There are countless ways to improve efficiencies in a law firm. Splitting tasks into more manageable chunks, batching communications, using digital tools for managing your practice, and more.
One of the most impactful things that can be done is to adopt document automation for the documents you use regularly. This frees up countless hours to focus on more complex tasks or even find new clients.
In this guide, we’ll look at what law firm document automation is, the benefits it brings, and some things to consider before you implement it in your practice.
What is legal document automation?
Legal document automation is similar to standard document automation. The major difference is often the complexity and scope of the documents that are automated.
Document automation is the process of using technology to perform part or all of the steps in the document creation process. This includes collecting data, preparing the document, and often sending it to the recipients without additional manual intervention.
The process of document automation is dependent on specific rules and dynamic templates that are set up beforehand. From there, data can be collected from various sources and used to fill in the dynamic template to create a unique document.
The impacts of document automation can be felt in every business but this is often amplified for attorneys because of the volume of paperwork they have to deal with. Let’s look at some of the major benefits any law firm can gain after implementing document automation.
Benefits of law firm document automation
Note that as you’re going through this list, there are many more benefits to be had. The ones listed below are some of the most common ones but you’re likely to find many more.
1. Faster contract turnaround time
Contracts and other types of documents like client onboarding forms and routine paperwork can be sped up and optimized by using document automation software.
This becomes especially useful when you process many documents in your firm that may not be considered part of your direct billables.
To put the time savings into perspective, if under normal circumstances it takes two or three hours to update or draft a medium-complexity document, that time can be cut down to just 15 minutes using document automation software.
The additional time saved can be used in other areas of your practice such as getting new customers or better serving the ones that exist.
2. Reduce liability
Despite everyone’s best efforts, liability is often increased due to the nature of contracts or the way they were prepared. For example, if a clause is added that’s ambiguous, it can be interpreted in many ways by the signatories.
If at any point in the future, these contracts end up in a court of competent jurisdiction, it may be left for the judge or a jury to interpret them to the best of their abilities.
With document automation, you prepare a dynamic template with clauses that have already been approved. You can pull from a clause library directly within the application (which contains your unique clauses) or have a trusted attorney in the firm create the clauses.
That way, anyone can create a compliant and high-quality document without multiple rounds of editing and adjustments.
3. More visibility into document information
The chain of custody for paper documents is notoriously opaque. On a high level, you may know a few of the people that interacted with it like the signatories and the preparers, but there’s almost no way to figure out everyone that may have seen and otherwise held onto the document.
With document automation software, you know exactly who had a role to play in each step of the document’s lifecycle right down to final storage.
Additionally, you can get important statistics about which type of agreements were created, how often they were made, the most important clauses within those agreements, and more.
This can inform the kind of clients that receive the most value from your services and, by extension, help narrow down the focus of your firm to produce better results for every client.
4. Reduced human errors
On average, for complex documents and spreadsheets, the chance for error is 100%. What that means is that you will have an error. Most likely there will be multiple errors in any document. Even with multiple rounds of edits, an error will surface every now and then.
According to the 1-10-100 rule of data entry, at every stage of quality control an error slips through, the costs to rectify multiply tenfold.
For example, a batch of 100 documents has 20 errors. If these errors are found during the first stage of editing and proofreading, it would cost a total of $20 to rectify. If they slip through and are caught at the batch processing stage, it would then cost 10X more or $200 to rectify. If those errors aren’t rectified and still move on to the end user, it could cost $2,000 to rectify at that point (if they’re caught at all). If they’re still not rectified and are caught after the fact, it could cost tens of thousands of dollars to solve the problems that crop up.
When you implement document automation, you’ll create a few key documents to serve as dynamic templates. These documents can be rigorously screened and edited to make sure no errors slip through.
Because of this, all you have to worry about is collecting accurate information to create the document. Inserting the right clauses is taken care of through conditional logic, formatting has already been handled by the initial dynamic template.
Together, these factors ensure that human errors are reduced to almost zero.
5. Serve more clients
Because you can create routine legal documents more quickly, you’ll be able to serve more clients as a whole and spread the reputation of your law firm.
It may seem counterintuitive because you’re likely deriving the bulk of your income from your billable hours. With document automation, you’re able to open up another revenue stream. The volume of clients makes up for the billable hours that may be lost.
For example, a standard document like an NDA created using your firm’s clauses is more valuable than a generic legal template. You can charge a flat rate for simple documents like that and be able to create them quickly and efficiently.
It’s similar to a standalone product that your firm offers instead of a service. You provide a better experience for your clients and they’re more likely to refer you. Over time, the volume you can produce through this method can form a material revenue channel for your firm.
6. Ability to focus on more important tasks
Because less time is spent on routine document preparation and data entry, more people in your law firm have time to pursue high-level tasks. These could range from meeting with new clients, better serving existing clients, preparing for cases, or one thousand other things.
The bottom line is that you have the ability to focus on the things that grow your firm instead of being bogged down with routine tasks.
With that being said, it’s important to properly measure the impact of document automation and allocate resources accordingly. If you don’t know how much time you’re saving then you don’t know how much time and resources you can allocate to other places. Make sure you put systems in place to take advantage of the benefits you receive.
What to consider before automating documents
As we’ve illustrated, document automation comes with many benefits. But before you can take advantage of them, you’ll need to properly set up your document automation programs. It can be easy or difficult depending on how well you’ve prepared yourself.
There are a few things that need to be taken care of before you can ever create a successful document automation program which includes:
- Identifying the most important documents to be automated
It’s not possible or advisable to attempt to automate all of your documents at once. Instead, you should do them in batches.
But how do you decide which ones should go first?
Think about its impact on your organization. How much would this help you achieve your goal? Once you have that information, the rest is much easier.
- Clear process documentation
If there are no defined processes, it becomes much more difficult to create a document automation workflow. That’s because the document workflow needs to follow the same steps every time. IF the steps are variable, it’s nearly impossible to automate.
Focus on standardizing the processes for the documents you identified in the previous step. That way, you’ll be able to quickly create dynamic templates and produce a consistent final document. Generally speaking, your workflow should incorporate elements of the document lifecycle.
- The initial investment in training staff
Also remember that even though there are a lot of benefits to be had, there is an upfront investment that needs to be made to train staff. Depending on your staff and the software you choose, this could be a few days or a few weeks.
While we can’t tell you exactly how long it’ll take to get a few competent document automation engineers, prepare training time and a budget for it.
Conclusion
Document automation has many benefits for attorneys and law firms. With that being said, there are some things that need to be taken care of to get the most out of it.
This guide has touched on both areas so you should have a better understanding of what document automation can and cannot do for your practice.
If you’re looking for a document automation solution, be sure to check out UsefulPDF document automation software – UsefulDocs.
