The New Firmex Blog is Live!

Jan 28, 2010 - by Joel Lessem

Welcome to the new and improved Firmex Blog, an online space to discuss about secure document exchange and collaboration, virtual data room technology and its applications, M&A trends and news, secure extranets, and many other related topics.Aside from the new look, new content and features, there are some specific goals we would like to achieve with this blog.

• As one of the leaders in our industry, we want to contribute to the ongoing conversation on topics related to secure document collaboration and virtual data room environments.

• Deliver value added content, articles, news and case studies to corporations, investment banks, law firms  and any organization looking to securely organize and exchange confidential documents online.

• To answer your questions and concerns on secure online information exchange and collaboration.  If you are conducting a due diligence process, reviewing transaction drafts, closing deals, running audits., providing document libraries for clients  or across organizations  as part of a corporate initiative, we want to hear from you.

• We survey 1000s of users every year. We are interested in hearing your comments, questions, inquiries and product ideas as we continuously expand the uses and functions of our technology.

• However, above all, we want to listen to you, our reader. Come and help us shape the industry and deliver even better value to organizations around the world.

Once again, welcome and thanks for dropping by!

Defining Due Diligence

Feb 18, 2010 - by Aaron Booth

In the business world, Due Diligence refers to the act of investigating information related to people and businesses. This can be on a voluntary basis as in conducting a background check on a future employee, or it can be a legal requirement as in investigating the legal issues around a corporate takeover bid.  However, the most common type of Due Diligence performed in business typically relates to that which is performed in relation to a merger or acquisition (M&A).

The M&A process involves buyers and sellers of businesses connecting with other buyers and sellers to complete transactions that result in one business acquiring another or two business combining into one. For example, in a typical sell-side M&A deal, a seller put together a confidential information memorandum (CIM) and distributes that document to potential buyers.   When serious buyers are identified, letters of intent are signed and the seller shares additional information with the buyers.

This is the preliminary Due Diligence, and the point at which interested buyers investigate more detailed information to determine if they will submit a letter of intent to enter into a purchase and sale agreement and close the transaction. Once a final buyer has been identified, the real Due Diligence begins. It is at this point that the potential buy and seller have agreed to share all information related to the business so that the buyer can investigate the financial statements, tax returns, inventory, fixed assets etc. in an effort to verify their understanding of the state of the business and to finalize a purchase price. In some instances, Due Diligence has been described as a process in which buyers look for reasons to reduce their risk and lower the purchase price prior to the close of a transaction.

Alternatives to Expensive and Time-Consuming Air Travel

Feb 23, 2010 - by Nicole Black

Let’s face it, these days, business air travel is a costly proposition—it’s expensive and takes up valuable time.

And, travel time is only increasing due to the recent attempted terror attack, as widely reported in the press.  For example, as explained in a recent Montreal Gazette article:

Massive lines, flight delays and cancellations greeted Canadian passengers traveling to the United States on Sunday as new security measures moved into a second day and another suspicious incident was reported on board a U.S. flight, increasing tensions.

Weather delays aren’t helping matters either, now that we’re in the midst of a long, cold winter, as detailed in this Chicago Sun Times article:

A messy winter storm — which could bring up to a foot of snow…— caused major headaches for travelers…prompting more than 500 flight cancellations at  both city airports.

One way businesses can avoid the time suck of costly air travel is to utilize innovative alternatives to face-to-face business meetings, such as video conferencing, screen sharing and online document sharing.

Cloud Computing Industry Reaches New Heights in Design

Mar 11, 2010 - by Robert Wilder

Ad agencies and design firms, as creative shops, have always used the design of their spaces to inspire their employees to creative heights. But, really, it’s in every business owner’s interest, no matter what industry, to build an employee environment that invites creativity and productivity.

Firmex’s software engineers, busily developing hyper-secure code that drives millions of mission-critical documents that are accessed by 10,000s of users every month, should be treated to a space that is as dynamic as their work in the SaaS industry. Also, a large portion of our business as a data room provider is devoted to making our clients happy, with an in-house client services staff working 24/7 to help people with transactions valued in the billions of dollars every month. Happy employees mean happy customers, and a happy employee begins with a great work environment - that’s why I decided to design a new office that was both practical and aesthetically pleasing.

Although I had a brief two months to complete the project with my designer, I knew what I wanted: a simple space, full of natural light, that wouldn’t be overdesigned to the point of distraction.  I wanted the new space to act as a simple canvas for expression. The space itself was inspiring – great views, high ceilings and columns that reminded me of the Frank Lloyd Wright-designed SC Johnson building.

Firmex Adopts Net Promoter Score for Client Satisfaction

Apr 15, 2010 - by Aaron Booth

In late 2008 we at Firmex were discussing strategy around enhancing our data room service for client satisfaction and planning for the future. We identified the need for a benchmark to measure our success in delivering our service to our clients. We also needed a better understanding of how clients feel about what we deliver and what they need in the future to enhance their experience.

In my time at GE, we used the Net Promoter Score (NPS). It proved to be a valuable tool for measuring customer satisfaction and loyalty, while obtaining valuable feedback direct from clients. It seemed like a logical choice for what we needed to accomplish.

NPS is a simple but effective measure of customer loyalty used by many leading companies including Apple, GE, IBM, American Express – this list goes on.  The NPS approach is to ask your customers two simple questions:

1. Are you willing to recommend us to a colleague, client, or business partner and
2. Please tell us why.

Life Sciences: Highly Confidential Intellectual Property and Virtual Data Rooms

May 13, 2010 - by Joel Lessem

Many Firmex clients are Life Sciences firms developing new therapeutic medicines.  What amazes me about this industry is the time horizon of 15+ years to take a drug from idea to market, costing millions, even billions of dollars. There are 3000-4000 early-stage research-driven firms funded by public markets or venture-capital that take on the technology risk of trying to develop new drug pipeline.

The process to take a new drug through pre-clinical and clinical trials is extensive. Through the process, Life Sciences firms develop new chemical molecules.  The structure of these molecules and their development are potentially worth astronomical amounts of money.  Therefore, the exhaustive trials have to be guarded and kept highly confidential.

In the clinical development process, elements of the firm’s intellectual property (IP) are often shared with scientific consultants, investors and ethics committees from clinical trial sites or jurisdictions.  Additionally, the IP is often reviewed by larger pharmaceutical firms seeking to either license, co-develop or buy the IP from the research based firms.

Book Review: The Checklist Manifesto

Jul 8, 2010 - by John Gillies

In The Checklist Manifesto, Dr. Atul Gawande examines how the use of checklists can significantly improve workflows and outcomes in the work environment. He focuses primarily on the aviation and construction industries, and analyzes where and how checklists are used. He speaks as well about his experience in a WHO-sponsored initiative bringing checklists to surgical operating theatres around the world. There are, I believe, possible applications of his ideas within a law firm.

[Dr. Gawande is a general and endocrine surgeon at Brigham and Women’s Hospital in Boston. He is an associate professor at Harvard Medical School and leads the World Health Organization’s Safe Surgery Saves Lives program. He is also the author of two other books, Better: A Surgeon’s Notes on Performance and Complications: A Surgeon’s Notes on an Imperfect Science", and is a staff writer for The New Yorker. The genesis for his book was an article on checklists in The New Yorker in December 2007].

Dr. Gawande examines in some detail the genesis of checklists in the aviation industry, a major result of which is the incredible safety record that the industry enjoys, despite the obvious complexity involved in any flight.

Private Placements: Why not use a Virtual Data Room?

Jul 15, 2010 - by Aaron Booth

Recently, I have been talking to professionals that specialize in issuing private placements. A private placement is a funding round of securities that are issued to a select group of targeted, private investors. In my discussions, it has become apparent that there is an opportunity for professionals in this space to leverage the capabilities of a virtual data room, particularly if they manage more than one of these transactions annually.

The existing trend in managing the distribution of documents to investors is email, which is unsecure and unable to provide intelligence. There are multiple opportunities throughout the private placement process where a virtual data room can be used in place of email to provide a faster, more secure method of delivering documents while also unlocking valuable data points that can accelerate the transaction and improve the efficiency of locating qualified and accredited investors that want to participate. The following points demonstrate the opportunities at each stage of the Private Placement process:

Strategic Assessment: Financial professionals first must analyze a business in order to make recommendations on financing alternatives that may include PP. The documents that must be shared can be large in quantity and confidential. A virtual data room is an attractive alternative to email for collecting and sharing this information in an organized fashion while keeping the data safe.

How Can Lawyers use Virtual Data Rooms in Their Practice?

Jul 20, 2010 - by Nicole Black

As I’ve discussed in the past, online collaboration platforms generally allow for far more secure communication than email and offer attorneys a secure online location for collaboration.

But what types of specific transactions can be handled in online collaboration platforms such as virtual data rooms? Well, the answer depends on the type of law that you practice.

Likewise, online document repositories can be very useful for real estate matters, allowing lawyers to more easily manage sales and leases, in addition to restructuring asset backed loans & mortgages.

Restructuring and Insolvency transactions are also well suited for virtual deal rooms. Lawyers can use virtual data rooms to organize files in multiple structures within the same project to control access to files and functionality and create additional deal rooms to buy and sell assets, close financings, or raise additional capital.

Corporations Choose SaaS Solutions for Secure Online File Sharing

Sep 16, 2010 - by Aaron Booth

In the past six months, we’ve noticed that corporations of various sizes across multiple industries have been turning to SaaS solutions to share large volumes of critical information beyond their office firewall.  More specifically energy, biotech, manufacturing, health care and pension fund sectors have been actively seeking a more secure way to share and collaborate internally and with external parties.  It appears that no matter what business you are in or what your businesses processes are, there is always a need to securely share large volumes of information easily and cost effectively.  Email, FAX and courier are not secure enough and continue to be cumbersome and prone to error.

Historically, sharing documents online in virtual data rooms have primarily been used for due diligence in M&A , fund raising, refinancing, and real estate transactions.  Corporations are now recognizing the value of sharing information online to complement or improve document intensive processes, streamlining real world business challenges such as RFPs, Engineering, Procurement and Construction compliance, financial reporting, audits, board communications or simply having an accessible repository of key legal documents.   Documents are often more secure online than stored on in-house computers, flash drives or distributed as attachments using email.  Using Firmex, clients organize and access literally millions of documents in a SAS 70 compliant environment with encryption transmissions, and fully segmented and secure databases with mission critical redundancy, which is often not the same environment that office computer storage provides.