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  • Writer's pictureRhianne Armstrong

Automating Legal Opinion templates


There are certain types of documents that are staples for every law firm to automate. Think of Share Purchase Agreements and Corporate Actions in Corporate, Leases and Licenses in Real Estate and, alongside Loan Agreements, Banking practices often look to their Legal Opinion precedents as another core staple for law firms to automate.


In this article, we'll explore the reasons for automating Legal Opinions and share best practices for legal professionals to optimise automated precedents.


Why automate Legal Opinions?

Legal Opinions are complex legal documents. Incorrect wording or missing an assumption or qualification can significantly impact risk and liability. Ensuring consistent Legal Opinions within a law firm can help manage this risk effectively.


Complexity of Legal Opinions

Legal Opinions involve various drafting options and this adds complexity to the document:


  • Obligors: There could be one or more obligors, incorporated locally or overseas, or a mix.

  • Documents: There could be one or more documents, which might be governed by local or overseas laws, or a mix.

  • Requirements: Specific requirements may need to be addressed based on the lender or the transaction.


Some opinions are specific to local obligors and cannot be given for overseas obligors. For example, capacity opinions apply only to local entities. Similarly, certain opinions like enforceability or validity apply only to documents governed by local law and not to those governed by overseas laws. Ensuring accurate definitions for all terms is key.


Benefits of automating Legal Opinions

There are a number of reasons Law Firm's find automating these agreements beneficial:


1. Speed up first drafts

Drafting a Legal Opinion can be time-consuming. Automating the initial draft speeds up the process. Although an automated opinion needs review, automating defined terms such as “Opinion Documents" or "Overseas Law Opinion Documents" (and the pluralisation of these terms) saves time and reduces errors.


2. Reduce Risk

Automation helps reduce the risk of drafting errors, particularly regarding assumptions and qualifications. The automated system can adjust these elements based on responses to the questionnaire. This ensures the opinion aligns with the assumptions and qualifications, while still managing the law firm's risk. This process eliminates the need to check multiple guidance notes or worry about missing an important assumption or qualification.


3. Improve Precedents

Automation allows tailored text or guidance based on factors like the addressee, transaction type, or opinion type. This helps banking teams condense their opinion precedents and guidance notes. Updates to templates become easier with fewer documents to manage.


Consolidating templates is usually recommended for automating similar precedents. However, for Legal Opinions, it's not always straightforward. Keeping capacity-only, enforceability-only, and combined opinion templates separate can be beneficial. Stripping out specific opinions from a combined template opinion and ensuring they suit each type of opinion requires careful consideration, especially for future maintenance.

Automating legal Opinions: Where should I start?

Establishing a user-friendly questionnaire is important. Structure the questionnaire in a logical order, reflecting how a user thinks about the legal questions in a transaction rather than following the document's flow. Suggested sections include:


  • Obligor details

  • Opinion Document details

  • Optional opinions

  • Opinion details and guidance (footnotes, year of the opinion/documents, project reference)


Expertise in automation


At echo.legal, our experience with various law firms' opinion formats across different jurisdictions enables us to shape questionnaires that maintain the firm's style and structure. We identify challenging parts of legal automation and provide options to achieve efficient and accurate results. This approach reduces testing and feedback time, ensuring users trust the templates.


In summary

Automating Legal Opinion templates enhances efficiency and reduces risks when it comes to legal advice. By focusing on best practices and leveraging the expertise and experienced document automation specialists like those within our team at echo.legal, your firm can achieve accurate and consistent legal opinions, streamlining your legal processes and reducing your legal risks.


Transitioning from traditional ways of working to document automation is a significant change for lawyers and legal professionals. Our team at echo.legal are document automation specialists who have a track record in helping law firms and legal teams move forwards when it comes to all things legal automation. If this is something you need support on, please contact: will.sumners@echo.legal


FAQs:

What is a Legal Opinion?

A Legal Opinion is a document giving statements about facts lawyers have investigated about a transaction. They give reassurance to parties to take part in a transaction. There are pre-defined opinions that need to be given and would expect to be seen by the client.


Why are Legal Opinions important?

The client relies on their lawyers to investigate documents and parties involved in a transaction to reduce the risk of their involvement in the transaction. In any transaction you can have a number of opinions from different law firms depending on where the parties or assets are registered.


What is an Obligor?

An obligor is an entity involved in the transaction, whether as a borrower, guarantor or third party offering security for the transaction.


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