For lawyers, paralegals,
and legal professionals.
When written contracts obscure important information, deal visualization can help. Here’s how you can make your legal transactions easy to understand with visual tools.
It’s no secret that legal transactions can get complicated fast. Whether it’s a merger, a reorganization, or something else entirely, there’s seemingly no end to the various steps, details, lists of involved parties, documents, and complications. And when these deals involve a well-defined series of 50 or 100 steps that need to happen in a specific order, with a different person responsible for each different step, managing your deals in a Word document or email chain simply does not suffice. Even the best lawyers can struggle with written documents that are too dense, too complex, or too large.
That’s where deal visualization comes in. Deal visualization software can render all of this complicated information in a more intuitive format, one that makes it easy for you and your clients to see the next step, determine who is responsible for what, and understand how the various parts of the legal transaction work with each other. Here are some of the ways that deal visualization solves problems in complex deals like mergers & acquisitions, corporate restructuring deals, and other complex multi-step, multi-entity transactions.
Mergers, reorganizations, and other major legal transactions involve managing an incredible amount of information. Beyond the simple logistics of how the transaction will work, your firm also needs to track an endless array of details like which documents need to be signed, who at each organization needs to sign them, the specific order of signing, and more. In the case of a corporate reorganization, you may also need to track all of this information for any number of subsidiaries or divisions. Perhaps more importantly, you’ll need to ensure all of this information is clear to all of the end clients involved. Spreadsheets, word processors, and pen-and-paper checklists can help track your documents, but these methods are vulnerable to document loss, difficult to share with clients, and don’t automatically update all copies to reflect new changes.
If you’re using a typical word processor to track all of this information, and if you’re delivering it in written form using long and complex contracts full of dense legalese, you’re opening the door to miscommunications, possible errors, frustrated clients, or even legal action. Quite simply, there’s only so much mass text the human brain will accommodate before mistakes start to arise.
The law industry is notorious for producing obscure and inaccessible documents; it is this exact issue that has given rise to initiatives like the Stanford Legal Design Lab, a joint venture between Stanford Law School and the Stanford University Institute of Design that aims to make legal information more accessible and easier to understand.
Deal visualization is an emerging field of legal design that communicates information about how a given deal will work in a visual format. This could include flowcharts, graphs, logos, or a structured visual layout that organizes written information in a systematic way.
Incorporating visual design into contracts offers several benefits. Legal designer Stefania Passera, creator of the Legal Design Jam and an Assistant Professor of Business Law at the University of Vaasa in Finland, says contract visualization enhances comprehension and enables the relevant parties to read the contracts faster. Passera, who wrote her Ph.D. dissertation on contract design, said in her 2017 doctoral defense that contract design patterns can make contractual elements like timelines more intuitive.
But individual contracts are only one area where visualization can benefit your law practice. You can also use visualization to better organize your overall deal flow and complex multi-step transactions. Deal visualization can be particularly effective where multiple contracts and other legal documents are working together and building on each other to produce a specific outcome, like a merger. When working with these transactions, you can use flowcharts and other imagery to demonstrate how different elements and steps will interact with each other.
Deal visualization can be particularly helpful when you’re managing a nontraditional merger/acquisition. One August/September 2020 trends survey of 1,000 corporate & private equity executives by Deloitte found that 42% of decision-makers want to explore nontraditional M&A agreements as a means of navigating economic and political uncertainty. According to Mark Purowitz, principal of Mergers and Acquisitions Consulting at Deloitte, the definition of M&A is now expanding to include joint ventures, strategic alliances and partnerships, special purpose acquisition companies (SPACs), and other alternative structures that have not traditionally been thought of as mergers or acquisitions. As interest in these nontraditional M&As grows, visualization tools will become more important as a means of communicating deal structure in a simple manner.
Deal visualization is more than just sketching out a few images. It’s a comprehensive reimagining of the way transactions are communicated. While your deal may start and end with a series of written contracts in a word processor, communicating how the deal will work could involve any number of other tools and tactics.
While hiring a contract designer is one method of improving your contracts, not all law firms will need a full-time in-house designer. Skilled legal designers are also scarce; both Forbes and Slaw have noted in recent years that the law industry is facing a growing digital skills gap. That’s where learning to use AI-enabled visualization software can help. When your cloud-based deal visualization software is paired with intuitive artificial intelligence, you can shorten your own learning curve and map out complex transactions in a fraction of the time.
One simple way to get started with deal visualization is to list out the various steps involved in a typical transaction, come up with a simple shorthand name for each step, and then map the steps onto a flowchart. You may choose to use a software suite like Appara, or sketch it out by hand using the old-fashioned pen-and-paper method.
To use the pen-and-paper method, start with the simplest transaction your firm manages; on the left hand side of the page, list out all of the documents required to make that transaction happen in a series of boxes. On the right hand side of the page, make a list of all the parties who are required to send, review, sign, or copy these documents, and add those parties onto the chart inside a series of ovals. Then, map the required actions (“send to”, “review”, “sign”, etc) in the center of the page in a series of diamonds positioned between the relevant boxes and ovals. Once you’ve mapped all of this out, you’ll have a repeatable template you can use for that transaction.
(Of course, if this all sounds too tedious and time-consuming, you could instead map out your deals in an AI-powered software suite like Appara, where you can collaborate with remote colleagues, import and export documents as needed, and automatically generate documents, signature fields, and more.)
Managing large, complex, unwieldy deals is an intricate process that involves extensive planning. While these deals have traditionally been managed using text-based tools like word processors and email, new and emerging deal visualization tools are making it easier to understand all the moving pieces and ensure every element, every document, every signing party, and every change is accounted for. With the right deal visualization tools, you can help your clients and your own team better understand the intricacies of a merger, acquisition, reorganization, or other complex legal process.
Deal visualization is a great strategy for organizing complex transactions in a way that’s easy to understand. But to make your transactions even simpler and easier to execute, you’ll want to nix the pen-and-paper method & switch to legal records management software that also offers AI-powered deal planning.
Check out one of our free case studies to discover how Appara can streamline your transactions.
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