Creating a legal document for a corporate finance or capital markets deal is a complex and time-consuming process. They typically contain 100’s of pages of text, tables, graphs and charts covering everything from risk factors, to the operating and financial review.
The vast majority of this legal documentation is drafted in MS-Word and then distributed to lawyers, accountants and bankers via email for review and comment. The comments are then sent back, consolidated into an updated version and re-circulated with the process being repeated until the final version is agreed.
Whilst some sections of a prospectus hardly ever change from first draft to final version, other parts move ahead more frequently to reflect the deal structure, financials or regulatory provisions. However, since different parties are working on different systems, the lack of visibility means that tracking progress and extracting useful insights into how the deal documentation is developing is almost impossible.
Learning from other industries
Other industries have developed more effective techniques for handling similar draft, review and approval cycles. Teams of software engineers use centralised version control and source code repositories to develop sophisticated computer programs. Large manufacturing businesses have technical authors using specialist editing software and content databases to write product documentation. These systems support collaborative drafting whilst eliminating distribution overheads and minimising risks such as working on out of date versions. They also facilitate modular documentation, allowing content to be re-used for different purposes which in turn reduces reworking and duplication of effort.
Capital market documents – the Scribestar way
Scribestar uses the same techniques to allow everyone in a deal team to collaborate more effectively and draft documents in real time. All parties benefit from seeing what others have done. By knowing who has requested a change and why, reviewers no longer work in isolation – they can leverage the work of one another. This reduces the effort associated with all types of changes from getting a typographical error fixed to more substantive drafting. A notifications mechanism makes users aware of which parts of the document are being worked on allowing senior members of the team to approve changes, check quality and provide immediate feedback.
Improved audit and risk management
Since all versions of a document are being stored in one place Scribestar facilitates better audit and risk management. It can provide reporting and usage analysis at levels of detail that are just not possible with existing word processing and document management systems.
Scribestar keeps track of every change to a document and who was responsible for the change – it also records whether suggested changes were accepted or not. All user activity and work type is logged – allowing partners and senior managers to effectively manage deal teams and benchmark different transaction types. And document heat maps provide useful overviews for monitoring progress.
By using Scribestar, companies, law firms and investment banks now have unprecedented access to what’s happening to the deal documentation. Scribestar documents may not be any less complex, but managing them within the platform certainly makes your transactions a lot smarter.
