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Document assembly – time to get automated ?

Regular Orange Rag contributor Joanna Goodman reports on the latest developments on the document assembly scene…

In his book The End of Lawyers? Professor Richard Susskind identifies automated document assembly as a “disruptive legal technology” that saves lawyers’ time – and clients’ money. But this is nothing new. Document assembly tools have been popular with magic circle law firms for decades – Allan & Overy and Linklaters were among the first to develop their own systems; many large firms now use one of the industry standard offerings, which include HotDocs, Exari and Business Integrity.

Automated document assembly tools have become a mainstream client facing resource for volume firms. For example, Epoq’s DirectLaw enables clients to complete an online questionnaire to create a first draft of standard legal documents that a lawyer can then review and amend. Rapidocs is a similar tool that automates in-house document drafting.

The efficiencies produced by automating the initial stages of document assembly also benefit transactions, disputes and other commercial cases. Firms that routinely produce large volumes of standard documents, or large documents that include standard features, use stand-alone document assembly tools that incorporate the equivalent of a document production ‘wizard’ or dynamic form which asks a series of questions that the lawyer then has to answer to incorporate the relevant clauses or phrases from other documents in the firm’s document management system into the first draft of the new document.

How it works…
HotDocs stand-alone document assembly product is accessed via software installed on the user’s PC or via the firm’s intranet.  The document automation process takes the form of an intelligent ‘interview’ or series of questions. The responses are used to create a Word document which is then saved to the firm’s document management system.

…in practice
According to Rachel Wood, Head of Knowledge Management at McGrigors, HotDocs supports consistency and compliance, thereby helping clients to avoid litigation. For example, employment lawyers use HotDocs to create basic compromise agreements. “Compromise agreements are ideal for automated document assembly because they have a finite number of variations,” explains Wood. As well as speeding up the process, the document assembly ‘wizard’ mitigates risk by clarifying the type of contract required and ensuring all necessary clauses are included. Getting the details right reduces the risk of litigation and protects the client’s position in the event of a dispute. “Compromise agreements can be complex, are subject to regulation and there is a high risk of litigation if we or our clients get them wrong,” explains Wood.

Another template automates the production of share purchase agreements. Unlike compromise agreements, these are long documents running into hundreds of pages. McGrigors has seven internal precedents and the document automation process shows the lawyer which precedent to apply.

The end result is a Word document which lawyers can then tailor to the case they are working on. McGrigors has developed an add-on application to create an internal library of completed documents that can be accessed by fee-earners working on similar projects.

The challenge lies in creating the initial templates and questionnaires, which also include built-in guidance. This helps to minimise risk, but requires input from lawyers and IT. Another challenge is to keep it brief, but comprehensive. “The idea is to save time, so it is important not to include too many questions,” says Wood.

Automated document assembly can also be used to create standard letters of engagement and supplier agreements – the templates, which are accessed via the firm’s intranet, allow business support professionals to see immediately which contracts apply to particular arrangements.

The client perspective
McGrigors has an agreement with HotDocs to licence the compromise agreement template to clients’ legal departments so that they can create their own standard documents.

Charles Drayson, director at Drayson Law, first used automated document assembly when he became general counsel for a large HR services provider. “I needed something that would allow me to crunch through hundreds of contracts without using lawyers to do all the work. The contracts were not simple – they had to be tailored to complex business-critical services. The results were better than I imagined – within a year, we didn’t have to spend any of our legal budget on commercial contracts. That was a quick win in itself, but the biggest impact was having a usable system for ensuring that contracts were up to scratch even with no lawyer involved in the process. Lawyer time was reserved to a minority of agreements which required individual attention.”

Documents in the cloud
Exari offers a similar document assembly tool accessed via a web browser. According to founder Jamie Wodetzki, this offers more flexibility and makes the set-up process quicker and easier. Like HotDocs, Exari requires minimal user training, and once the templates have been set up, “best practices and negotiated clauses can be automatically incorporated into documents to improve standards and compliance”. Wodetzki highlights the benefit of producing documents with a consistent look and feel and proper styling and numbering.

Template management
Templates support brand consistency, producing letters and documents that conform to a standard format and are free from inconsistencies and cut-and-paste errors. Document assembly and other template management tools enable business support professionals to change standard information such as letterheads, partner lists and disclaimers unilaterally across the firm. Template management modules are offered as part of practice management systems such as Pilgrim’s LawSoft and as stand-alone products such as Tikit’s Template Management System which is accessed via Word and integrates with popular document management systems.

Although template management products are straightforward to use, Wood observes that they require more IT support – the release of more iterations of Word – whereas specific document assembly products such as HotDocs and Exari allow lawyers and business support professionals to produce and amend standard documents without involving ITIL processes.

One step beyond
Lexis Smart is a SaaS solution that requires no input from lawyers or IT support. It combines Business Integrity document assembly technology with Lexis PSL content and interactive forms. Whereas larger firms tend to automate their own content and precedent, Lexis Smart includes some 150 precedents across nine practice areas as well as some 1700 agency forms, so is aimed at smaller firms or start-ups that do not have a collection of precedents or employ people to keep them up to date. Whereas stand-alone or add-on solutions require lawyer and developer time to set up the initial templates, Lexis Smart provides instant access to automated updated content. Subscribers log into the service which is hosted in a private cloud and create documents which are stored online and can then be edited and reused.

An annual subscription to Lexis Smart gives smaller firms access to resources that they could not afford to buy or maintain if they were looking at a point solution. However, in common with other cloud solutions, those resources are not tailored to the specific requirements of the firm or its clients.

Outsourcing is another way for firms and in-house legal departments to avoid the time consuming element of document assembly while utilising their own unique processes and precedents. For example, LexisNexis offers larger firms a bespoke content automation and maintenance service.

Overcoming the cultural challenge
Wodetzki explains that automated document assembly enables lawyers to delegate straightforward tasks to support staff and focus on the more complex elements of a case – as advocated by Susskind. “When an assistant answers a question in a way that suggests additional complexity or risk, that can trigger a workflow where the task is reassigned to a lawyer.  If there are no deviations from approved standards, junior/support staff can complete the entire document.”

Some firms need to overcome the cultural challenges of Susskind’s task-driven approach. As Drayson observes, lawyers can be their own worst enemy when it comes to automated document assembly, failing to see its role in building synergies between a firm and its clients. “Some lawyers think that their work is too bespoke and complex [to become part of a process] and that is preventing them from providing services which have a deeper impact on the way a company does business. In contrast, clients value tools which produce consistent but tailored output.”

Drayson and Wood agree that automated document assembly has its limitations: you cannot automate everything and it’s important not to over-engineer the process. However, automating standard and routine aspects of document assembly saves time and supports efficiency and risk management, allowing lawyers to concentrate on the qualities that really differentiate them from the competition.