Home > XtractEdge > Blogs > Legal document automation: An intelligent solution to boost the efficiency of legal firms
Paper-intensive legal firms are still heavily reliant on physical documents used for writing contracts and agreements on a daily basis. Did you know that the legal team of a typical fortune 500 company manages 20,000 to 40,000 active contracts at any given time? Handling documents in such high volumes is by itself a cumbersome task. Moreover, 90% of legal professionals admit facing challenges when locating contracts, which is exacerbated by the fact that 49% of legal firms lack a defined document management process. And as many as 42% of respondents in a survey on contract review workloads said that slow contract turnaround time is a lingering concern.
Needless to say, legal document automation is the only bet for lawyers and enterprises, especially when 70-80% of typical business operations depend upon data contained in contracts and other legal documents.
Did you know that large organizations’ contracting and legal teams manage 19,000 contracts annually? And legal documents come in various types, namely:
Legal terms are hard to comprehend, and when complexity and volume are thrown into the mix, the task becomes more arduous. Managing legal documents and contracts is time and labor-intensive, wherein dedicating an entire team of legal experts, advisors, and other personnel adds to the operational costs for the company.
Given the complexity of the task, it is surprising to see that 99% of organizations still lack the technology needed to improve the contracting process. That being said, many legal firms and big corporates are gradually implementing transformational changes. With new-age tech-enabled solutions penetrating enterprises at every level of operations, it won’t be long before legal document automation becomes an integral part.
Transparency: Today, customer experience is a key differentiator in business competition, and the legal industry is no exception. Legal customers expect the same level of transparency from lawyers as they get from other organizations. Transparency in documentation and communication is often hard to comply with for multiple reasons. The safety and security of confidential information is one such concern. Secondly, of course, legal terms are incomprehensible to non-legal clients. A discreet view of terms and clauses can never be guaranteed by sharing paper documents with clients. Any information leakage can result in reputational damage for legal firms.
Legal document automation software allows a discreet view of selected sections, with annotations of important points for better understanding and improves the client-attorney relationship.
Multiple repositories: Documents are spread across multiple repositories, which often leads to lost files, missed deadlines, and loss of valuable time retracting them. Hence, a unified repository for document storage is essential to boost the efficiency of law firms, which an intelligent document management solution can easily provide.
Heavily reliant on emails: Sharing documents as email attachments usually leads to information silos, creating a disorganized and incomplete document record. Worse of all, files are transmitted without proper encryption. Other human errors like sharing emails to unauthorized addresses or pressing the ‘reply all’ button increase the chances of data leakage. A comprehensive legal document automation software provides add-on features that allow adding emails into the right digital case file, where only authorized team members can view or refer to it.
Unsearchable content: Legal firms have vast volumes of content lost in paper-heavy documents that are entirely unsearchable, leading to a massive waste of time, effort and being prone to risks. Digitizing all incoming documents with a fully searchable index allows respective parties to find any information on any page without wasting a second or two.
Data leaks: Data leakage is one lurking danger that deters legal firms from taking the leap of faith to automation and digital transformation. However, manual or legacy processes are more vulnerable to data damage or loss, violating the attorney-client privilege. In addition, insufficient redaction, cybersecurity thefts like phishing scams, hacked email accounts, and ransomware attacks can seriously jeopardize the reputation of legal practitioners. A technology-informed workplace and robust, secure document automation software infrastructure is vital to protecting legal firms from this lingering danger.
Automation can improve every business process, regardless of complexity or existing silos, easily streamlining the document management process for legal firms. Documents work like the human nervous system. Businesses and legal firms can effectively achieve process efficiency and scale growth if the time and labor-intensive factors are taken out of the system. Legal document automation makes the management process flexible, organized, efficient, and consistent. Documents are correctly tagged and categorized to allow for easy data extraction as and when needed. These files are stored in a secured, centralized repository for easy accessibility of information.
Legal document automation leverages AI-enabled capabilities to manage legal documents on a large scale. It provides automated templates to generate legal documents like contracts instantly. The sole objective of such an advanced software solution is to take human error out of the process and reduces the time and effort involved in manual document processing. It is a tedious process to manually review a legal document and identify and replace different areas that need editing because clauses or the number of parties change case by case.
The solution helps produce the first draft of legal papers rapidly and accurately, wherein expert knowledge is captured and reused throughout. Also, important business logic is contained and enforced by the relevant templates, which are embedded for initiating contract creation without human involvement. The software solution uses innovative technology like AI, ML, NLP, OCR, and Computer Vision to capture the correct data and utilize the same to produce accurate papers tailored to meet specific requirements without missing the context.
Most importantly, users can utilize integrated tools to create, customize, edit, and produce data-driven documents. Later, the same digitized documents can be extracted as PDFs. The legal document automation software can also maintain brand consistency while auto-generating documents using conditional formatting and other features. Embedded templates for generating contracts and other legal papers are an added advantage. With the no-code feature’s help, users can also upload their custom templates, ensuring the final document reflects the required format every time it is used. The no-code feature allows users to generate various legal documents, including proposals, legal paperwork, and notes.
Legal document automation can be divided into two parts, each designed with a specific objective.
Choosing between the two can be tricky and depends entirely upon the objective one aspires to achieve with a legal document automation solution.
Legal document automation drives tremendous value for legal firms in terms of process efficiency and productivity of legal teams.
Automated document creation: Automated legal documents can save valuable time from extracting insights. It prevents the need for repetitive tasks of scanning every clause and adding or removing information by using dynamic forms for collating required data within a few seconds.
Digital signatures: The digital signature feature eliminates the need for parties to a contract to print, sign, scan, and send paper documents all over again. Instead, it streamlines the whole process, transcending into the successful closure of more business deals than before.
Flexibility of workflows: Many document automation software solutions enable users to complete their tasks offline and online from various mobile devices. This empowers the team to cater to their responsibilities from anywhere. They can also perform multitasks, like attending client meetings while delivering legal documents at rocket speed.
Transparent communication: Legal document automation allows teams to effectively communicate terms with clients by sharing dynamic automated forms. The software also generates notifications to clients, alerting them about the progress of the contract or the date for contract renewal by cutting back and forth email exchanges and detailing legal jargon. Hence, communication is entirely streamlined.
Centralized document repository: Legal document automation software is primarily cloud-based, storing contracts and other documents in a centralized repository. With robust security features and access authentication, leaders can control editing permissions and track editing history to prevent unauthorized access or edits. This permits team collaboration and prevents data leakage at the same time.
Easy to integrate: A good document automation platform can easily integrate standard business management tools such as ERPs and CRMs. As a result, it not only saves members’ time exchanging data between platforms; such platforms also prevent risks of duplication.
Adaptive interface: An adaptive interface of most legal document automation tools allows users to customize elements and make alterations to features as per needs or context.
As demonstrated earlier, legal document automation has effectively changed the game for legal firms. Unfortunately, the document-heavy sector was slow to embrace the change triggered by automation and AI. But, today, more and more legal firms and large corporates are increasingly showing their preference in opting for intelligent solutions to address the significant roadblock – poor document management. Moreover, with the advanced capabilities of AI coming to the forefront, legal practitioners are finding new ways to improve their efficiencies, especially regarding handling bulk documents.
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