Victoria Langley The private equity industry has had a long run of success, including some recent record-breaking years. Underneath these achievements, however, there’s a crisis brewing over the rising cost of operating large funds in a competitive market with intense regulatory scrutiny. There’s a widening gap between the resources firms need vs. the resources they currently have. Firms need a plan to address these skyrocketing operating expenses.
Leading private fund managers are beginning to understand that digital innovation within legal operations could bridge that gap. Firms willing to undergo a digital transformation can better position themselves to achieve competitive returns no matter the economic climate.
What is legal operations?
Legal operations, or legal ops, is a collection of business processes, technologies, activities, and professionals that enable in-house legal departments to serve the business effectively and drive value. Legal ops applies business practices to the delivery of legal services, allowing employees to operate predictably and efficiently in pursuit of the company’s near- and long-term goals.
Legal ops is not for in-house lawyers alone and, instead, involves stakeholders from across the organization. Legal ops professionals, tech solutions, and processes support in-house legal departments with project management, financial management, strategic planning, and technology expertise.
Over the years, legal ops has shifted priorities from reducing costs to driving strategic value for the business and, most recently, to championing innovation. When legal ops focuses on digitally transforming manual and routine legal tasks, private fund managers can experience numerous benefits, including lower costs and more time for strategic tasks. Ultimately, by implementing efficiencies within legal processes, firms can remain competitive in a high-stakes market.
What is a legal operating system?
A legal operating system, a Legal OS or LOS, is a platform that streamlines legal workflows for core functions. For fund managers, it’s a combination of technology solutions and internal processes to comprehensively and efficiently manage legal tasks throughout the fund lifecycle.
Ontra’s Legal Operating System for Private Markets
Ontra’s Legal Operating System currently comprises Contract Automation, Insight, and Ontra Atlas.
Ontra partnered with the world’s leading investment firms to develop a suite of solutions that deliver a Legal OS for private markets. Our solutions digitally transform key legal processes within fundraising, investing, and ongoing fund and portfolio management.
Contract Automation
Ontra’s Contract Automation is an end-to-end contract negotiation platform that integrates proprietary artificial intelligence (AI) and OpenAI’s GPT-4. Contract Automation streamlines the negotiation and execution of routine legal agreements through a unique combination of purpose-built, industry-specific AI capabilities and an experienced global network of legal professionals.
Embedded AI-driven data insights and workflow tools make it easy for lawyers to surface precedent, automate redlines, and generate suggested markups. With customizable digital playbooks and historical negotiation information available, legal teams negotiate routine agreements more consistently and effectively.
To date, Ontra’s Legal Network has collectively processed over 1,000,000 legal documents for more than 600 financial services clients. Our massive, industry-leading contract repository gives us unique insight into what’s on- or off-market for private equity NDAs.
Insight
Insight is the AI platform powering the private fund lifecycle. Insight translates the fund obligations buried in legal documents, such as limited partnership agreements and side letters, into structured data that private fund managers can use to manage their commitments to investors, inform negotiations, and respond to SEC exams.
Insight includes:
- AI-enabled contract digitization
- Searchable, digital compendium
- Obligation compliance workflows
- Digital MFN elections & investor disclosures
Contract and regulatory compliance are critical parts of the private fund lifecycle, particularly as side letters grow in complexity and the SEC scrutinizes private fund managers. Insight provides a way for firms to address their varied side letter commitments on time and at scale.
Ontra Atlas
Ontra Atlas is an AI-powered modern entity management solution built for private equity. Customers leverage AI-enabled workflows to organize, manage, and share the entity data, structure charts, and associated legal documents involved in firm and fund management, creating a single, digital source of truth for entity information.
With Ontra Atlas, private funds can:
- Visualize entity relationships and reference key information, including beneficial ownership information, with ease.
- Make single-point updates that automatically apply across entities and structures.
- Share and control access internally and with third parties.
With this modern entity management solution, private fund managers can reduce the time-consuming manual tasks associated with maintaining entity information. They can centralize their compliance efforts, decrease costs, and improve collaboration.
Combined, these three products create the premier Legal Operating System for Private Markets, giving private fund managers the ability to digitally transform their legal operations and maintain a competitive edge in an evolving, high-stakes market.
The digital transformation for private fund managers
Firms faced far fewer challenges during PE’s most successful years. Now, as firms move through years defined by economic uncertainty, they have to address the fact that the PE industry has fundamentally changed, resulting in more challenging fundraises, bespoke requests from investors, expanding fund sizes, heightened regulatory scrutiny, increasing legal complexity, and rising costs.
Leading firms are addressing these changes with digital transformation. They’re implementing AI-powered solutions to enhance efficiency, streamline manual processes, and take back time to focus on strategic initiatives.
If you’re ready to improve legal ops with purpose-built AI for private fund managers, reach out for a Legal OS demo today.
