WHY AUTOMATING LEGAL DOCUMENTS IS GOOD FOR BUSINESS

No one likes to be told they’re redundant.

As an employment lawyer, I see it all the time — some folks are deeply wounded when they are told they are no longer needed. They struggle to cope when faced with an uncertain future and threatened reputation.

But others take it in their stride. They are the-cup-is-half-full-types. I’ve met some of these clients in the street many months after they were made redundant, to only tell me that, in a round-a-bout way, being made redundant was the best thing that ever happened to them. It freed them up to see life differently. It forced them to take risks, or go looking for a work environment far better suited to their passions.

Today, lawyers as a whole are being threatened with redundancy. Thankfully, we’ve been given more than a couple of week’s notice.

Richard Susskind, an English law professor, appears to have been one of the first to forecast the impact that technology, and document assembly in particular, could have on the law profession. He was saying these things back in 1998.

Since then, there has been arguably slow progress. There may be reasons for that — the law profession is one of the last surviving guilds, which may have shielded it from otherwise disruptive innovation.

But the internet, cloud computing and other advances in computing technology are forcing change. As one blog noted, the future of law resides in “client-centered services, technology-heavy processes, and the availability of legal services, both virtual and fast.” This is how the guild will be challenged. And the automated generation of documents is one aspect of this force for change.

And this has lawyers worried because if a computer can do the job of a lawyer, who needs the lawyer?

In truth, lawyers have been using document assembly ever since the advent of word processing computer programmes.

The lawyer creates a document for Client A, and then uses the same document as a starting point for the Client B (by using the find-and-replace function) — drastically reducing the time it took for them to do the work for Client B but not necessarily reducing their bill accordingly.

Clients have wised up to this over the years. They don’t expect to pay a lawyer to perform what amounts to an expensive find-and-replace exercise.

I am sometimes asked whether I can simply give a client a template document for them to use at no, or very little, cost. They ask this because they know it does not cost me anything in terms of my time for me to pass on such a document (which is also one reason why the hourly rate is doomed, by the way).

Admittedly, even Susskind doesn’t go so far as to cast lawyers out of the picture altogether. There will still need to be lawyers who craft the documents in the first place.

But once the document has been drafted, it is conceivable that the lawyer could be sidelined in favour of having the document generated at a reduced cost using automated document assembly. You can forgive lawyers for thinking that if they are no longer needed by Client B to finesse the document they drafted for Client A, then this endangers a traditional stream of revenue.

But it is not all doom and gloom. The indications are that there is a huge untapped market that will be best served by lawyers who adopt cost and time-saving technologies.

Already LegalZoom and others like them are serving a market segment that appears to have previously been overlooked by firms. Some surmise that this untapped market represents up to 85% of the total potential legal market.

If those figures are correct, this may represent a long-tail of the legal market. In other words, if a law firm can produce a myriad of its own documents for automated generation at reasonable cost to service this untapped 85% who may need them from time to time and want to trust a reputable, local firm, that may represent a brand new revenue stream.

So the choice for lawyers in the face of their impending redundancy is this: do you bemoan the loss of your current business model and associated revenue, or do you see this as an opportunity to expand into a new revenue stream?

The indications are that the latter course will be best for business in the long run.