In January 2022, Litera brought together a group of law firm-based UK real estate lawyers for a virtual roundtable discussion on “The Future of Real Estate, Post Pandemic.”
The wide-ranging conversation returned repeatedly to the intersection of two forces on real estate practice today: The Covid-19 pandemic and its impact on work patterns and the underlying real estate market, and the growing importance of technology as an essential aspect of the lawyer’s toolkit in response to those and other client needs.
Covid’s Impact on Client Expectations: An Opportunity
One theme came through loud and clear: client expectations for the support they receive from their legal teams have been on the increase throughout the pandemic. It begins with the basics of being accessible and responding quickly to client inquiries. But expectations are also expanding in some less traditional ways. Many of the roundtable participants reported that clients are more likely to come with questions on what kinds of outcomes can be achieved and what kind of creative solutions can be identified. It’s more than just leaning on legal teams for support in responding to a crisis; clients are providing law firms with an opening to become more strategic, as they help clients think through entirely new business scenarios and challenges.
Many roundtable participants commented on the pace of activity. Rather than slowing down their businesses, the pandemic has turned many real estate clients into entrepreneurial, opportunistic enterprises. Law firms can support firms as their businesses evolved; many noted that the shifts brought on by Covid drove more frequent contact with firms as they worked to ensure recovery of rents and service charges, shift into new businesses and new property types, re-purposing facilities, etc.
All that activity and communication between clients and firms is putting demands on traditional forms of interaction, and technology is playing an ever-growing role to ensure that those opportunities for close partnership with clients are not encountering the friction that older processes and forms of communication entail.
The Collaboration Imperative
One theme of the discussion was around how it’s not enough to simply speed up transactions with faster electronic communications and meeting technologies like Zoom, but rather an entirely new generation of collaboration tools will be required.
The key to collaboration on real estate and other transactions, one participant noted, is that deal teams need to be working on the same system, so that when information about the deal is updated, all the parties are updated instantly. Increasingly, transactions are being pushed onto transaction platforms, often cloud-based.
At Litera, we see this trend in M&A, as deal teams and clients move toward cloud-based transaction platforms like Litera Transact; this roundtable provided evidence that real estate deals, with all their speed and complexity, are following that same shift.
“Getting out of silos” was a big theme in this discussion. And the benefits are starting to appear obvious. If all sides to a transaction are on the same platform, the transparency that the system provides will help with the collaboration; there is less of an incentive to simply blame another party, and more of a sense that all are on the same side, pushing toward the same goals.
In most cases it’s the clients driving this shift to technology-based collaboration platforms, and some respondents see that as the imperative that will push more firms in that direction.
Another barrier that’s not in the control of either firms or clients, however, is the public sector systems – courts and regulatory bodies – that the sector must deal with. Firm-side automation, such as document production, can make some of those transactions with public bodies work more smoothly, but ultimately a shortage of resources holds many public sector offices back from this technological revolution.
The Role of the Lawyer in Tracking and Managing Client Real Estate Data
The discussion turned to other ways that technology could be used in applications specific to real estate. One use for technology that is valuable to clients in the post-completion stages of a deal is to assemble all the relevant documentation into reports – but several of the roundtable participants anticipate that that type of reporting will become less static and more interactive. Rather than simply working from a static report that’s simply a snapshot of a property in time, what if clients and lawyers could maintain and actively engage with a dynamic report over the course of the property’s life, as circumstances change?
That kind of technology can capture data from leases and other data sources to trigger actions – such as break clauses or termination dates – that can keep the relationship between client and firm alive between transactions. As one participant put it, clients are always willing to spend big in the midst of a big deal, but maintaining the relationship with advisory services between deals is a tougher sell. Management platforms like this make the relationship less transactional and more of an ongoing process that keeps both parties engaged.
At Litera, we are taking that kind of “dashboard” approach with a few UK customers of our Kira product, where our contract analysis is “always on” and allows clients to track trends and changes over time, not just at the time of a transaction. In all corners of legal practice, including real estate and M&A, technology is enabling lawyers to build out systems that can establish ongoing processes and communications that keep clients and outside counsel tied to each other between deals.
Posted in The Changing Lawyer