In today’s advancing regulatory environment, the financial services industry may be the area that has had to deal with the most significant regulatory change, with more changes in the rules likely still ahead.
Where does that leave financial institutions, as their leaders grabble with how to stay ahead of the quickly altering landscape?
In one example, the many financial institutions that are mutual clients of Thomson Reuters and pre-eminent global law firm Clifford Chance benefitted from the two firms partnering up to solve a particularly sticky problem for banks.
In 2016, new regulations were introduced in the over-the-counter (OTC) derivatives market that now required banks to hold extra collateral or margin to cover the risks associated with uncleared derivatives transactions. To comply with these new rules, financial institutions faced the enormous task of re-working existing derivative contracts with counterparties as well as reframing all new contracts.
In its just-released 2016 Annual Report, The Partnership Equation, Thomson Reuters describes how it joined forces with Clifford Chance to better help global financial clients comply with these new rules more quickly and at less cost. Both companies are “incredibly client focused,” said Bas Boris Visser, Global Head of Innovation & Business Change at Clifford Chance, in a video included in the Annual Report. “What better motive can there be when you discover these clients may actually be best served if you find a way to collaborate rather than go on your own?”
Using an innovative approach to contract negotiation and documentation, the partnership created a flexible, rapidly scalable, technology-enabled solution that empowered clients to meet their current and future regulatory obligations in multiple jurisdictions, according to the Report.
Using a backbone of intelligent technology guided by human expertise, the collaboration between Thomson Reuters and Clifford Chance combined strong legal savvy and financial industry experience with advanced technology and process management.
Thomson Reuters applied its proprietary contract automation software, Contract Express, and abstraction technology built specifically for OTC documentation. This platform enables teams to:
Combining this technology-enabled service model with the derivatives-related legal knowledge and counsel from Clifford Chance gave clients the opportunity to expedite their contract negotiations faster and at lower cost.
Given the success of this collaboration, it’s likely that Thomson Reuters and Clifford Chance may team up again, especially as clients — under pressure themselves to reduce their legal costs and improve the efficiency of tasks such as documentation and negotiation — push their outside legal partners for less costly and more efficient solutions. “Clients getting much smarter about where they source their legal advice and legal support,” said Lucinda Case, Managing Director in Legal for United Kingdom & Ireland at Thomson Reuters, in the video.
Clifford Chance’s Visser agreed, adding that the two companies are “looking at a whole range of projects where we think we can complement each other and help our mutual clients.”