Low-Tech, Low-Cost Document Automation Systems

What's the best way to manage and retrieve documents? Try this three-level approach to workable knowledge management systems.

Work product retrieval has always been the Holy Grail of legal drafting. What's the best way to manage and retrieve documents? Try this three-level approach to finding a workable knowledge management system.

Knowledge may be experience. But for legal professionals, that experience is manifested mostly in words. That makes legal knowledge management the art of managing your documents. Work product retrieval has always been the Holy Grail of legal drafting. "I know I've done a deal like this," says the harried lawyer, rifling through her files. "Anyone else around here done this kind of deal? If only there were a system where I could find all thedocuments this firm has ever done for a transaction just like this one."

There are such enterprisewide work product retrieval systems, but most are only marginally successful. The reason is pretty simple: Full-text search mechanisms often fail because the salient feature of a document may not be reflected in searchable "magic words." Worse, the legal significance of a document may be the absence of a provision, not its presence-such as a lease without sublease rights.

This means the only really useful work product retrieval systems are those where the stored documents have been summarized and categorized for their substantive significance. That requires that everyone-even those who don't believe in the effort-participate, taking nonclient time to aid unknown future beneficiaries. That doesn't happen.

But all is not lost. By keeping your objectives modest and your focus narrow, there are systems that not only can help you find the last document but can make it easy to produce the next one. All are based on proven, relatively inexpensive technologies you may already have. The basic tools of legal drafting - word processing, document management and text assembly - have changed very little over the last decade. Most of the refinements have been directed at markets with high graphical requirements. Even the Internet explosion seems destined to leave the art of legal drafting largely untouched. Word processing may prove to be the last of the great desktop applications.

So why isn't document automation as pervasive as word processing itself? Mostly because it's hard to know when to stop. The available tools support limitless customization. This makes them bottomless receptacles for time and money. Since those of us who build and maintain such systems are attracted to these more complex applications, some very low-tech, cost-effective solutions have been overlooked. The art is to find the solution that meets your objectives, then quit when you've achieved it, remembering that the goal is professional efficiency.

A Three-Level Search for the Perfect Solution

Document automation is a continuum that starts with sample documents and ends with fully integrated compliance systems. Wherever you find your practice on the continuum, the goal is to establish and maintain your solution as the sole repository for all text-based knowledge within your target scope.

Level I: Institutionalizing the Art of Creative Plagiarization

Finding and editing the last, most similar document may not seem like a "system." If it's properly organized and executed, though, you may be able to end your solution search right there. To make this simplest of approaches work, there are three things you'll need to do:

1. Keep all useful documents and clauses (even those obtained from other sources) in a single, electronic format accessible to all professionals in your practice group.

2. Categorize those models within your practice area.

3. Stick to it!

The first of these requirements is, oddly, the most difficult to achieve. Studies have proven we now generate more paper, not less, than we did before word processing. The paperless law office is a dream gone bust, no longer held out as a realistic vision. Despite the recent trend toward transmitting documents by e-mail rather than by fax or courier, a printed document is still easier to browse, review and annotate than its electronic equivalent. Paper remains the absolute standard of execution and enforceability. But when it comes to document management, the tradition of a paper-based form bank or filing system simply doesn't fill the bill.

The greatest challenge is tracking models you obtain externally. Your best sources may come from opposing counsel or from public documents - on paper or in a variety of electronic formats other than the one you use. In some practices, this time-honored form of larceny is not only sanctioned but preferred; the lawyer who drafts his or her own risk factor when an SEC-approved prospectus contains a perfect model is doing the client a disservice. To make these drafting gems useful as future examples, however, you need to capture them in your word processor when you first see them. If you receive a document electronically but in a different format from the one you use, your word processor probably can convert it. When you find something useful on the Internet or in a commercial text service, cut and paste the applicable text. If you have only hard copy, scan it or have it retyped. Beyond spelling errors, don't spend any time cleaning it up. The goal is to preserve its legal value, not its formatting.

The second requirement - categorizing the models in your system - is not as daunting as it sounds, so long as you keep your objectives modest. It may be as simple as a consistent naming convention for your files and folders ("Leases/Commercial/Sublease Provisions"). Most word processors contain summary functions that help users capture basic objective information (author, creation date, etc.) and write a brief description of the document. You can raise the ante - and the potential utility - by using a third-party document management system.

Whatever your approach, limit your scope to your specific practice area and the professionals within your practice group. Rarely will you obtain much help beyond 20 or so professionals. Even more rarely will those outside your practice group contribute usefully.

The final requirement - maintaining your solution over time - is where most document management systems break down. Consistency may be the hobgoblin of small minds, but its value in this context cannot be overrated. A solution that is perceived as incomplete or out of date can be worse than none at all. With a tight focus, the practitioners within the practice group will see quickly the value of your system and will become willing participants in the process.

Level II: The Template Approach

If your practice focuses on generating variations on the same or related documents, you may want to step up to a solution that actually assembles documents customized to your transaction. In its simplest expression, these systems collect the objective facts (names, dates, etc.) once for all uses and allow you to select the clauses you want included. The more elaborate templates reduce the process to a logical dialog of options and alternatives (each question driven by the choices you already have made) and produce high-level, syntactically correct drafts. All this can be achieved without leaving your word processor.

Like basic document management functions, the mechanisms for this approach already exist in most word processing applications. You can create templates with variables to create a document. All this works well for the traditional "mail merge" application (creating form letters customized to the recipient), but you'll quickly outgrow the native word processor functionality in a legal document system. Happily, there are third-party products that install directly into your word processing application and greatly increase the template functionality, notably HotDocs from Capsoft Development (www.capsoft.com), which contains a very clever module for producing graphical forms as well as documents.

The concept and implementation are surprisingly simple. Starting with an aggregate document that contains all the documents and clauses you might want for a transaction set, you highlight the client-specific facts and convert them to named variables, which then are replaced throughout the file. Optional and alternative clauses are reduced to selections or multiple-choice questions, and derivative text (e.g., "he" or "she" for the client's gender) are added as computations in the appropriate places. Even with a relatively complicated root document, a first cut at automation rarely takes an expert more than a few hours, and there's nothing quite so satisfying as seeing a document assemble as you provide the transaction-specific facts.

Indeed, the ease of beginning a template solution belies the underlying substantive sophistication of the task. Template solutions are only as good as the legal work that goes into them. The biggest risk is working off a single, client-specific document set rather than conceiving of the transaction in generic terms. The best systems start with master forms that reflect all the likely variables, options and alternatives collected from multiple documents and sources.

Again, restraint is the key to success. A template solution can be nothing more than a clause selection system - a place to organize and collect useful paragraphs and present them as choices to the drafter. Remember that the objective is to trigger the legal possibilities and create an advanced draft, elevating the process to the level of legal concepts and facts rather than characters and punctuation. The first cut need not be ready for filing or execution.

Level III: The Full Monty

For some practices, the sophistication of the documents within a clearly defined scope justifies a fully customized and integrated solution. In these cases, all the drafting knowledge, analyses and text are reflected in a proprietary system. The documents are only the result.

This approach is most easily described by case study. One Fortune 100 company has several hundred lawyers in its legal departments, but a group of six lawyers and three legal assistants has sole responsibility for documenting particular loans it makes to its distributors. The group completes more than 1,000 transactions each year. Each loan requires a dozen or so documents, averaging 10 pages each. Like many corporate legal departments, administrative assistance is limited and the legal professionals are responsible for their own drafting. Technology is their professional leverage.

While all the documents are generated centrally, each has to meet state requirements where the loan is being made. These still vary greatly - particularly where the loan is secured by real estate. In most cases, the documents are reviewed by local counsel, whose substantive comments are reflected back in the system for the next transaction in that state. Stylistic comments from counsel generally are ignored, since the objective is to maintain consistency in the documents, except where variation is legally necessary.

The data collection process is remarkably straightforward; the system may be making hundreds of decisions based on a single fact, such as the state where the underlying property is located. All the resulting documents ultimately are created in a word processor. They are reviewed and edited to reflect negotiated terms. But any issue-even formatting and syntax-determinable from the facts provided is corrected in the underlying system. If the loan is later amended or renewed, the updated documents are generated from the original data set.

Systems like this are expensive to create and maintain. But the return on their investment is equally high in a volume-driven practice, reducing the professional time required to document a transaction by more than half. Moreover, the users are utterly devoted to the system because it enhances their professional role-negotiation and resolution-while streamlining the mechanics of their practices.

You Built It - Now Exploit It

Many promising attempts at document automation have died for want of promotion. Even if you establish a solution for your practice group, you need to "market" its virtues to your colleagues and - most importantly - to your clients, the real beneficiaries of the effort. Show it to them, charge them for it ... or let them know how much they're saving by your not charging them!

In some cases, the system itself may be the client deliverable. A commercial client may not be able to justify the cost of having you document its most repetitive transactions. But paying you to design and maintain a system that reflects your knowledge and experience may be the best investment it can make.

One emerging technology is worth watching. With rare exception, your client is in the best position to provide the objective facts for a drafting engagement and resents the time and expense of conveying those facts to you. Future document automation tools will let your clients input and transmit that information over proprietary intranets. You then make the appropriate legal decisions and generate the documents, which then can be sent for review over the same site. Perhaps legal drafting is changing, after all.

ACTION ITEMS

Are You Ready? Is Your Practice a Candidate for Document Automation?

Whatever its intended scope, your practice must have certain attributes to justify the effort and expense of automation. Among the scoring factors to consider:

Complexity

Even the simplest document management system presumes that drafting each document de novo - either by dictation or at a keyboard - is out of the question. If your objectives advance into the realm of automated assembly, the underlying task must be either vertically complex (depth of coverage in a single document or form set) or horizontally complex (breadth of applicable jurisdictions or related documentation).

Recurring need

No matter how complex, the target task must arise frequently in your practice group, to justify the effort required to create and maintain a systematic solution.

Quality assurance

Practices where error is potentially costly and the value of consistency is high are natural candidates. Systematizing those practices also can improve the quality of the work produced by newer professionals.

Distributed use

Compliance functions distributed to the field are potential candidates, ensuring that the final product meets the standards of the legal professionals ultimately responsible for its validity.

Team commitment

Automated solutions work best when all the potential users are committed to the system as the central repository for their drafting functions, and when the professionals managing the effort are fully empowered by the team to make the critical decisions.

Cost-savings potential

However elegant and efficient a systematic solution might be, only those that are cost justified can remain viable over the long term. The best systems can save significant professional and administrative costs, returning their investment many times over.