Why Legal Firms Need Data Room Software
With such a great number of clients to serve, large piles of documentation to manage and confidential projects to execute, legal firms require a proper place where they could keep their sensitive information and make it easily accessible yet secure. VDR providers give legal firms a chance to use secure data storage solutions which your whole team can implement within a couple of minutes.
There are many reasons why law firms might wish to use VDR solutions in their operations. In particular, data rooms are used by legal firms for the following purposes:
- M&A procedures;
- Raising of capital;
- Establishment of strategic partnerships;
- Legal litigation;
- Cases of bankruptcy.
Data rooms help streamline the process of legal litigation by providing an easy-to-use online space where all the participants can collaborate and share documents with other concerned individuals. It is quite easy to set up a virtual data room especially because this process does not take too much time.
How VDRs Are Used in Legal Sphere
Data rooms have different use cases when it comes to using them for legal purposes. Thus, VDRs allow doing the following:
- Uploading checklists and files. It is easy to import the document checklist into the online repository within just a few seconds;
- Regulating user access and setting permissions. You can easily control who can view or download your documents. You can also restrict the access to certain files by IP address or apply watermarks as an additional security measure;
- Sending notifications and alerts to users. It is possible to set automatic notifications in order to know for sure when the new files are added to the data warehouse for future use. These documents can be viewed only by authorized users;
- Keeping track of data room activity. User activity can be easily tracked by means of special features.
In this way, although litigation is known as a difficult process, the use of data rooms for this procedure simplifies the matters considerably.
Types of Legal Practices Where VDRs Can Be Used
Virtual data rooms are currently used across different businesses and industry segments. They are beneficial and suitable for many types of law practices. In this regard, corporate law is one of those spheres that were the first to see the benefits of virtual data rooms in contrast to the use of traditional data storages. Over time, the merits of using VDRs for the needs of legal firms have become especially pronounced so that nowadays law companies use this way of storing data in many spheres such as the following:
- Corporate law. The M&A process can be tiresome and complex which is why online data rooms prove to be especially helpful for banking entities and lawyers who are engaged in the due diligence procedure. In this way, dealmakers continue to benefit from the use of data rooms in their legal practices. What’s more, all processes are now better protected than previously because VDRs are covered by multiple layers of security which are aimed at preventing the hacker’s attacks and other hazards;
- Corporate finance sphere. Virtual data rooms represent an excellent tool for lawyers who work in the sphere of corporate finance as all the transactions can now be carried out with greater ease and in a safer way than previously;
- Legal litigation. Litigation lawyers often require exchanging sensitive data with others quickly and reliably. In this regard, VDRs can give them such an opportunity. That’s because they provide a safe and confidential space for collaborations with various experts, clients and other litigation participants.
Benefits of Using VDRs for Legal Litigation
Among the most significant benefits of VDRs is that they offer a completely secure environment which is protected by the strictest security measures imaginable. The privacy of users and confidentiality of data are maintained at all costs, and this is especially crucial for lawyers engaged in legal practices. If a lawyer fails to protect customers, this may cause financial damage to them, and the given lawyer can even face disciplinary measures in his/her professional field. This is where VDRs appear to be especially useful because they offer secure storage space for legal documents.
All data are protected with the two-factor authentication process and the user access can also be controlled. It is possible to regulate who can only view files and who can download them. At the same time, it is also possible to set up extra security features to protect sensitive data even better.
The ease of use is another benefit of using VDRs for legal practices. Data rooms do not take too much time to set up as the whole process takes just several minutes. What’s more, data rooms are added with a quick search tool to ensure that lawyers can search for the necessary users and documents whenever such a need arises. In this way, the use of VDRs allows streamlining the judicial procedures.