One of the only consistent aspects of the area of financial services regulation is that things are always changing. The international drive towards encouraging good conduct in financial services firms, and the post-2008 emphasis on maintaining sound and resilient markets, has created an avalanche of regulatory requirements so that merely keeping up with what might apply to a financial services firm is a job in itself. Clients are constantly pushing for efficient solutions that embrace modern technology and leave them free to focus on the issues that really matter, such as running successful and profitable businesses.

Further challenges exist for financial services lawyers working in private practice: the need to keep up-to-date with new developments in the law is a constant pressure. The smart use of technological solutions to help gather and share knowledge will benefit both lawyers and clients.

The reform of the Markets in Financial Instruments Directive (2004/39/EC) (MiFID) has so far involved in excess of 2,000 pages of consultation, debate and draft standards, with more to come. The recasting of MiFID as a new directive (2014/65/EU) and a new Regulation (Regulation 600/124) (together, MiFID II) is one of the most significant pieces of regulatory reform seen in Europe since the implementation of MiFID in November 2007. It will be time-consuming and costly for numerous different lawyers at the same law firm to each examine and analyse the same source materials, particularly with such a large volume of materials. However, it is essential that all lawyers understand the source materials so that they can quickly cut to the issues that matter to a business.

A potential solution is to use technology to enable issues to be identified in an efficient way, for example, through the creation of an intuitive, succinct and smart tool such as the MiFID2 Manager.

The MiFID2 Manager not only provides legal analysis, it also has the capacity for clients to use it as a project management tool as they work towards implementing substantial changes to their business in order to comply with new requirements.

Law firms have long been adept at producing gap analysis tools, which are useful, but the MiFID2 Manager seeks to go a step further and identify the practical steps that a firm should take in order to prepare for implementation, and also the business areas that will be most affected. The MiFID2 Manager uses sound and insightful legal analysis as the basis from which to identify practical action points, which will be particularly useful to financial institutions, investment firms and those working in compliance, risk and operations.

The MiFID2 Manager offers significant time savings to clients, both in identifying the elements of MiFID II reform that will have the greatest impact on their businesses, and in releasing in-house counsel from having to explain, many times over, what these requirements mean in practice to various stakeholders.

One of the most challenging aspects of regulatory reform is the evolving and ever-changing nature of the rules and guidance at both a national and EU level. The MiFID2 Manager provides monthly updates covering legislative changes, local implementation changes in key jurisdictions and legal certainty issues. The updates also include practical action points, with references to the previous version flagged for the users’ convenience.

Another significant benefit to clients in using a hybrid legal and project management tool is that it can enable internal tracking and recording of key decisions, link these to the legal requirements, and cross-reference these to the likely effects on business. So when a regulator calls with questions about a client’s plans for preparing for and implementing MiFID II, the client’s in-house legal and compliance staff can reach for the MiFID2 Manager, which can act as a central repository for material information.

The MiFID2 Manager can also enable clarity of reporting to a client’s board of directors. A simple “red, amber, green” rating system, which is applied to all of the subject areas in MiFID II, enables a client to quickly identify what it needs to report and where it needs to focus its energy and resources. This frees up significant internal and external resources because the client’s employees do not have to engage in extensive research and analysis, but nor is the client incurring high legal fees charged at an hourly rate.

Although a tool such as the MiFID2 Manager brings many benefits to its users, it is important to acknowledge the limitations in providing legal information in this way. It cannot, and should not, replace the need for bespoke legal advice on the most complex and singular issues. A client may have particular reasons for investing more heavily in changes in response to a new regulatory restriction or requirement, so it may be more prudent for it to spend more on high-quality, bespoke legal advice in order to ensure that all angles have been considered.

It is clear that the provision of high-quality legal advice and related services to clients in an efficient and cost-effective way can be significantly enhanced by the skilful use of technology. Tools such as the MiFID2 Manager ensure that clients can effectively control legal spend and focus on instructing lawyers where they are exposed to the greatest degree of legal, business or regulatory risk. These tools also mark a move towards the fact that the best law firms are keen to provide their clients with business-focused and practical assistance and advice that is delivered through the most appropriate medium. However, it is important to remember that these high-quality online services aim to enhance the client experience, rather than to replace the lawyer-client relationship.

Charlotte Stalin is a partner at Simmons & Simmons. Further information about the MiFID2 Manager is available at www.elexica.com/en/Resources/Microsite/MiFID-2-Tracker/MiFID2-Manager.