More than all other members of a deal’s working group, securities lawyers are neck deep in our Virtual Data Rooms (VDR) at every stage of the transaction – from the start of the process till the final ink.
Interestingly, regardless of their need, from conversations with our clients and with our VDR partner, EthosData, we’ve uncovered a Love / Hate relationship. This relationship is not just with VDRs. The legal industry is working its way toward other digital solutions that were traditionally “analog:” e-discovery for example.
Glass half full: He loves you yeah, yeah, yeah…
More work executed per day: Securities lawyers can work on more transactions in a shorter period of time because they can access the confidential documents required for due diligence within minutes. More get done per day because less time is wasted in traveling to the location where the documents are present – another firm, the clients corporate office, etc. The time saved on Transaction A can then be used to work on Transaction B, increasing productivity and improving the number of billable hours per day for the firm.
Deal accountability is trackable in seconds: They can easily track the documents they have already read and the ones that are still pending by using the Virtual Data Room’s feature to highlight the pages that they still need to be addressed. When lawyers are going through hundreds of documents which contain thousands of pages, it can become a nightmare to keep a track of what has already been read and what hasn’t. The use of technology nullifies this stress completely.
Questions and answers in minutes, not in a meeting: All members of the working group, not just the securities lawyers, can easily ask questions and get responses while keeping track of all the details in an easily exportable excel sheet. No more have to request a meeting and be strapped for the time to clarify their doubts. When a query arises, anyone can simply click on the question mark icon next to the document and type in a question. The appropriate recipient receives an email alert of the query, logs on to the Virtual Data Room and responds. It’s really that simple.
Glass half empty: He’s just not that into you…
The comfort of tangible paper: Securities lawyers have endured years of studies through law school and read thousands and thousands of documents in paper format. Transitioning from this habit to reading on a screen is something that the senior lawyers dislike (which is why they push the corporate clients for printing rights for the data they’ve been given access to on the Virtual Data Room). Paper is still the Pavlovian default.
Locked PDFs are a pain in the @#$: Lawyers need to circle, underline and mark side notes in the margins of the documents that they are reading. Restricted access on computers that only allow confidential documents to be read-only does not permit highlighting, underlining or taking notes on a page. This forces them to take the painful extra steps of writing the name of the PDF document, the exact page they are reading and the line they want to comment about onto a separate piece of paper – not the actual document under review.
Face-to-face interaction is minimal: Some lawyers need the to-and-fro that was required to go through legalities. The constant face-to-face interactions also lead to the building (and bullying) of relationships. Virtual Data Rooms has cut this down to a minimal in the interest of higher productivity and higher time-saving. Certainly many deals should be hashed out over a physical table, but not all need this in-person banter. Many transactions are just that – a transaction.
A virtual data room is not a luxury, it’s a deal necessity. The challenge for corporations and their securities lawyers is to identify the data room that best suits their workflow and budget. That’s OUR specialty – delivering the intelligent value.
Have a great day.