The London Interbank Offered Rate is found in hundreds of thousands of financial contracts with an estimated $200 trillion value. But by Jan. 1, 2022, LIBOR must be replaced with another benchmark rate. 

If recent COVID-19 events have some financial institutions waiting for an extension, the U.K.'s Financial Conduct Authority recently stomped out those dreams when the regulator announced it wouldn't adjust the deadline in light of the pandemic.

With no flexibility in sight, lawyers say clients have to start the transitioning process by leveraging not only lawyers' legal expertise, but also appropriate technology.

"We saw a real opportunity for technology to help our clients transition from LIBOR in an efficient way," said McGuireWoods partner Clayton Stallbaumer. "The problem they have is it's a volume and timing issue. We're roughly 18 months from LIBOR going away, and a lot of our institutional clients have thousands of documents that reference LIBOR. As we were talking to clients about this, there seems to be a real opportunity to use certain types of technology."

Some of technology needed can include data analysis, contract review, template automation and mass email notification tools.

To be sure, lawyers note LIBOR is a complex regulatory shift unlike the General Data Protection Regulation, California Consumer Privacy Act and other recent regulations.

"I think in terms of the numbers of project-type work [that] banks have had to do over the past five years or so … the GDPR and Brexit, those types of projects have been relatively legal light touches," said Dentons partner and derivatives practice member Luke Whitmore.

However, transitioning away from LIBOR, which includes adding contract provisions and renegotiating rates, requires significant heavy lifting, notes Joyce Xu, who leads Paul Hastings' global derivatives practice and global LIBOR transition task force.

"We've talked with AI and legal tech providers, and we've licensed our own software that helps with the initial review that references LIBOR," she said. "And I think pretty much all of our clients that have significant books with contracts are looking to utilize AI technology to help them initially identify the universe of contracts."

Law firms are also taking the initiative and partnering with legal tech providers to assist the LIBOR transition, including Mayer Brown, which on May 21 announced such a partnership with legal and compliance provider Morae. 

When asked how technology can expedite the transition process, Mayer Brown partner and LIBOR transition leader Paul Forrester noted that tools can quickly analyze data based on the lawyers' classifications and automate the assignment of amended contract templates. Additionally, he said software can also email contract readjustment notifications to third parties. He explained that all of these are efficiencies that law firms need to harness to assist clients during particularly laborious matters.

"A lot of companies that need that additionally help, there's a real efficiency with having the collaboration," Forrester said. "It's not going to be for everyone, but I do think more firms should be more open than what they have been historically with that collaboration."