chaos of the situation. This process doesn’t need to be made more difficult than necessary – and by taking a modern approach to their legal transaction management, lawyers can make many of the nightmare scenarios that plague deal closings a thing of the past.

Jack Shepherd is legal practice lead at iManage RAVN imanage.com He was formerly an associate solicitor at Freshfields Bruckhaus Deringer