Legal document automation: What it is and how it helps

As rewarding as the legal profession can be, it also has some drawbacks — one is the inordinate amount of time you spend doing paperwork. Drafting contracts, retainer agreements, settlement statements, and other routine legal documents can be tedious, repetitive, and time-consuming.

But technology is helping to change that.

Legal document automation software is increasingly becoming a necessity for law firms. It saves time by automatically generating commonly used documents. These products range from simple form-fill products to complex computable documents tailored to the needs of solo practitioners, “BigLaw” firms, and everyone in between.

In this article, we explain legal document automation and how it can benefit your legal practice.

What is legal document automation?

To draft a new version of a standard document, you traditionally start with an existing document — one that’s similar to the one you want to create. Then, using “find and replace” in your word processing program, you change all the instances of variable text, such as names and other details. Not only does this process take time, but it also creates multiple opportunities for mistakes.

Legal document automation tools change all that by introducing a more efficient way to draft new documents.

“At a high level, document automation is the process of standardizing frequently used documents and then setting them up so that they can be automatically generated whenever they’re needed,” says Alex Melehy, founder and CEO of Woodpecker, a leading Microsoft Word-enabled document automation solution for solo and small law firms.

Using document automation software, firms create templates from their frequently used documents, such as intake forms, retainer agreements, pleadings, and more. (Some products include templates to get you started.) Once you create the templates, your software will do the rest by automatically populating new documents. Depending on the software, this data may be pulled from other systems, or you may input the data via a guided questionnaire.

Document automation works the same for document production at any scale. “Document automation could be used for a single document, like an NDA or a contract, that can be generated in 30 seconds instead of several hours if you were to do it manually. Or it can be used to generate an entire packet of documents, such as a mortgage packet or set of trust and estate documents, in five minutes instead of eight to 10 hours,” Melehy says.

Legal document automation is most useful for transactional documents, where you modify standard contract formats to fit the details of a particular use case.

Melehy explains, “Document automation is most used for things like trusts and estates, corporate formation, general corporate law, litigation, personal injury, even family law. It can be used for anything from filling a court form to generating a trust and estate packet for a new client. It’s perfect for the situations where documents are pretty boilerplate and the minority of information is changing in each iteration.”

When it comes to legal areas that require more custom drafting, document automation is less helpful. “It doesn’t lend itself nicely to fields like intellectual property law, where everything is very custom each time and there isn’t a lot of standardization,” says Melehy.

Benefits of legal document automation

Firms willing to adopt new technology reap numerous benefits, which tend to give their organizations a competitive advantage in the long term. Here are some of the ways your firm can benefit from document automation.

Save time. Document automation can dramatically minimize the time you or your team spends drafting documents. In fact, some lawyers report that using automation to generate documents results in time savings of up to 82 percent. This frees up your highly trained (and highly paid) lawyers to work on more complex — and more valuable — legal issues and sign new clients.

Avoid errors. Human error is unavoidable when manually drafting documents. According to a Thomson Reuters study, 90 percent of attorneys reported a reduction of citation and copy mistakes when using legal document software.

Earn more with fixed-fee services. The legal industry is moving away from the billable hour. According to Melehy, “Clients are increasingly demanding greater transparency in the work they’re paying for. What document automation allows firms to do is take work that would have been billable-hour based and turn it into flat-rate work. This allows them to move the industry into the future and ultimately make more money over time.”

Improve your client experience. Document automation shortens turnaround time and minimizes mistakes in documentation, both of which will positively impact your client experience. And because your lawyers will be spending more time advising and researching rather than generating documents, you can offer clients more for their money.

Retain firm knowledge. “One of the major advantages is the dissemination of knowledge,” says Melehy. “No longer will there be only one person in the organization who knows how to assemble a document for a given jurisdiction or client because institutional knowledge is baked into the documents themselves.”

The legal field is already adopting document automation more widely. New solutions are making it easier than ever for firms to automate their document generation, integrate their document workflows, and move their practices into the 21st century.

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