I. INTRODUCTION

A. About This Article

This article is designed to introduce you to the concept of document assembly and explain the benefits. Keep in mind that because document assembly programs are powerful, they are also complex. Therefore, the title Abracadabra: Document Creation You Can Really Use is a bit of a misnomer. There's usually nothing "abracadabra" about it until you've finished automating your documents. At that point, producing complex documents really does take seconds. However, getting a set of complex documents automated in the first place is rarely quick and easy. In spite of this, it's worth pursuing simply due to the fact that document assembly is a game-changer for most practices.

If you have the time to create your own document assembly system, then get hands-on training which will significantly increase your learning curve. Be prepared to spend quite a bit of time in class before you start something. For example, you can spend 8 hours in a HotDocs class and only scratch the surface of what is possible with that program. That doesn't mean it's extremely difficult to develop your own system, but you need to have realistic expectations regarding the time commitment necessary to get there.

B. Other Document Assembly Options

There are several available document automation applications and while each has its own unique way of handling the task, they all are very capable and able to achieve the objectives we discuss below. Each of them works with Word or WordPerfect or both. Some provide the ability to automate PDF forms. Because LexisNexis’ HotDocs continues to dominate the market and both of us are most familiar with it we refer to and show examples from HotDocs throughout this article but we could just as easily be referring to any of these applications. It is highly recommended that you explore the various options and decide for yourself which application best meets your practice needs in terms of availability, functionality and cost.

II. HOW DOCUMENT ASSEMBLY CAN HELP YOU

If you're buried in drafting or just wish you could make the process more efficient, document assembly is the solution. In a nutshell, document assembly programs allow you to automate your document production and thereby significantly reduce the amount of time you spend drafting. For example, assume you have a complex document with hundreds of optional paragraphs (such as a complex Revocable Trust). Let's say it presently requires four hours to create one from first to final draft. After automating it, the same document generation should take approximately ten minutes. Even if you're a word processing wizard, it's unlikely that any other tool can save you as much time each day as document assembly software.

III. DOCUMENT ASSEMBLY -ITS RAISON D'ÊTRE

A. How Documents Are Usually Drafted

As you know, lawyers rarely draft new documents entirely from whole cloth. In almost every case, most (if not all) of the "new" document is pulled from existing documents and forms already in the lawyer's possession. The relevant provisions are inserted from existing documents and then certain words (such as the party names from the old documents) are searched for and replaced with words relevant to the document being drafted. This method is often referred to as the cut-and­paste/search-and-replace ("CP/SR") document generation method. It has long been employed by the large majority of lawyers and their staff nationwide. However, it has two significant weaknesses. The first is a high margin for error and the second is a lack of speed. The margin for error arises from the fact that CP/SR is unstructured, relies on memory, assumes the word processor will "catch" all of the items in need of replacement and requires many steps. Memories fail, word processors don't catch everything and more steps create more mistakes and slower drafting. Transcribing voice recordings or hand written notes and cobbling together provisions from other documents makes the process slow.

B. Paradigm Shift

For many years, the legal industry had little incentive nor ability to change the inefficient CP/SR method of drafting. With hourly billing predominant, one who takes a bit longer to get a set of documents together isn't penalized (in fact, they might be rewarded). Furthermore, there were no alternatives from a technological standpoint.

However, the emergence of flat fee billing and other non-hourly methods began creating an incentive to generate documents more quickly. Competition has increased significantly in the legal industry in the last 20 years; and technology has enabled firms to handle much higher volumes than they could in past decades thereby forcing administrative tasks like drafting to become more efficient. The paradigm shift was that lawyers began looking for ways to generate documents in a quicker fashion without sacrificing accuracy. Document assembly technology began to develop in order to help them achieve that objective. Initially, only big firms with deep pockets could afford it. Now anyone can.

C. Advantages:

1. Speed, Speed, Speed:

Imagine a tool that could save you hours each day. If you're buried in drafting and it's a primary stressor in your work load, then a document assembly system is the proverbial magic bullet. If you're in a document intensive area of practice (estate planning, real estate, banking, contracts, employee benefits, etc.), nothing else you can do will have a greater impact on your efficiency than automating your document production. It's one of the few technologies that can literally revolutionize the way you work. However, it takes a serious investment of time to learn it yourself and deploy it into your practice. For most practice areas, it's unquestionably worth the investment. For example, assume you have a complex document with hundreds of optional paragraphs (such as a complex Revocable Trust) which presently requires four hours to create from first to final draft. After converting the document into a HotDocs template, the same document generation should take approximately ten minutes. The time savings are that dramatic.

It should also be noted that document assembly can pay big dividends even with the simplest documents. Let's say, for example, that your firm produces 50 letters a week of various types. They could be anything from a "confirming our initial appointment and here's what you need to bring" letter to a fax cover sheet to a simple "enclosed please find..." letter. If those letters presently take 8 minutes on average to complete, then that’s 6.67 hours per week. Now let's assume they're automated, and the time necessary to complete drops to an average of 1 minute (very realistic). You're now down to .83 hours per week. If you multiply that time savings by $100/hour, that's $584/week, $2,336 per month and $28,032 per year. Regardless of the dollar savings, an extra 5.84 hours per week is nothing to sneeze at.

In fact, the time savings realized with document assembly systems are so significant that they often require a move to flat fee or "value billing" instead of hourly billing. Of course, this doesn’t necessarily mean that users should charge less for services rendered. It simply means that any uncertainty regarding the time necessary to generate the documents has been removed. Therefore, there is no risk in quoting a flat fee (at least for the document generation aspect of the service). The net effect is that fewer resources are consumed to produce better documents and clients are happier because they didn’t have to worry about an unexpectedly high hourly fee.

2. Accuracy

Document assembly systems are much more accurate than CP/SR because they only require the user to enter case-specific facts and the items that change (party names, etc.). The template does the work of including the appropriate paragraphs, excluding the irrelevant ones, verb conjugation, punctuating lists, calculating numbers and dates, correcting personal pronouns and replacing the items in need of replacement. For many people witnessing this method of document generation for the first time, it is nothing short of an epiphany.

Documents generated from document assembly systems are more accurate though much less time is spent generating them; and training time for new employees is reduced since they must only be shown how to answer the questions.

3. Profitability

If you're generating more accurate documents in far less time and consuming far fewer resources in the process, profitability naturally goes up. The return on investment is fast and furious; usually only a few months for most projects. For example, let's assume that an estate planning lawyer and it takes you about 10 hours for the initial meeting and the time necessary to draft an entire set of estate planning documents for the average client. Many transactional lawyers have switched to a flat-fee schedule so let's also assume that you charge a flat fee of $2,000 for the average plan. Dividing that fee by the time it takes you to produce the documents means you're realizing about $200 per hour. However, if you automated your document production, your total time spent could easily drop to 1.5 hours (including the initial meeting). That would raise your effective hourly rate to a whopping $1,333 per hour. Now that's not bad!

Let's take that a step further and look at your cost savings. Assume that your cost of production works out to about $100/hour (salary, benefits, materials consumed, etc.) for the time you used to spend. Therefore, if it was taking you 10 hours, then your cost of production was $1,000. With a drafting system, your cost of production drops to $150, or a savings of $850 per transaction. If you're averaging just 6 new estate planning clients a month, then your monthly savings is $5,100. You can use that figure to determine how much it would make sense to spend on automating your documents. You may have originally thought that a $10,000 price tag for automating was completely out of the ballpark. Now you realize that you'd recoup that investment inside of two months. Since most experts say that project with a payback period of 12 months or less should be implemented, the idea of automating your documents pretty quickly moves from "that's way too expensive" to "when do we get started?"

4. The Ultimate Knowledge Management Tool

Document assembly also allows you to take much of what you and your colleagues collectively know about a practice area and perform a "brain dump" into an expert drafting system. For example, assume you have 5 lawyers in your real estate department and they collaborate to build a drafting system for leases. New associate Jim needs to draft a lease in which your firm represents the landlord of a strip mall and the proposed new tenant is a restaurant business. The drafting system could skillfully guide Jim through the process, making sure that he a) is using the latest and best form your firm has prepared; and b) addresses all issues that should be addressed in a lease of this type (strip mall, food service tenant, your firm is representing the landlord, etc.). Review by the partner takes minutes instead of hours because the first draft was so well done, even by a relative rookie. The drafting system ensures that the firm's collective knowledge is utilized in every deal; even though the documents are generated in much less time than the old CP/SR method.

IV. HOW IT WORKS: BIG PICTURE

Using HotDocs as an example, the program allows users to replace changeable text with variables (i.e., «Testator Name», «Testator Street Address»), make the inclusion of text (words, sentences, paragraphs, etc.) conditional, gather (infinite) lists, and automatically calculate dates, text and numbers. With each new variable, you create a corresponding question (prompt) which is presented to the user during the assembly process. Generating a new document is a simple matter of answering the questions presented by the template during the assembly process. After the questions are answered, the completed document appears on the screen (in Word or WordPerfect), ready edit, save, print, etc. The on-screen interview is quite powerful because the template designer can control everything about the sequence and content of the interview. With practice, you can reproduce your entire decision tree in the template and build in safe-guards that walk even novice users through the assembly.

After a document is assembled, HotDocs allows users to save the answers entered for one document so that they can be used to assemble other documents which use the same information. In this manner, users simultaneously decrease the margin for error while eliminating time wasted on redundant data entry.

For practice areas which typically require the production of several related documents, the entire set of documents can be automated so they share common information and may be generated simultaneously. For example, an estate planning attorney would create a template for each type of document (will, trust, power of attorney, etc.). All types of wills (simple, complex, pour-over, married & single) can be combined into a single Will template and the same can be done with revocable trusts and irrevocable trusts.

V. HOW TO DETERMINE DOCUMENTS SUITABLE FOR AUTOMATION

Draw a graph like the one below and plot your documents. Documents that are plotted in Quadrant I are good ones to start with when learning a document assembly program. You create them frequently, but they're pretty easy. Things like fax cover sheets and enclosed-please-find letters tend to fall within this quadrant. Once you have practice and are a lot better at template development, you can start working on documents plotted in Quadrant II. These are the documents that will really improve your bottom line once they're automated. On the other hand, documents automated in Quadrants III and IV are probably not worth the effort.

VI. TRUE: DOCUMENT ASSEMBLY NOT ALWAYS NECESSARY

In spite of the foregoing, sometimes true document assembly is overkill. For example, if you're only generating documents with simple fill in fields and you don't really need to calculate anything or gather lists or do anything really "fancy," then you can probably get by with the automation tools already present in Word or WordPerfect. Word makes this task a bit more difficult than WordPerfect, but it's a viable alternative for simple, straight­forward tasks.

VII. WHAT ABOUT PDFS?

If you have PDF forms to complete as part of your document assembly initiative, make sure the program you've chosen can fill in the fields in those documents as well. In the perfect world, you could fill out PDF forms as easily as you generate Word or WordPerfect documents.

VIII. CREATING THE MASTER DOCUMENT

When you create a new template, in most cases you'll be basing the template on an existing document you commonly draft. Therefore, it's a good idea to start with a document you feel is the best example of the document for which you're going to create a template. Before creating the template, you'll need to add in all possible optional paragraphs that could occur in that type of document (in the order they could occur) and then "markup" the document. We refer to a document which contains all possible options for a document of that type and which has been marked up as a Master Document.

Click to enlarge.

This concept is best illustrated with an example. Let's say you're going to make a template for a Promissory Note like the one shown in Exhibit 1.

Click to enlarge.

The first step is to identify changeable text. To make them easy to spot when you're automating the template, consider wrapping them with square brackets, and also add notes so you'll know what the options are. For an example, see Exhibit 2.

Click to enlarge.

The next step is to identify optional paragraphs, add in optional paragraphs that aren't included in your base document and state the tests for their inclusion. For an example, see Exhibit 3.

IX. DATABASE INTEGRATION

As you can see, the process for automating document templates is involved but the benefit of even the most basic document automation can have a tremendous impact on your practice. Another great benefit of document automation is that most applications can integrate with your existing ODBC-compliant databases. For example, HotDocs integrates with Outlook, Access and many other common database programs. HotDocs also links with major case/practice management programs such as Amicus Attorney, TimeMatters, Abacus Law, Practice Master, ProLaw and many others. Many of these programs come with included integration features which minimize the effort on your part to make it happen. It is also fairly easy to integrate with your own custom and other out-of-the box databases you may use in your practice.

The most obvious benefit of integration is that you already capture data about clients and matters in your existing practice management software. Using the integration tools and techniques allow you to pass that information along to your automated documents with little effort on your part. In addition, because the data does not need to be reentered the risk of inaccurate or incorrect data is greatly reduced. For example, a classic integration example is taking information entered into the practice management system and automatically generating an engagement letter. Another example is a large firm which does commercial loan work and has created a database which holds all of the pertinent loan information throughout the life of the loan. At any time, with a few mouse clicks, a lawyer will generate any or all (in this case about 30) available documents in a matter of five or six seconds. Before the integration was set up this process could take hours and the loan data was being reentered several times throughout the process.

X. DOCUMENT AUTOMATION ON THE WEB

Many of the document automation programs today provide the ability to deliver automated documents through a web browser. The interview is presented to the user in a web form and the documents are generated on a web server and made available for downloading. There are very few differences in the look and functionality of the interview. Using web technologies greatly enhances the flexibility of deploying automated document templates and customizing how those templates are used in legal practice.

XI. DO IT YOURSELF V. CONSULTANTS

After you've decided you want to implement document automation into your practice, you must decide whether to "do it yourself," hire a document automation consultant or a combination of both. Generally you can save time and money by hiring a consultant. It takes time to become skilled at document automation and your time is valuable to the profitability of your firm. If you bring in a consultant you benefit from the efficiencies and expertise from years of experience in working with firms likes yours. Also with a consultant you will have more predictable and controllable costs, the project will likely be completed more quickly, and the cost will be lower. On the other hand, you know your documents better than anyone else and if you are one who likes to get your hands into technology then automating your documents is a great way to do exactly that. Either way it is important to weigh the costs and benefits of both approaches and decide what works best for you.

About the Authors

Barron K. Henley is an attorney, a "legal technologist" with 15 years of experience and a founding member of Henley March & Unger Consulting, Inc. (“HMU”). Mr. Henley heads HMU's HotDocs document assembly and software training departments; and teaches CLE classes nationally covering document assembly, practice management, document management, server and personal computer issues, remote access, mobile lawyering, scanning and imaging, legal paper reduction strategies, malpractice avoidance, Microsoft Word, Excel and Outlook, WordPerfect, Adobe Acrobat, and many other topics.

Blair Janis is a lawyer and legal technologist at WealthCounsel, LLC where he develops complex estate planning practice systems. He is also adjunct faculty at the J. Rueben Clark Law School (BYU) where he teaches two courses in legal technology and document automation.