Leading alternative legal services provider Axiom has launched a purpose-built service, incorporating artificial intelligence (AI), to help companies update over 7.5m financial services contracts in the run-up to Brexit.
Chris DeConti, executive vice-president of global solutions at Axiom – which employs 2,000 people around the world, including in London and Belfast – said traditional approaches were “untenable”, given the scale of the challenge faced by firms.
He told Legal Futures: “It is not clear how much certainty the transition agreement gives us. Financial services firms need legally binding certainty to conduct their business.
“Without exaggeration, this is the largest contract rewriting and updating exercise we have ever seen.”
Mr DeConti said AI could be used in two main ways. It could be used to organise tens of thousands of documents, which were not often not stored together or created at the same time.
“A single document for a bank is usually a series of inter-related documents including amendments, schedules, and appendices. AI can search, read and understand how those documents are created, cutting out thousands of manual hours.
“AI can also understand what is in contracts, which clauses need to be updated and what sort of update is required.”
Mr DeConti said that although traditional law firms were increasingly using AI, they tended to overlay it onto “legacy ways of handling legal work”, which could produce an “uncomfortable combination”. In contrast, he said, Axiom’s solutions were built with technology in mind.
He went on: “Brexit requirements cut across such a wide range of contracts and cover so many lines of business that legacy models for handling this work are untenable.
“The scale of the Brexit challenge cries out for a different kind of solution, which is exactly what we aimed for in designing BrexitBridge.”
Mr DeConti said Axiom – which is not a regulated law firm – was “uniquely placed” to deal with the challenge of Brexit because it handled over one million contracts a year, including more master trading and derivatives contracts than any law firm or legal services provider in the world.
Axiom has estimated that financial services companies operating across the UK and EU will need to review and update more than 7.5m contracts as a result of Brexit – including trading documents, supplier agreements, loans and non-trading contracts.
More than 100 types of contracts would be involved, and companies would need to consider dozens of European regulations and local laws when making their changes.
Mr DeConti added: “The magic circle firms are focussed on legal advisory work and Brexit requires enormous amounts of that. They have plenty to do.
“Because we handle more contracts each year than any law firm, we have the volume of contracts needed to train AI systems and machine learning. It’s very hard for law firms to replicate that.”