Axiom spin-off Factor today launches a Legal Transaction Optimization service for law firms, providing a tech-enabled transaction management, due diligence, and documentation support to deal teams. Factor says that the new offering is intended to help law firms respond to cost pressures and win more work, empowering them to focus on higher value aspects of each transaction. Law firm reaction has so far been positive, according to Ed Sohn, SVP, head of product & solutions at Factor, although the proof will be in the delivery.
The new service includes:
- Transaction management, including checklist maintenance, signatures, centralized coordination, document routing, and closing set assembly;
- Due diligence, including maintaining the due diligence questionnaire and the review of underlying documents; and
- Documentation, including ancillary agreements, templated contracts (e.g., under a fund umbrella developed by the law firm), side documents, consents, assignments, novations, and others.
Speaking to Legal IT Insider, Sohn said: “We’ve always worked together with law firms and collaborated with them and this is the next evolution of that: us coming together and law firms putting us into their deal team.
“There is work that frequently goes to junior associates and the clients put costs restrictions on – firms even get low realization – we will take that over.”
Other legal suppliers already undertaking this kind of work and role include law company Elevate, which works with firms including Hogan Lovells on document review.
In terms of document drafting Sohn said: “This is the kind of stuff we do anyway but it’s now a capability that law firms can have as part of their deal team. We can do it at a saving of around 50-70% on those activities and if you’re looking at a total deal, that figure is 30-50%.”
He adds: “Law firms are under pressure from clients to cut fees and now they can do that without cutting their rates, which is a bad idea because it puts them on the back foot. Now there is another lever they can pull.”
Factor, which rebranded from Axiom Managed Solutions in January 2020, will be recruiting in order to scale. However, Sohn adds: “We may only have been ‘Factor’ for a year and a half but we have been doing this a decade and already have lots of people with many years’ experience. They can easily take those capabilities and walk into a law firm deal.”
While technology adoption has accelerated during the pandemic adoption is often still low, Sohn says that Factor is better placed to leverage technology such as Kira Systems, which it is known to work with on due diligence. “Not only do we have better adoption, we don’t have a way of doing something that we have been doing for 30 years,” he said.