In this article originally published in LPM magazine, Jack Shepherd, legal practice lead at iManage, says transaction management and e-signature platforms can help to eliminate many of the pain points around deal execution.
Signing, closing, and execution processes in transactions can be a nightmare for legal professionals. The good news is that there are ways of managing this chaos. By addressing some of the top pain points, lawyers can simplify the way they manage legal transactions.
1. Managing the process
The first pain point is around how to manage the transaction itself. Many lawyers use Microsoft Word documents to manage even the most complex transactions.
But Word documents become out of date from the moment they’re sent as an email attachment. They have no way of notifying people of upcoming deadlines, nor do they provide a point of access for the transaction documents. They rely on updates being funneled through one person: a single source of failure. Processes quickly fall apart if Word is used to manage complex transactions involving counterparties spread across locations.
Moving to an online transaction management solution can help. Everybody can benefit from a single source of truth, editable by anyone, that acts as both a project tracker and document storage facility. This is a major upgrade from Word that results in fewer clogged inboxes.
2. Collecting signatures
Until the increase in popularity of e-signatures in 2020, the process around collecting signatures had remained largely untouched since the advent of email.
The process starts with a lawyer extracting ‘signature packets’ (the collection of signature pages a given signatory needs to sign) from near-final documents. Once prepared, the signature packets will be sent to their respective signatories. Once the lawyer has received all signatures, they must merge the signed pages with the final document.
Each of these steps requires a granular understanding of ‘who needs to sign what’. They require a level of skill with PDF editing software that many lawyers struggle to attain. It’s incredibly easy to make mistakes. And when you do make mistakes, they’re often severe and embarrassing ones.
Modern transaction management software can help here by automating most of these steps, lessening the chance for errors.
3. Working with e-signatures
E-signature platforms have added huge efficiencies to the closing process. However, they give rise to their own challenges.
For example, most e-signature platforms apply a digital certificate to the resulting document when it is signed. This means that the document cannot be amended after signature.
But in most complex transactions, it is common for signatures to be collected before the document is signed, and for signatures previously collected to be merged into the final document. That flow is made harder with the presence of a digital certificate.
Again, transaction management software exists to provide a workflow fit for a complex closing process that gets the best out of these e-signature platforms.
4. Producing closing bibles
The final pain point is around getting the executed documents to everybody involved, once the transaction is complete. This is known as producing the closing bible.
This process is manual and easy to over-engineer. It requires lawyers again to harness their PDF editing skills to combine all documents together and send them out.
But people overengineer this process because it’s so manual. I’ve heard horror stories of hard copy documents laid out in a conference room, neatly scanned and sorted – only for cleaning staff to move and rearrange the documents overnight. Other incidents include people leaving too long to prepare the bibles and then forgetting where all the executed documents were stored.
A transaction management platform all but eliminates these kinds of episodes. Because documents can be tracked directly in such a platform, it takes only a few clicks to gather and send all executed documents to anybody who needs them.
Clients expect deals to be executed efficiently, accurately, and in a timely manner. Thanks to new technologies such as transaction management and e-signature platforms, lawyers can eliminate many of the pain points around deal execution they have suffered over the last few decades – much to their relief, and to the benefit of all involved.
Read the original LPM article here.
About the author
Jack Shepherd