Leading global law firm Baker McKenzie has developed and launched Reinvent LIBOR – an innovative solution designed to manage the transition away from the London Interbank Offered Rate (LIBOR) for a distinct set of clients operating in the securitization market. Available to all clients, but of particular interest to service providers within the structured finance market (such as corporate service providers and corporate trustees), Reinvent LIBOR combines legal expertise, process experts and the latest technology to help manage the time and cost intensive transition process associated with certain transaction types.
The LIBOR benchmark will start being phased out at the end of 2021 after banks in Britain and elsewhere were fined billions of dollars for trying to manipulate what was once dubbed the world’s most important number. The transition away from LIBOR is seen by many as significantly challenging, particularly in the context of so-called “tough legacy” transactions, which currently reference LIBOR and have no realistic ability to be renegotiated, converted or amended before the end of 2021.
Reinvent LIBOR was developed by Sarah Porter, a partner in the Firm’s Structured Finance Group in London, and aims to make this transition as efficient as possible. This was developed as part of Baker McKenzie’s Reinvent Fellows program, an innovation initiative whereby lawyers are given time away from their fee-earning work to focus on tangible service delivery improvements by either changing how the Firm works or addressing a material client problem.
Identifying and remedying a transition of this type requires large-scale due diligence and repapering across multiple finance documents. A tailored Baker McKenzie Online site is used to connect Firm lawyers, clients and legal project managers to enable better collaboration throughout the transition project. Reinvent LIBOR draws on Machine Learning Contract Analytics platform eBrevia, which is used to assist with the due diligence phase, and then inter-faces with Contract Express, the Firm’s document automation platform, to automate the creation of relevant documentation. The Firm’s legal project management team coordinate the entire process to ensure efficient implementation of this technology as well as a standardized approach to each project.
Baker McKenzie’s structured finance lawyers are then able to focus on addressing the complex and challenging issues that arise from LIBOR transition and deliver a dedicated and high quality solution.
“In short, each stage of the process is carried out by those with the best skillset to do so”, explains Sarah Porter. “The project draws on the talents of a number of our professionals – the Service Design team, Lawyers, Legal Project Managers and Alternative Legal Services. We are really pushing the boundary of legal service delivery in order to deliver the best possible service to our clients”.
Reinvent is Baker McKenzie’s innovation program. It is the Firm’s ongoing commitment to apply clever solutions to meet client challenges and strategic goals by accelerating change, and delivering speed, accuracy, flexibility and efficiency gains. Reinvent brings together Baker McKenzie’s change initiatives in support of better client outcomes, connecting service design, alternative legal services and legal project management teams, the Global e-Discovery and Data Advisory team, the innovation fellowship, legal tech start up program, and more.