The legal industry is not immune to the influx of new technologies designed to make our lives, and equally if not more importantly, those of our clients, easier and more efficient. Early last year, we reported on content management tools that revolutionized the way due diligence is performed in M&A transactions. Since then, new technologies have emerged aimed at simplifying document management in closing a deal. While still relatively new, one of the more promising technologies is virtual closing rooms.
Virtual closing rooms
Virtual closing rooms are designed to facilitate a secure, user-friendly and simple closing process. Some of the unique features offered by these new technologies include:
- secure cloud-based login, which allows administrators to choose the functions available to each user or group of users or law firm;
- electronic signature pages allowing for speedy document execution – clients are able to upload their signatures and have them verified by phone or email allowing for the electronic signing of documents, eliminating the hassle and cost associated with arranging in-person signatures;
- a collaborative dashboard that can be shared with all parties involved in the transaction – regardless of what side you are on, you can quickly check the progress of any deal, including what signatures are still required and what documents have yet to be finalized;
- a user-friendly colour scheme designed for the quick and efficient spotting of issues;
- the ability to pull up any draft of any document, complete with automatically generated redline changes and mark documents as final when no more changes are necessary; and
- automatically generated closing records allowing for easy recordkeeping of the transaction.
Essentially, these virtual closing rooms completely replace the physical closing rooms that often contained hundreds of folders and countless drafts of numerous agreements. This allows for all documents and signatures to be organized, accessible and easily tracked. Having a centralized system for all of your corporate documents will save countless hours of printing, tabbing, and delivering of documents.
It should be noted that, in our experience, in-person closings, and thus, physical closing rooms, are in steep decline. Whether through the use of virtual closing rooms or electronic closings (whereby documents are finalized and shared typically among the parties’ counsel), technology is hugely impacting the way in which M&A transactions are conducted and ultimately closed.
From the client’s perspective, virtual closing rooms and similar efficiency-saving technological developments in the legal industry go a long way to streamlining the provision of legal services, allowing for cost savings. This is music to clients’ ears.
The author would like to thank Travis Bertrand, Summer Student, for his assistance in preparing this legal update.
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