Magic Circle firm Allen & Overy has launched a separate entity to apply technology to solve a commercial contracting challenge. 

A&O launches document management company reports on A&O’s launch of docGenix, whose “mission is to develop innovative legal documentation risk management solutions for the international financial markets, initially focusing on OTC derivatives.”

Right now, docGenix is focusing on ISDA (International Swaps and Derivatives Association) agreements. The company will tag ISDA documents to make them easier to manage and analyze. It’s not possible easily to explainthis without being a bit techie.

Lawyers have to learn about XML, a computer tagging language (Extensible Markup Language). If not because of docGenix then because the SEC will soon mandate public disclosure filings in XML cousin XBRL.

As I understand it, docGenix will turn contracts into “instantiations of database records” which I’ve long thought is the right view of a contract. What does that mean? Many contracts can be thought of as a series of fields with values. Those values can be placed in database fields and then be sorted, compared, manipulated, and managed. Historically, there has been no linkage between contracts and databases. XML allows that linkage. One “view” is a contract as most lawyers visualize it – lots of text with some numbers thrown in. Another view is a bunch of numbers connected by some text but what’s really important are those numbers (and the names of parties and locations of assets – all of which are also fields).

I think that this is an exciting development. Leases, especially portfolio of leases, would benefit from a similar treatment.