As we begin to see an uptick in deal volume and activity, buyer companies and investors have returned to the market to complete cross-border transactions despite ongoing social distancing measures.
That being said, many normal processes in dealmaking are now impossible; for example, the logistics of signing in wet ink are impractical and against social distancing guidelines, with signatories potentially dispersed around the country, and site visits to target company locations difficult.
With a number of deals due to complete on or around the time restrictions were introduced, we turned to technology to ensure that our clients could continue to make progress.
Electronic signatures
The technology to allow electronic signing has been around for some time, but the pandemic has accelerated our adoption of it, with clients seeing the benefits of being able to progress their plans and their businesses despite social distancing measures.
Signing electronically can eliminate many of the issues presented by completing a deal in a pandemic, as it allows for all parties to sign a document within seconds of being invited to do so. There are, however, differences in the law between Scotland and England and certain documents needs to be signed with a specific type of electronic signature for them to be valid. We have summarised in this blogpost some of the key issues to consider when signing a document electronically and deciding what type of electronic signature to use.
While some may lament the days of the completion glass of champagne, signing electronically can lead to a smoother and more convenient completion, as the platforms used ensure that there is a lesser chance of a misplaced/missing signature and eliminate the time needed for printing and scanning. Signing also can be done via a smartphone or tablet which allows much more flexibility for the signatories.
Virtual due diligence and AI
Video calls and virtual data rooms have been a routine part of any M&A transaction for many years but have become increasingly relied upon in the light of COVID-19. Negotiations between parties, meetings with target's management, collating documents to populate data rooms and site visits were often done in person. Clients have turned to using technology such as Microsoft Teams, Zoom or Skype to conduct these meetings or give virtual site visits.
Electronic access to diligence material also enables our lawyers to use AI tools to speed up the diligence process, review a greater number of documents and reduce costs.
What does the future look like?
Using technology to complete deals during the pandemic has proved to be relatively straightforward, and it is clear that these will be necessary methods for some time. But, such are the benefits that can be gained from using technology at various points in the deals process, we hope that they continue to be the methods of choice even in a post-COVID world due to the convenience and efficiency they provide.
Brodies IP, technology & data partner, Martin Sloan, chairs the Law Society of Scotland's working group on electronic signatures which has produced a downloadable guide on the use of electronic signatures under Scots law. Commenting on the use of electronic signatures, he said: "We've seen a huge increase in the use of electronic signatures and other legaltech as a consequence of the disruption caused by the COVID-19 pandemic. In most cases, there are no material risks or barriers to using electronic signatures. Combined with the ease and speed of signing and other benefits, we expect that electronic signing will become the new normal."
Planning, flexibility and embracing technology are all the more important and key to a successful deal during this time.
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