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(Original article was published by The Law Gazette on 30 November 2021)
Keeping our promise to come back with something more on Document Automation,1Serena Lim, “A Beginner’s Guide to Legal Automation” (May 2021), Law Gazette, The Law Society of Singapore (https://lawgazette.com.sg/practice/tech-talk/a-beginners-guide-to-legal-automation/). we now take a closer look at the use of Document Automation or Document Assembly software (used interchangeably) in two practice areas, i.e. Retail Conveyancing and Corporate Mergers & Acquisitions.
Document Automation or Document Assembly is:
“The transformation of frequently used documents and forms into smart templates for swift production of customised documentation.”2“Ministry of Law’s Legal Industry and Technology Roadmap”, (https://www.mlaw.gov.sg/files/news/press-releases/2020/10/Minlaw_Tech_and_innovation_Roadmap_Report.pdf).
In this article, we share insights and experiences from RHTLaw Asia (RHT), Subra TT LLC and Bizibody Technology (Bizibody). The teams have worked with HotDocs, one of the Document Automation solutions pre-approved for government grant funding under the Law Society’s Tech-celerate for Law scheme (Advanced Technology Solution category),3https://lpi.lawsociety.org.sg/tech-celerate-for-law/ which enables the creation of smart templates.
RHT, a leading regional law firm headquartered in Singapore, was seeking a document automation solution with effective outcomes such as (a) reducing time and effort to produce documents; and (b) increasing their quality and consistency. They were keen to build their in‑house capability to develop “smart templates” and also wanted a single strategic document automation solution that provided: (a) the power and flexibility to handle a full range of document assembly and creation tasks, from the shortest letter to the most advanced contracts; and (b) was easily customisable.
RHT chose firstly to tackle commonly-used documents such as NDAs and letters of engagement. They assessed the pre-approved document automation solutions offered under the Tech-celerate for Law scheme and selected HotDocs‑LawCloud because of the depth of its automation capabilities and proven track record.
HotDocs and HotDocs-LawCloud have been successfully used in Singapore retail conveyancing as early as 2003, when the abolition of conveyancing scale fees made legal fees freely negotiable. As a result of the liberalisation of scale fees, several law firms turned to document automation technologies like HotDocs to boost their competitive capabilities.
Bizibody has implemented HotDocs in both on-premise and cloud environments and has used the HotDocs integration Application Programming interfaces (APIs) to create LawCloud, a cloud-based legal case management software with an in-built client-matter structure.
Bizibody’s legal automation consultant Harry Kishen explains: “Document automation can be used to yield efficiencies and improve profitability in high-volume, low-value transactions, as well as to enhance service levels (and improve quality assurance) in more complex corporate and finance transactions.”
The key drivers for the implementation of document automation are:
(i) On Effort: Harry cites the example of conveyancing, a document-heavy area requiring repetitious steps. He feels that document automation is ideal for automating conveyancing as it requires “the same set of information to be keyed into many documents in the same transaction”,4Examples: Particulars of the parties to the transaction, property details, transaction details, financing details, completion account computations. requiring lawyers to monitor and eyeball each document for accuracy given the tedious, repetitive data entry (resulting in avoidable human errors) and copy-paste tasks.
(ii) On Time: Document automation saves document preparers a substantial amount of time looking for the appropriate set of precedents for the transaction involved, copying them, removing the existing particulars from the template letters, and filling in the new information. Sometimes, the work on each matter is performed in almost 90 per cent less time, increasing the relevant department’s productivity exponentially. Harry believes that “The ability to create documents faster and more accurately is key to succeeding in a high-risk area of practice such as conveyancing that is increasingly perceived as a ‘commodity’ service”.
(iii) On Costs: One of the many upsides of document automation technologies is that less skilled and lower‑cost staff can generate documents out of smart templates quickly and accurately. RHT’s Legal Technology Development Manager Stella Chen5Stella Chen is a qualified lawyer from SMU who has previously worked with Law Society in a LegalTech and research role to study trends affecting the legal profession. This positioned Stella as the ideal candidate to work on Document Automation and to develop “smart templates” for RHT Law Asia. shared that using HotDocs has vastly helped lower costs, time and effort to produce complex documents in corporate transactions. This frees up lawyers to focus on higher-value work, reducing the stress and over-work now endemic to many law firms.
For transactional work, accuracy is essential. The most minor errors in a document can have serious implications, and even a careful document preparer/proof‑reader makes errors using manual input or traditional cut-and-paste shortcuts. With document automation tools, content can be consistent and error‑free.
Document Automation forces law firms to standardise everything: terminology, best practices, and overall look and feel of its documents. The document automation templating exercise, whilst time‑consuming, helps a firm to rationalise and consolidate the many template variations into a reusable asset that captures and preserves the substantial knowledge of experienced lawyers and paralegals.
Interestingly, Stella found that the introduction of HotDocs into the everyday routines at RHT promoted teamwork and generated discussions about good drafting practices. The many discussions the drafting team had on selection and drafting of clauses provided material for Stella to conduct department‑wide training on good drafting practices and what to look out for when drafting similar documents or clauses. Stella shared that, “If we didn’t have document automation, I guess there wouldn’t be a catalyst for this kind of discussion [about drafting].” These discussions also created a huge interest in document automation and HotDocs, with many lawyers showing a keen interest in using it.
To generate a new document, document preparation is initiated by the drafter selecting a smart template and answering the questionnaire presented by the smart template – no more manual editing of the closest-match precedent document.
The document automation engine then uses the saved information to assemble a custom version of the document, inserting and formatting variable information, the correct clauses based on transactional conditions, and the correct pronouns and verbs. All of this happens in the cloud, so the document preparer can work remotely.
Document automation tools designed for law firms provide a “matter-centric” user-interface which associates the answers with the matter so that the user may save and re-use the answers in all subsequent documents created for a particular matter.
Law Society 2018 Survey Findings on What Law Firms Expect from Legal Technology6Legal Industry Technology Survey Report (https://lpi.lawsociety.org.sg/legal-industry-technology-study-report)
Document automation offers one of the most impactful bangs for your buck. As a legal technology genre, it ticks all the boxes that law firms expect from technology with a resounding “Yes”. Yet, the uptake of document automation is not commonplace. We asked Stella and Harry about their challenges in implementing document automation technologies and what tips and insights they could share to help others start their document automation journey.
The equation for computing the ROI for document automation is fairly straightforward:
(a) Benefits will be highest for boutique specialist high-volume practices because the frequency of use of each smart template will generally be higher. Also, in conveyancing and other high-volume practice areas, many standard templates are used. These documents are generally easier to automate as the different variations of how the final document will appear is limited to a greater degree and the variables used in the document is repeatedly used across multiple documents in the whole transaction.
(b) The key factors which determine the benefits include:
In relation to conveyancing manpower, Thanuja Thiagarajah,7https://www.linkedin.com/in/thanuja-thiagarajah-537000b0/ Joint MD of Subra TT LLC (STTL), a conveyancing specialist, shared that, “Recruitment of staff, staff training and HR management are constant challenges in a conveyancing practice, especially when the market is bullish. Document automation helps to ameliorate the training issues, increases the staff’s ability to produce a consistently good standard of work and to boost their productivity; this in turn increases job satisfaction and staff retention”.
The key factors in determining time and effort in creating smart templates is the number of documents and document complexity. Refer to the next section to understand more about this.
From a document automation perspective, the complexity of a document depends on the number of automation options and the nature of automation required.
NDAs and employment agreements are easy wins as the automation is mostly a straightforward mail‑merge. Shareholders agreements and share acquisitions are obviously more complex because they contain relatively more logic-dependent (if this, then insert) conditional clause variations which take into account many factors such as number of parties, industry, bargaining power and parties’ expectations.
Sometimes, document complexity is not obvious. A good example of this is the Power of Attorney (POA) in property transactions. POAs are regarded as simple legal documents where one party authorises another party to act on its behalf. When Bizibody agreed to assist STTL with templating POA documents, we received a base set of 64 sample formats and 200 other ancillary documents.
The complexity arose from a combination of conditional clauses relating to:
Bizibody worked with a paralegal and a lawyer from STTL to rationalise and consolidate the 64 POA sample documents into six HotDocs templates, and the 200 ancillary documents into 30 Hotdocs templates. From Thanuja’s perspective, the upfront time and effort was a worthwhile investment:
“The time and effort we spent in converting our POAs into smart templates was well worth it as it gives us the ability to churn out all our POAs and ancillary documents in a fraction of the time, and minimises the attendant QC and rework. In the past, these particular documents were a pain‑point because we would have to dedicate an experienced paralegal to do this work, and it would not have been very cost effective as the fee for a POA is a small sum”.
Another challenge both Stella and Harry have had to deal with is at the mark-up stage of drafting. Before any document is converted into a smart template, it has to be marked up either by the lawyer or the document automation software consultant. At times, the mark-up may be insufficient, leaving gaps that can create uncertainties and resulting in inaccurate template generation. As the end‑users know the documents best, they are in the best position to undertake the mark‑ups and instruct on the variables and the conditional logic. Attention to tiny details, including MS-Word formatting and language consistency, go a long way in minimising unnecessary work.
Harry keeps a log of all documents that he receives for coding. It is a cumbersome process, but he feels it is a vital element of document automation as it allows template developers and coders to collaborate and keep track of the template progress.
Stella views document automation as part of a bigger process. She believes that document automation tools represent an opportunity to improve the quality of agreements in a way that would not be possible in a real transaction with time and budget constraints. Carefully reviewing the quality of precedents one uses as smart templates matters because otherwise, the document automation software would just become a tool to “do mediocre documents faster”. “When I’m doing templates, I really have the chance to go cover to cover on the contract and look at every single word. I make sure that there is no redundancy, because that just creates a potential inconsistency, especially once you bring in the automation.”
As a result, RHT’s document automation process took much longer as the team took the opportunity to review, refine and redraft the document content. Before transforming the documents into smart templates, Stella reviews the plain language of the precedents provided, noting (i) any areas where the language is ambiguous or too wordy; (ii) clauses which are unnecessary or overlap with one another; (iii) areas where precedents differ and the reason they differ is not clear; and (iv) any underlying assumptions the precedents have which would require many consequential changes if the assumption changed. Legal research on the effect of certain language or clauses may be necessary for (i), (ii) and (iii). Stella then discusses these flagged areas with a small team of lawyers to clarify precedent variations, what may appear as discrepancies, and underlying assumptions.
She only proceeds to convert the final “model document” with its logical conditional options into a HotDocs template after the “model document” has been finalised. The HotDocs template is then checked and approved by the people who have HotDocs licences, and made available for use in real transactions.
Stella believes that the RHT management team, and associates in general, are very supportive of document automation. “It’s not maybe just one partner’s pet project, but they are really committed to this and are committed to helping me succeed. So I’m really grateful for that”. She credits the positive response to document automation within her department to the strong support she has received from the management, in their commitment to document automation and promotion of its long-term benefits. For her part, Stella takes the trouble to insert footnotes for users explaining the rationale behind certain steps in the document and also conducts training to summarise all the considerations that have gone into drafting a particular document.
The composition of document automation teams is important.
Harry shared that there should be a document analyst, a domain expert and a smart template creator. Ideally, the document analyst should be someone with a legal background and who is able to edit the smart templates. In his conveyancing automation projects, the tasks are usually assigned as follows:
|Document Analyst||Conveyancing Executive / Paralegal / Professional Support Lawyer||a. Gathers the document|
b. Marks up the variables and the logical content options
c. Quality Control and Testing
|Domain Expert||Practising Lawyer||a. Reviews the marked-up sample precedent document|
b. Modifies the sample precedent document and mark ups
|Smart Template Creator||Outsourced document automation consultant / Paralegal / Lawyer||Converts Word precedent documents into smart templates.|
For RHT, the role of Document Analyst and smart template creation is undertaken by Stella, working collaboratively with a team of domain experts (lawyers in the corporate law department). Stella attended Bizibody’s HotDocs template developer training, and was able to create complex documents on her own after 14 hours of training.
Stella [and Harry] shared that the ideal candidate for this role is someone with an eye for detail (for drafting and coding), immense patience and a high level of critical thinking. Most importantly, he/she enjoys and embraces technology. Excellent language skills and ability to express complex clauses in simple phrases are equally important. Practical knowledge in terms of coding, using Ms‑Word and its features (like macros and styles) are an added advantage. Stella adds that this role requires one to be proactive and independent.
Knowing when to start and when to stop is important. The upfront learning curve and the effort it takes to get templates right is not trite. So probably, the solution is to adopt it sooner rather than later. Stella agrees that “It’s a question of investing that time and effort at the start of the journey so that eventually, things become more simplified and more structured and standardised as you go along”. So start early to get it right!
When asked whether lack of experience as a practising lawyer was a boon or not, Stella felt it was “a bit of both”, agreeing that perhaps two to three years’ experience is useful to feel confident and to understand what the practical implications of clauses could be. But she also thinks that not having practised in this area gives her fresh eyes to review and question contract language regardless of how common it is in the industry. She also remarks that document automation is ultimately a team effort, and that her skills in research and drafting complement her teammates’ practice experience to create a better product. It is obvious that Stella enjoys and excels in her document automation role.
Creating rules‑based templates provides great training in logic, clear thinking, drafting and picking up new domains. Stella’s document automation templating skills adds value to herself and the corporate law department at RHT. In addition, she has picked up skills in drafting corporate documents in a relatively structured and effective way.
Harry’s new skills enable him to add value to and empower process-driven law firms. Through his own experience, he found that a foundational knowledge of the legal documents to be templatised is helpful for all team members as it shortens the time needed to understand the document precedents. He says, “It may be an initial struggle if the terminologies contained within the document sound completely foreign to the smart template creator”.
Our smart document creators – Stella and Harry – have shown why and how with Document Automation, Less is More.
Document automation simplifies complexity, by making the creation of even the most complex documents as straightforward as filling out a form. Once implemented, document automation vastly reduces the time taken to produce even the most complex documents, resulting in a huge reduction in staff time and associated costs.
Document Automation makes the trifecta of faster, better and cheaper, achievable.