The beginners guide to legal document automation

Legal document automation, when used properly, can be a powerful tool to enhance compliance, reduce costs, and save precious time.

With that being said, there’s a right way and a wrong way to do it. Not every legal document can or should be automated. There are also many things to take into consideration before getting started.

In this guide, you’ll get a deep understanding of legal document automation, the benefits, how it works, the challenges, and a few best practices to get started on the right foot. Let’s dive in.

Understanding Legal Document Automation

Legal document automation is the same as standard document automation except that it’s focused on legal documents. Specifically, it’s the process of using technology to streamline the creation, editing, and management of legal documents.

The document automation process typically involves the use of specialized software programs, templates, and workflows to automate repetitive and time-consuming tasks, such as data entry, document formatting, and document review.

Legal document automation is also known as document automation for lawyers to illustrate it’s importance in the legal industry. It has become indispensable as the volume of legal documents has grown and the complexity of legal requirements has increased. By automating legal document processes, law firms, legal departments, and businesses can streamline their workflows, reduce costs, improve accuracy and compliance, and increase productivity.

Benefits of legal document automation

1. Improved efficiency and productivity

A significant increase in productivity benefits everyone and that’s what document automation can provide. By automating routine or repetitive tasks such as data entry or document review, legal professionals can save time and focus on more high-value tasks. Automated workflows and decision trees can help users quickly and easily navigate complex legal requirements, ensuring that documents are created accurately and efficiently.

2. Reduced costs

You reduce costs by eliminating the need for manual document creation and review. This can result in reduced labor costs, as well as reduced errors and rework, which can be costly and time-consuming. Additionally, you remove the indirect costs associated with traditional document management such as storage, stationary, and other aspects.

3. Improved accuracy and compliance

Automated workflows can help ensure that all necessary information is included in a document and that it is consistent with legal standards. This can help reduce the risk of errors, omissions, and non-compliance, which can be costly and potentially damaging to your reputation.

4. Streamlined collaboration and communication

One of the biggest challenges with managing documents – especially paper documents – is versioning. With workflows that are automated, you can be confident that all relevant stakeholders have access to the lasted version of a document. Furthermore, changes and comments are tracked and managed in a centralized system. This can help reduce confusion and ensure that all parties are working from the same document.

5. Improved document management and storage

Finally, legal document automation can help improve document management and storage. By using digital tools to create, manage, and store documents, legal professionals can reduce the need for physical storage space and improve the accessibility and security of documents. Digital document management systems can also help ensure that documents are organized and searchable, making it easier to find and retrieve important information.

Types of legal document automation

1. Document assembly

Document assembly is a type of legal document automation that involves the use of templates and decision trees to guide users through the document creation process. Users can select from a range of pre-designed templates and answer a series of questions to generate a customized document. Document assembly can be used to create a variety of legal documents, including contracts, agreements, and legal pleadings.

2. Contract management

Contract management is another type of legal document automation that involves the use of software tools to manage the creation, negotiation, and storage of contracts. Contract management tools can help ensure that all necessary terms and conditions are included in a contract, and that the contract is compliant with legal requirements. They can also help track contract performance and automate contract renewal and termination processes.

3. Legal research

Legal research is another area where document automation can be useful but is often overlooked. By using automated legal research tools, legal professionals can quickly and easily find relevant case law and legal precedents, reducing the time and effort required for legal research. You can also access your clause library from a central location making it easier to draft new documents.

4. Document review and analysis

Finally, document review and analysis is another area where legal document automation can be useful. By using software tools to analyze documents for errors and omissions, you can save a lot of manual labor. This, in turn, can be channeled into other areas of your business.

How Legal Document Automation Works

While legal document automation can be exciting, it’s not something that you should approach haphazardly. After all, you’ll be creating important documents that can have far-reaching effects.

The process begins with the identification of the types of documents that can be automated. Once identified, the legal team will determine which parts of the document can be automated and which parts require human intervention. The document is then broken down into individual components, such as paragraphs or sections, and each component is analyzed to determine the best automation method.

Below, you’ll find a detailed explanation of each step in the process.

Identifying the legal documents to automate:

Before you can start automating documents, you need to know what documents you’ll be working on. Of course, it sounds obvious, but it’s more than choosing a random document out of your pile. There are multiple factors to consider.

Assess your current document workflows to determine which documents are repetitive, time-consuming, and require minimal customization. This will help you determine the types of documents that would benefit from automation. Examples of documents that can be automated include standard forms, contracts, NDAs, and wills.

In addition to the factors mentioned before, you should also consider the business impact of the document. It may not be used as often as other ones but it has a greater impact on the overall business.

Choosing the right document automation tool:

After identifying the legal documents to automate, the next step is to choose the right document automation tool. Several tools are available in the market, and the choice of tool depends on several factors such as the types of documents to be automated, the level of customization required, the ease of use, and the level of integration with other systems and tools you already use.

There are two main types of document automation tools: cloud-based and on-premise. Cloud-based tools such as DoxFlowy offer several benefits such as easy accessibility, automatic updates, and lower upfront costs, while on-premise tools offer greater control over data security and customizability. Evaluate the pros and cons of each type of tool before making a decision.

Create dynamic templates

One of the best parts about document automation is that the templates aren’t static. Instead, they’re able to react to different inputs and produce different final documents. For example, an NDA for an employee vs an NDA for a business partner.

You’ll want to create dynamic templates for each of the documents you identified in step one. Add the right tags, set up conditional logic, make sure the formatting is correct, and go through multiple rounds of reviews. It’s important to be meticulous here because mistakes can lead to dozens or hundreds of agreements being impacted.

Integrating the automation tool into your workflow:

Now, it’s time to integrate the tools and templates into your current workflows. This involves identifying the various stages of the document workflow, such as drafting, reviewing, and approving, and determining how the automation tool can be used to streamline each stage. For example, the tool could be used to automatically generate document templates or to extract data from existing documents.

Training team members on how to use the tool:

Finally, you’ll want to train relevant team members on how to use the application. If you don’t, there will likely be poor adoption and your previous investments won’t come to much. Providing comprehensive training on the features and functionalities of the tool and how it integrates with existing workflows. A lot of this training may be provided by the vendor you choose.

Additionally, provide ongoing support and guidance to ensure that team members are using the tool correctly and that any issues or problems are addressed promptly.

Training should be provided to all team members who will be using the tool, including lawyers, paralegals, and administrative staff. Keep in mind that it’s not a one-and-done thing. Make regular training available as the tool is updated or as new features are added.

Challenges of Legal Document Automation

Legal document automation has numerous benefits, but it also comes with some challenges that organizations should be aware of before implementing the process. These include but aren’t limited to:

Integration issues

One of the biggest challenges of legal document automation is integrating the automation tool with existing software or systems. Most organizations have multiple software tools to manage their legal documents, such as document management systems, case management systems, and billing systems.

These systems may not be compatible with the automation tool, making integration difficult. Additionally, the automation tool may require significant customization to work with the organization’s existing systems, which can be time-consuming and costly. If the integration is not done correctly, it can cause data loss, errors, and delays in the automation process.

Data privacy and security concerns

Another challenge of legal document automation is ensuring data privacy and security. Legal documents contain sensitive and confidential information that must be protected. If the automation tool is not secure, it can put the organization’s data at risk.

For example, if the automation tool is hosted on a cloud server, there is a risk of a data breach or unauthorized access to the documents. Additionally, the automation tool may require access to other systems or databases that contain confidential information, which can create additional security risks.

In addition to making sure the automation tool adopts security best practices, it’s also important that you apply security practices such as using strong passwords, limiting access to sensitive data, etc.

Resistance to change

Resistance to change is a common challenge when implementing new technology in any organization. Legal document automation requires significant changes to existing processes, which can be met with resistance from employees who are used to doing things manually. Some employees may see the automation tool as a threat to their job security, while others may not be willing to learn new skills or processes. This can lead to a lack of buy-in from employees, which can ultimately impact the success of the automation project.

Take proactive steps when implementing a new document automation system. Firstly, conduct a thorough assessment of your existing systems and processes to identify any integration issues. This can help you choose the right automation tool that is compatible with your existing systems and minimize the need for customization.

Secondly, prioritize data privacy and security when choosing an automation tool. Choose a tool that offers robust security features, such as encryption, access controls, and audit trails, and ensure that it complies with data privacy regulations, such as GDPR or HIPAA.

Finally, invest in employee training and communication to address resistance to change. Clearly communicate the benefits of the automation tool and involve employees in the implementation process to ensure buy-in.

Best Practices for Legal Document Automation

Prioritizing document selection and preparation:

When automating legal documents, prioritize which documents to automate and prepare them effectively. Determine which documents are the most frequently used or time-consuming, and those that require high levels of accuracy. This will help you to choose which documents to automate first. Additionally, you should ensure that the documents you are automating are up to date and in line with current legal requirements.

Regularly reviewing and updating automated documents:

It’s tempting to create the dynamic template once and use it forever. Unfortunately, things are always changing and automated legal documents should be regularly reviewed and updated to ensure that they remain accurate and relevant. This is particularly important if there have been changes in legal requirements or if the document has not been used for some time. Regular reviews help the document remains compliant and effective.

Conducting quality control checks:

Automated legal documents should be subjected to quality control checks at regular intervals. This makes sure they are accurate and free from errors. These checks can be performed by a member of the legal team or an external auditor. The checks should include a review of the content, formatting, and accuracy of the document. Any errors or issues should be addressed and resolved before the document is used.

Ensuring compliance with legal requirements:

This can include compliance with regulations and laws related to data privacy, security, and confidentiality. You should ensure that the document automation tool you choose has the necessary security features and that the automated documents are stored in a secure location.

Other best practices for legal document automation include:

• Establishing clear procedures for document automation and ensuring that all team members are trained on the process
• Maintaining a central repository for all automated documents and that they are easily accessible and searchable
• Using templates and standardized language to maintain consistency across all automated documents
• Conducting regular audits to confirm that the automated documents are being used effectively and efficiently
• Ensuring that there is a clear chain of custody for all automated documents to maintain their authenticity and validity.

By following these best practices, you can be confident that your legal document automation efforts are successful and provide a range of benefits, including increased efficiency, accuracy, and compliance with legal requirements.

Conclusion

Legal document automation, if used correctly, can be a powerful tool in your fight for cost savings, time savings, and efficiency. With that being said, there are many moving pieces that you should be aware of and take action on.

This guide has covered the major steps, the challenges, the benefits, and even the best practices of legal document automation. Now, it’s up to you to put what you’ve learned into action.

If you’re looking for a powerful tool that can help you make the most of legal document automation then be sure to check out DoxFlowy.