Legal Opinion Management

The management of capacity & authority, netting and collateral opinions has always been a key function of an investment bank’s in-house legal department.  The requirements for appropriate management processes and systems is increasingly the focus of regulatory attention and scrutiny.

It is common practice across the banking industry to maintain netting and collateral enforceability data to record, for each jurisdiction, the list of “entity types” against which it has determined that netting and collateral would be enforceable in a close-out scenario.

For any legal department, building and maintaining such data requires the implementation of a sophisticated process involving several stakeholders/parties (e.g. Risk Management, Documentation Negotiators, the Business and external law firms) and encompassing the full lifecycle of the legal opinions (i.e. commission, analysis, application, storage, review and regular update).

Several factors may challenge the integrity of the netting data for a particular jurisdiction, including changes to legislation and new case law, new regulatory requirements, as well as simply the lapse of time since a netting opinion was last obtained. In addition internal organisation restructuring, IT tools transformation and legal department funding issues are challenges faced by many clients.

WHAT WE DO?

At D2LT, we have assisted our clients with assessing and remediating their opinion libraries across the full legal opinion life cycle i.e. from building the business case for missing opinions to obtaining and recording them. We have advised on the design and implementation of legal opinion management operating models that achieve dramatic cost reductions through tight control on business benefits vs legal opinions being commissioned and effective integration of the legal opinion data with the downstream processes and systems.