In spring 2020, corporate legal departments were leaning heavily on their document review software to find force majeure clauses as the pandemic disrupted most business activities. Now, all digital eyes are on any possible contractual connections to sanctioned Russian entities or oligarchs, legal tech companies said.
“There’s other consultancies, law firms and legal technology companies helping their customers navigate Russian sanctions,” noted Brandon Daniels, president of due diligence, risk and compliance provider Exiger.
The growing list of sanctions levied against Russia is a ripe opportunity for leveraging AI to thoroughly review contracts, added Luke Taylor, subject matter expert for AI-powered document review platform Luminance Technologies.
“When you have all these sanctions imposed on Russia and you have so many organizations that are global in their stature, at this point [you’re] trying to assess and understand all your contracts across supply chains and the entire company,” Taylor said.
To be sure, some legal tech and services providers are also creating new offerings to assist clients.
Exiger, for example, in December 2021 began offering its clients the option to review their vendor and supply chains for potential connections to Russia as a Russia-Ukraine war became increasingly likely, Daniels said.
To spot regulatory or business risk, Exiger first conducts an AI-powered contract review of their client’s supply chain and business relationships to spot connections to any sanctioned entities and persons, Daniels said. Exiger leverages global regulators’ sanctions lists, corporate registers and other corporate data to look for overlap and flags potential risk, he added.
Daniels noted Russia-specific supply chain analysis was between 40% to 50% of the work Exiger conducted in late February.
However, it’s not only clients that seek to distance themselves from sanctioned entities or persons. Daniels revealed Exiger no longer provides due diligence services for sanctioned oligarchs fleeing Russia and it has paused its work with Russian entities.
“Russia is a major source of enhanced due diligence on the investigation side. A lot of Russian citizens move assets and investments into other countries, and by proactively saying we won’t do work with Russian banks, we will not work with named Russian oligarchs that were subject to sanctions [and we won’t] work with Russian-owned entities, there’s potentially millions of dollars of work [at stake]. There’s consultancies and law firms still doing that work … [but] it’s more important to choose freedom on this one,” he said.
Still, while some legal tech and services providers are reassessing their own business affiliations, the heightened regulatory environment does create an upswing in work.
Luminance, for instance, is seeing an uptick in users eager to predict current or future exposure to sanctions, noted Luminance subject matter expert Taylor.
“They are looking for jurisdictional spread across all of their documents,” Luke said. They are trying “to be proactive to find if there’s other countries and oligarchs that are being involved. There’s a huge uptick in that,” he added.
