D2 Legal Technology Unlocking business value through legal change in a multifaceted world

In this digital age, companies are often put in a position where they need to exhibit survival skills against fundamental conservatism. A legal data consulting firm comes in handy in situations like this; they are trusted advisors pushing companies to achieve their very best, gaining ultimate business value through legal change.

D2 Legal Technology is an institution that has multiple legal and technology consultants who help process legal data and use technology and process optimization to help businesses grow and achieve their very best. The company was founded by Akber Datoo, who started off his professional career, after studying computer science at Cambridge University, on the trading floor of the investment bank UBS in 1999, building trading platforms, working with the new industry standards such as fpML, and helping to price and manage risk-complex fixed income derivatives.

CIO Bulletin sat down for an interview with CEO Akber Datoo to talk about the company.

Q. Why was D2 Legal Technology set up? What’s the story of the company?

D2 Legal Technology (D2LT) was set up to unlock business value by ensuring that legal documentation and advice are considered in the context of an increasingly digital agenda. Within financial services, it is critical that FinTech is considered in the context of optimizing financial services through the solving of business demands and needs, recognizing that in many cases, the contractual obligations of the financial instruments and laws and regulations are an important part of the optimum solution.

The derivatives industry was growing at a rapid pace, fueled by the use of technology, systems, and data. However, this was seemingly not matched by the way in which the legal documentation, such as the ISDA Master Agreements and related collateral documentation, was put in place.These were very much paper-based and disconnected from the systems and data-driven approach being increasingly embraced by the trading desks, treasury, risk, collateral, and others. We felt this had to change; without this, the business would be limited in terms of the ability to optimize resources such as regulatory capital and collateral and considerations such as liquidity. A financial crisis would show many years later that this was, of course, not just about business optimization but also risk management and financial stability.

Realizing that there had to be a much better way where legal teams and attorneys engaged in the digital agenda, I decided to retrain as a lawyer, eventually working at the magic circle law firm Allen & Overy in their market-leading derivatives and structured finance practice. Jeffrey Golden KC (Hon) was a principal author of the ISDA Master Agreement in the mid-80s and was hailed as “Mr. Derivatives” (Chambers and Partners) and credited with having “written the law on derivatives” (Legal 500).

However, the aim was not to become a lawyer but rather to help digitize the law. In 2011, I decided to combine my technology and legal skill sets and founded D2 Legal Technology.

Q. How has D2 Legal Technology grown since its inception?

D2LT has grown from a lone consultant at the start to a global award-winning consulting firm with offices across Europe (with its headquarters in London), North America (New York, Charlotte, and Toronto), Asia (Hong Kong and Singapore), and Australia (Sydney).

It has filled a much-needed gap, acting as a trusted advisor to financial institutions on process, data, and the use of technology to unlock business value through legal change. We have been involved in helping clients define their target state and vision, running vendor selection processes, and then implementing and achieving this vision.

There has also been significant work on smart legal opinions, seeking to automate the application of legal advice contained in close-out netting and collateral enforceability. Legal opinions are vital to credit risk management and regulatory capital for prudentially regulated financial firms. In fact, D2LT is currently sponsoring a PhD student exploring this area in detail at the University of Surrey in the UK, which has the potential to greatly assist firms through a more efficient approach to the legal analysis that will optimize capital.

Of course, the combined skillset of law and technology within financial services has also allowed D2LT to offer cutting edge guidance and work in the areas of digital assets (such as tokenization of securities and NFTs), blockchain and distributed ledger technologies, and the use of Artificial Intelligence (AI) within financial services and within the legal profession. D2LT has played a leading role in helping firms understand how best to utilize such leading technology and ensure its appropriate use given the dangers it also poses, from the inherent bias it may bring to protecting against and being aware of hallucinations, explainability, data privacy, intellectual property considerations, and compliance with laws and regulations more generally. We have accordingly helped firms with their governance and AI usage policies and procedures in this area.

Q. What are the values by which D2 Legal Technology operates?

We place huge importance on the values of Integrity, Boldness, Trust, Accountability, Commitment to Customers, Passion, Fun, and Humility.

Q. What is the company’s philosophy on innovation?

Innovation is critical to D2LT, given its beginnings in seeking to empower financial services through the solving of legal problems that arise. The law is an “information processing-based profession,” which means there are significant legal automation and digitalization opportunities within financial services. We are keen to ensure that our clients truly understand the opportunity of the new digital agenda—with real, substantial innovation-led process change rather than digitizing a poor process.

Accordingly, our approach to innovation is centered on the creation of industry-wide legal agreement and data standards (such as our work with ISDA, ICMA, and ISLA for the derivatives, repo, and securities lending industries on clause taxonomies and libraries, as well as counterparty type, agreement type, clause, and product taxonomies in the context of master agreement legal opinions).

Innovation needs to be done not just with the end goal of cost reduction and efficiency gains but also by leveraging digitization and data connectivity to streamline and de-duplicate in a bid to create flexible and enduring service models that are critically embedded within business operations.

Our philosophy is to ensure that innovation embraces both a technological and creative dimension, together with the key step of being able to move from prototypes to production. We seek to avoid the increasing number of solutions looking for problems through engagement with our clients to add business value that necessitates the use of innovation, be it due to regulatory or market change.

A brief biography of the CEO

Akber Datoo is the CEO and Founder of D2 Legal Technology; he was inspired by reading Richard Susskind’s seminal text, “The End of Lawyers”. He is a qualified lawyer (ex-Allen & Overy (Derivatives and Structured Group)) and IT Developer (UBS) and thought leader in LegalTech, recognized by a “Top-ten market shaper” by the Financial Times.

He is the Chair of the Law Society of England & Wales Subcommittee on Digital Assets & Smart Contracts as well as a strategic adviser to ISDA, ICMA and ISLA. He also serves as Professor at University of Surrey (AI & Ethics, LegalTech+Fin. Services Regulation and Policy).

“Lawyers are often too worried about failure. Yet successful innovation requires one to be able to act in an agile way, and learn to iterate to success.”