ABA Section of Business Law
July/August 2001 (Volume 10, Number 6)
Database delight
How to use tools to manage that transaction
By Jeffrey G. Wyner
Your phone rings: Your lender client says to redo the note, mortgage and assignment of rents for parcel A. The borrower has just changed its name. You will get the particulars by e-mail in three days. Parcel A is one of three replacement property parcels in a deferred like-kind exchange. The other parcels are not affected. There are two title companies and a qualified intermediary involved. You reach for your yellow pad checklist, but what will you write on it?
In a transaction involving multiple parties, multiple entities or properties, and endless documents, yellow pad checklists, even when augmented with columns, sticky notes and different colored pens, cannot keep up with all the developments, variations and surprises that occur. The linear one-dimensional list breaks down as an organizational tool when it comes to cross-referencing entries and re-sorting or grouping them by different criteria. Tracking the progress and status of a complex transaction, and preparing for closing, require something more than a one-column checklist.
The personal computer, and even the palmtop computer, offer various ways to address the problem. A checklist maintained and updated as a word processing document is an improvement when it comes to searching for things on the list, but this approach does not provide for re-sorting and grouping entries. A spreadsheet works, but only until you try to assign one fact, or item, to many different lists. The answer lies in relational database software.
Database programs are used to maintain, modify, sort and print structured information. The structure of the data is similar to the layout of blanks on an index card. Kernels of information called items (little narratives describing the events or facts being recorded) or categories (re-usable variables that will be searched to retrieve data) are placed into fields, and the fields placed on an index card or record. There are different types of fields: date, number, text (names or words), note or memorandum (free text), yes/no, pop-up list choice, and others. Relational databases offer the ability to associate one item of information with many categories.
Virtual, or computerized, index cards are almost the same as the paper index cards we used in junior high school to collect information for research papers. However, a paper index card can only be placed in one pile, and its place in that pile is lost when the pile is resorted or when the card is put in another pile. The virtual index card can be placed in many piles, all at once. When it is modified, all of its occurrences update, simultaneously. Furthermore, when its fields are searched, the target variable or category will be found in each of the cards in which it appears.
Picture the index card itself, what programmers call a "record." It might look like this:
Item: Borrower's name
Newco, LLC
Who: Borrower's lawyer; lender
Documents: Note; assignment of leases;
Mortgage
Action: Yes/no
Associate: Abe Lincoln
Date due: 8/3/01
With database software, it is possible to create virtual copies of this index card. Indeed, it is possible to do all of the following, all at once:
o Put one virtual copy of this card in the borrower's lawyer pile in case he or she calls.
o Put one virtual copy in the note pile for when you complete the note.
o Put one virtual copy in the mortgage pile for when you complete the mortgage.
o Put one virtual copy in the assignment of leases pile for when you are ready to complete it.
o Put one virtual copy on the action list pile of cards requiring immediate attention.
o Identify the assigned associate so that he or she can retrieve all the cards requiring his or her attention.
These virtual cards - again, "records" - can be printed out on paper or viewed on the monitor.
In addition, the computer will provide you with the following:
o A list of all the cards in the borrower's lawyer pile, for when he or she calls.
o A list of all the cards in the lender pile, for when that call comes.
o A list of all the cards in the note pile for when you sit down to redraft the note.
o A list of all the cards in the mortgage pile for when you sit down to redraft the mortgage.
o A list of all the cards in the assignment of lease pile for when you sit down to redraft it.
o An action list of all the cards in the action list pile of cards requiring immediate attention.
These lists are called reports. They can be printed on paper, printed on index cards, or simply viewed and edited on the computer monitor. The stack of index cards can be sorted or filtered: Sorting by date provides a chronology. Sorting by whether or not "action" is checked results in a "to do" list. Filtering out those cards requiring "action" and sorting the result by deadline date produces a docket-like report.
A suggestion: Before reading on, turn off your computer and make some practice paper index cards. Sort them and group them in ways that might be helpful to you. For example: An item entry that reads "call borrower's counsel and review survey after lender's engineer approves it" would go in all of the following categories: borrower's counsel and lender's engineer available for the "who" field. It would also belong in the documents field in the survey category. It would also belong in the action category. Make up some other cards for some of the categories.
As a transaction moves toward closing, changes occur. Additional parties can become involved. New properties can be added as collateral. Matters requiring additional attention, such as environmental questions, may appear. These affect various documents. They also require attention with various people.
A flexible tracking system should accommodate these changes. It must be possible to add fields to the index card easily and without changing the data already recorded. For example, after receiving a questionable environmental report, a new text item, "Review with environmental specialist," might be added. This would have to appear on all new cards and should also show on all old cards, even if left blank on the old ones. However, it would be necessary to add to the list of people a category, that is, a possible field value, for environmental specialist.
It might also be necessary to add a special issues field, one choice for which could be "environmental." Another choice in the same group might be "appraisal." With such a field, a filter, limiting a virtual stack of cards to those meeting the test special issue = environmental would produce a stack of cards to discuss with the environmental expert, and a field defined as special issue = appraisal would produce a stack of cards to discuss with the appraiser.
Now suppose the environmental problems affect more than one, but less than all of the parcels. It might be helpful to have a field called parcel to use to sort the cards when needing a list of all notes bearing on one particular parcel.
The sample index card might now look like this:
Item: Borrower's name
Newco, LLC
Who: Borrower's lawyer; lender
Documents: Note; assignment of leases;
Mortgage
Action: Yes/no
Associate: Abe Lincoln
Date due: 8/3/01
Parcel: River Branch parce
Special Issues: Environmental; appraisal
Some programs make it easier than others to add fields. Furthermore, some programs make it easier than others to decide exactly where on the record or where on the print-outs the new field will appear. With some programs, it will be necessary to consult the manual to figure out how to add the field; with others, all necessary information will appear on the screen.
Pop-up and point-and-shoot fields speed up the data-entry process. For example, the special issues field might have the following choices: Environmental . . . appraisal . . . encroachments . . . underground tanks. Ideally, the user creates this list, while working through the transaction, without having to call the programmer.
The environmental expert finally calls back! You issue the order: "Computer: Show me all the cards dealing with environmental issues." You check the software manual under retrieval and set a filter to retrieve and display only those cards that have in their "special issues" field the category or variable "environmental." It works! You are ready to talk.
Then the appraiser calls. You issue a similar order to the computer, and set a filter to bring up only those cards in which the "special issues" field contains "appraisal." You are prepared.
Then the client calls and asks your advice on whether the River Branch parcel should be cut out of the deal entirely. You set a filter to bring up only those cards in which "Parcel" equals "River Branch parcel." Your client is impressed!
Choose the database program that is easiest for you to use, not the one with the longest list of features. Practice with it. Don't spend too much time worrying about printed reports. If you are using the program well, paper reports will be out of date by the time the ink dries.
Practice again. When you have developed confidence in your ability to use the program not only to store, but also to retrieve information, and you no longer need to carry the manual home each night, you are there.
Leave your yellow pad checklist in the file, with the carbon paper.
Wyner is a shareholder at Conway Marken Wyner Kurant & Kern Co., LPA,
in Cleveland. His e-mail is jwyner@conwaymarken.com.
