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How effective really is document automation software?

A Guide to Efficient Business Process Automation.

Contract & document automation software has received quite a lot of attention recently in the legal community. This is in part due to the large-scale deals UnitedLex recently closed with GE and DXC. UnitedLex has claimed to be able to reduce GE’s spending by 30% across legal services including document review. This serves to highlight that business process automation software can lead to massive efficiency gains, particularly in traditionally inefficient areas such as document review.

However, while these large volume deals do highlight some of the gains that are possible with business process automation tech, information on how to actually apply this software to your own workflows is relatively scarce. Not only that but as the amount of software solutions is increasing all the time, finding the right one for you can be somewhat daunting and time intensive.

 

This leaves some key questions unanswered:

 

  • How effective is contract automation software?

 

While UnitedLex claims to be able to reduce spending in document review by 30%, there is no data on how much of the process could effectively be automated or on the gains directly resulting from that. This makes it tricky to measure potential efficiency gains.

 

  • Should I use it for my own business workflows?

 

As there is not many concrete data on the types of contracts or workflows that are even suited to automation, it can be hard to gauge whether using automation tech is the right decision for your company.

 

  • How can I objectively benchmark automation software and find the right solution?

 

With so many solutions on the market, it can be a little daunting trying to find the right one for your business.

This post aims to answer these questions and provide guidance when it comes to selecting contract automation technology.

document automation software

Who uses contract & document automation software?

Law firms and corporations, unfortunately, lose thousands of dollars a year due to document backlog and human error. While documents do help with communicating tasks and formalizing transactions, the time spent on generating those documents could have been used in other more important tasks.

Right now, many people are recognizing the importance of speed and accuracy in filling out documents. That is one of the main reasons why using document automation software in the workplace is quickly on the rise. In fact, one company was able to save up to 6,500 hours a year by automating their contract workflow.

When talking about business automation, often we actually mean document generation or document assembly. This is where a legal document is assembled from building blocks defined in a clause library by simply answering a set of questions about the contract or transaction.

Dan-Alexander Levien leads a Legal Department at German car manufacturer Audi and successfully built and deployed a document automation solution in house (video in German). Dan-Alexander’s team focussed on automating the creation of legally binding and consistent Employment Agreements by consolidating them team’s collective legal knowledge into a clause library. With this central repository users can assemble legal documents via a simple, web-based, Q&A interface Such was the success of the initiative, that Audi has since partnered with document automation company ESCRIBA to automate additional contracting workflows internally.

While other industries have been somewhat quick to adopt automation tech, in the legal space it is Alternative Legal Service Providers (ALSPs) that have been the key driver of this technology.

The market-leading ALSP Thomson Reuters acquired leading contract & document automation vendor Business Integrity in 2015 to strengthen their software portfolio and automate legal document generation for their clients. Since rebranding the software as ‘Contract Express’, major companies including Microsoft and Cisco use the solution to automate high volume document creation workflows.

 

  • Microsoft uses Contract Express to draft and update End User License Agreements. Complex region, language and regulatory-specific clauses be assembled to form contracts in minutes, rather than copying and pasting from static document templates which involves huge amounts of manual work, and saves Microsoft’s commercial team hundreds of hours in contract administration.

 

  • Cisco use Contract Express to draft Memorandums of Understanding and Marketing Development Agreements. This empowers Account Managers in the field to submit pre-approved contracts to clients and contract directly with marketing vendors for high frequency, short-term projects saving time and dramatically increasing productivity.

 

What are the key benefits of legal document automation?

It reduces the resources dedicated to handling documents

Organizations spend a lot of money on resources and basic software to generate and manage documents. With the help of an effective document automation solution, your need for additional resources to handle the large volume of documents will be reduced. This gives you the chance to allocate resources and funds to more essential parts of your business.

It lessens the propensity for human error

Documents often get rejected, canceled, or delayed due to human errors in data entry and data storage processes. With the help of document automation software, individuals can be quickly alerted if documents are missing required information, making the whole process faster and less prone to errors

Your documents will be more consistent

People’s tastes for formats and styling within a company can vary meaning generated documents often have a different “look and feel”. Some changes are so drastic that they completely fall outside of company branding guidelines.

Document automation software can set up templates, share them with co-workers and provide a structure for your documents without needing to adjust (or fiddle) with layouts and formatting. Your organization will look more professional and presentable to clients and suppliers.

It offers better privacy and security for documents

With document automation software, it’s harder for unintended parties to access files that they are not privy to. You can add passwords to important documents ensuring confidentiality, data security and compliance standards are strictly adhered to.

 

The benefits are clear, but what’s the catch?

While document automation software such as ESCRIBA and Contract Express from Thomson Reuters allow hundreds of companies to be more productive via document automation, there are two main disadvantages that need to be considered:

 

  1. The hidden cost of implementation
  2. Workflows breaking when documents need to be negotiated

 

1. The hidden cost of implementation

While document automation software saves time and money by automating the generation of legal documents, it first requires an expert with specific, technical knowledge to set up. You will need a programmer and/or a legal engineer to create your clause library, set up the document template, configure the Q&A interface and test the workflow to ensure documents are being rendered accurately and to the letter. Depending on the volume and type of documents to be automated, this can be a costly and time-consuming task. This means document automation solutions may not truly be self-service and involve hidden costs to get up and running.

 

2. Workflows breaking when documents need to be negotiated

While document assembly solutions can automatically generate and distribute a document, most recipients will really only consider this as a first draft and basis from which to begin a negotiation. When a client or vendor pushes back or seeks to clarify certain terms in the document, manual intervention is required and the automation cycle breaks. Up until now, no solution has been able to collect feedback and negotiate changes to the document on-the-fly when recipients push back on terms. In addition, lawyers or commercial specialists need to get involved as negotiation takes place offline through the back-and-forth exchange of document redlines over email. In these cases, almost all of the time saved and value generated for the business using automation software is lost.

Software like synergist, a leading contract automation platform, actually solves both of these problems:

Using synergist, Radiant Law, an innovative Alternative Legal Services Provider (ALSP), was able to deliver a highly efficient contracting service for the recent GDPR law which took effect by automating the contracting process for Data Processing Agreements and even automatically deal with exceptions generated by contract negotiation. Not only this but the software takes minimal tech know-how to set up. Read the full success story here.

Back to the start: answers to the key questions

Remember our questions at the beginning?

  • How effective is contract automation software?
  • How can I objectively benchmark automation software and find the right solution?

Let’s answer these two together. In order to gauge the efficacy of a business process automation solution, you should ask two questions.

 

  1. Will I need programmers and tech staff to install the software?
  2. Which workflows can be fully automated?

 

To answer the first question you need to research the software provider. Most case studies don’t actually openly tell you how many tech hours and programmer staff were needed to get up and running. But this is the first question you should ask!

Once you have determined how easy/difficult it will be to install the solution, you can work out which of your workflows can be fully automated. This is crucial for sourcing the correct software for you. Whether it is legal counsel, high volume ALSP work or procurement supplier contracts, you need to understand the workflows and know which will actually benefit from the automation software once implemented.

In Radiant Law’s case, around 50% of cases needed additional action. This means that with a solution incapable of automating the negotiation phase around half of all cases would not have fully benefited from the automation software.

 

  • Should I use it for my own business workflows?

 

We believe that most contract workflows can benefit greatly from automation software. But as mentioned above, it is important to understand the workflows you want to automate, whether the software is up to the task, and the efficiency gains you can achieve. If you are one of the following we would highly recommend reviewing your current contract and document workflows:

 

  • Legal ops team looking for additional workflows that can enable the business to serve themselves
  • Procurement teams with high volumes of purchasing and supplier activity looking for more independence
  • In-house counsels looking to be more efficient
  • ALSP looking for ways to reduce time spent manually creating reports and delivering their clients additional insights around risk management

Automate your contract & document workflows today and reap the benefits

As software like synergist continues to become more accessible and artificial intelligence (AI) gains ground, more daily processes should be earmarked for automation. Staying current with technology trends is key to remaining competitive in the legal space.

Being able to provide faster, more accurate and efficient document automation will help you significantly increase your productivity and the ease of doing business with clients, partners, and suppliers.

Find out how you can successfully apply automation technology within your company using synergist today.