Alston & Bird has created an innovative technology-assisted solution to help financial institutions manage the transition risks on legacy transactions from the phase-out of the London Interbank Offered Rate (LIBOR) scheduled for the end of 2021.
Combining the firm’s large-project legal experience with data mining, artificial intelligence, and other technology-enabled tools, the new offering provides a cost-effective, defendable solution to LIBOR transition issues facing nearly all financial institutions.
“More than $200 trillion in notional transactions reference LIBOR in the cash and derivatives markets, with more than $35 trillion extending past 2021,” said Aimee Cummo, Alston & Bird Finance partner and leader of the firm’s LIBOR Transition Task Force. “For banks and other financial institutions facing the herculean task of reviewing, categorizing, and solving for millions of outstanding LIBOR contracts, our approach to utilizing the technology can reduce the time and cost of dealing with the significant legal and administrative challenges across very large platforms.”
Alston & Bird’s solution addresses the substantial account management challenges facing financial companies in transitioning to a LIBOR replacement across sizable contract populations, enabling clients to identify and quantify their LIBOR exposure – either at the contract level or across all contracts within an institution – more efficiently than can be achieved without the technology. The solution also includes a tracking system for monitoring progress at both the account and institutional levels.
The innovation integrates Alston & Bird’s market-leading finance practices, scalable attorney resources, and project management experience and leverages them with best-of-class technology from leading third-party software providers, including machine learning, e-discovery, and contract review – all supported by a secure data environment certified with the best-known cyber information security standard, ISO 27001. Also, by drawing on its vast understanding of financial transactions involving LIBOR-pegged rates, Alston & Bird has customized these advanced technologies to deliver even greater value in reviewing contracts for LIBOR provisions.
While many in the market, including software providers and consulting firms, are offering tools to address LIBOR transition issues, and other providers are partnering across platforms, Alston & Bird’s approach represents a one-stop solution.
“In looking for a LIBOR transition solution for our clients, we assessed what others had in the market and were not satisfied with the accuracy and quality control available,” said Jason Solomon, Alston & Bird Finance partner. “So we custom-built our own solution using proven technology and combined it with our legal experience, market knowledge, and large-project proficiency that we have developed and refined over many years to save clients time and money across a wide range of matters in data privacy, government investigations, due diligence, and litigation. By providing a one-stop solution, we have avoided gaps of continuity, project control issues, and costs associated when multiple providers are engaged.”
The new technology-assisted workflow is the latest initiative by Alston & Bird to help clients successfully navigate the transition from LIBOR. In October, the firm launched its LIBOR Transition Task Force. A multidisciplinary group spanning several Alston & Bird practices – including structured and corporate debt finance, corporate trust, financial services, litigation, real estate finance, and consumer financial services – the cross-disciplinary task force is led by partners Aimee Cummo, John Doherty, Blake Estes, Mark Harris, Paul Hespel, Deanna Kashdan, Bill Macurda, Andrew Petersen, Jason Solomon, Nanci Weissgold, and Courtney Wright and technology director Gabriel Walsh.
Combining the firm’s large-project legal experience with data mining, artificial intelligence, and other technology-enabled tools, the new offering provides a cost-effective, defendable solution to LIBOR transition issues facing nearly all financial institutions.
“More than $200 trillion in notional transactions reference LIBOR in the cash and derivatives markets, with more than $35 trillion extending past 2021,” said Aimee Cummo, Alston & Bird Finance partner and leader of the firm’s LIBOR Transition Task Force. “For banks and other financial institutions facing the herculean task of reviewing, categorizing, and solving for millions of outstanding LIBOR contracts, our approach to utilizing the technology can reduce the time and cost of dealing with the significant legal and administrative challenges across very large platforms.”
Alston & Bird’s solution addresses the substantial account management challenges facing financial companies in transitioning to a LIBOR replacement across sizable contract populations, enabling clients to identify and quantify their LIBOR exposure – either at the contract level or across all contracts within an institution – more efficiently than can be achieved without the technology. The solution also includes a tracking system for monitoring progress at both the account and institutional levels.
The innovation integrates Alston & Bird’s market-leading finance practices, scalable attorney resources, and project management experience and leverages them with best-of-class technology from leading third-party software providers, including machine learning, e-discovery, and contract review – all supported by a secure data environment certified with the best-known cyber information security standard, ISO 27001. Also, by drawing on its vast understanding of financial transactions involving LIBOR-pegged rates, Alston & Bird has customized these advanced technologies to deliver even greater value in reviewing contracts for LIBOR provisions.
While many in the market, including software providers and consulting firms, are offering tools to address LIBOR transition issues, and other providers are partnering across platforms, Alston & Bird’s approach represents a one-stop solution.
“In looking for a LIBOR transition solution for our clients, we assessed what others had in the market and were not satisfied with the accuracy and quality control available,” said Jason Solomon, Alston & Bird Finance partner. “So we custom-built our own solution using proven technology and combined it with our legal experience, market knowledge, and large-project proficiency that we have developed and refined over many years to save clients time and money across a wide range of matters in data privacy, government investigations, due diligence, and litigation. By providing a one-stop solution, we have avoided gaps of continuity, project control issues, and costs associated when multiple providers are engaged.”
The new technology-assisted workflow is the latest initiative by Alston & Bird to help clients successfully navigate the transition from LIBOR. In October, the firm launched its LIBOR Transition Task Force. A multidisciplinary group spanning several Alston & Bird practices – including structured and corporate debt finance, corporate trust, financial services, litigation, real estate finance, and consumer financial services – the cross-disciplinary task force is led by partners Aimee Cummo, John Doherty, Blake Estes, Mark Harris, Paul Hespel, Deanna Kashdan, Bill Macurda, Andrew Petersen, Jason Solomon, Nanci Weissgold, and Courtney Wright and technology director Gabriel Walsh.