(Just about) everything you wanted to know about automated legal documents, but were afraid to ask

Posted on: March 9, 2012

As well as working with some “BigLaw” firms, a lot of my time is spent working with medium and small law firms on a variety of strategy, business development and relationship management projects. When it comes to the topic of developing legal products or services – and particularly the area of adopting technology and automation – I am often met with reactions spanning dread, disbelief, dismissal and denial.

When I mention that there are established systems around that are accessible – and already adopted successfully by many firms of a similar size – I often receive a barrage of questions. Some of the questions reveal a surprising lack of understanding of even the most basic technology but many reveal a substantial misunderstanding of what this is really all about and what it will and won’t do to the legal market and, more specifically, their firm.

So being a straightforward kind of person, I contacted Jon Busby of Epoq – an equally straight talking person – and asked if I might pose a whole bunch of questions at him that I was currently receiving from lawyers and that just might be better answered by someone at an organisation who not only knows all about document automation in law firms but is probably one of the market leaders in the area.

I trotted up to Edgware to some surprisingly modern and spacious offices. I was amused to find on the walls of the meeting room both some rather old (and authentic) framed legal documents – I think one was a trust deed following a probate – as well as a modern, multi-coloured flowchart of how the technology works. Is it a test to see towards which “artwork” I gravitate?

Armed with coffee, I start firing my questions at Jon – on behalf of all those lawyers. And I haven’t had to edit out any serious “tech talk” as there wasn’t any – in fact I was amused to see that Jon had a small notebook (of the paper variety) and a sharpie pen rather than a funky new piece of technical wizardry.

Before I got to the list of most commonly asked questions by lawyers, I ask Jon a couple of my own questions:

What’s the nicest things that people say about Epoq and DirectLaw?

Absolutely no hesitation from Jon here: “We listen first, I think we are very easy to get on with, we try to understand the law firm’s problems but ultimately we increase margin.”

Seeing my frown at this piece of management/sales speak he goes on to elaborate. “Sure we improve efficiency, enable choice on how a client and lawyer may engage but ultimately it is about increasing margin for the law firm. When we compared our document automation with 100 lawyers who were doing things the traditional way we showed savings of typically between 30-40% of their time. This time saving either goes straight onto the margin or the firm has the ability to reduce its price and/or do more work. That flexibility of margin could become critical in an increasingly competitive market”.

And what’s the nastiest things that people say?

Jon looks genuinely perplexed at this question. I offer some suggestions: Destroyers of the legal market? King of commoditisation? Arrogant upstarts? Champions of the consumer and Slayer of the lawyer?

“I guess people will think that we might be the enemy. But in reality we are simply using the technology to try and help lawyers provide a better service. We’re definitely not out to destroy the legal market or lawyers, but we can’t say that we are their saviours either. In fact I would go further. Lawyers offer huge value. It is a privilege to help them deliver that value better. We do see ourselves as trying to support lawyers take advantage of technology and make the transition into the digital world. But, and this is important, it is our job to map onto their world not the other way round”.

“Show me the money” is my favourite scene from the sports management film “Jerry Maguire” starring Tom Cruise. So I start by cutting straight to the chase and asking about cost.

1.     Investment/cost – Isn’t this sort of technology really only within the financial reach of the biggest (read: wealthiest) law firms?

“We currently provide our service to around 70 law firms in the UK. Whilst there are a handful of large firms in the mix, the vast majority of our clients have between two and 20 partners”.

Jon is not shy about talking about price and costs. IT people will talk about subscription services and “software as a service” but what it really means is that you pay and play.

“An entry level system costs £500 pcm. This is for a one user licence in one area of law – such as Wills – for 12 months. Additional user licences cost £50 each. Some firms do progress to spending £5,000 to £10,000 pcm but that is usually based upon a very bespoke need and strategic plan. I suspect more firms will evolve that way but now the focus is about helping firms walk before they run. The functionality is there and we are developing more over the next three years but again, I come back to the word evolution, rather than revolution”.

”I guess that historically, lawyers have always perceived technology solutions to be expensive. There is a huge disconnect between the lawyer and the firm’s technology. That may be because in the past they have had to work with their IT departments to make large capital purchases of software that then cost more to tailor and implement within their firms. Then there’s the training, maintenance and upgrade costs. The software world has moved on – the Internet did that – there aren’t those big entry cost barriers anymore”.

2.     System – But what IS IT that you are selling at Epoq?

“There are essentially three parts to what we provide to law firms:

a)     The technology – which is a relatively small part

b)    The content – the actual legal material in the document. Imagine what it would cost to encode all the possible permutations that you might need in an employment contract – you could spend three man/woman months putting that together.

c)     Insight into the market and an analysis of what a firm actually needs so that the first two can be tailored into a system that works for your lawyers and ultimately your clients.

Firms want to talk to us because they feel that they can trust us and learn from the deep insight that we have into the changes that are occurring in the market place and how they can use technology as part of their response”.

When I press Jon on what it is that the lawyer actually gets for his or her money, he explains further:

“We provide a library of document templates. These templates are turned into draft documents through the completion of an online questionnaire. . Typically, a lawyer takes a call from a client. The lawyer selects the appropriate document template  from the library (it will have been branded to look like one of the firm’s documents) and securely emails it to the client. Alternatively, the client can access the document template from the firm’s website. The client completes the document questionnaire online, which automatically creates a draft document for the lawyer to review, tailor, modify and finalise for the client prior to a face to face meeting. In essence, we help lawyers to capture the information direct from the client more efficiently by getting the client to do that ‘grunt’ work. Otherwise, the lawyer must spend time asking the client lots of questions which the lawyer then writes down and then dictates (or types) into a system so that a draft can be produced. The system simply automates that data capture element of the relationship”

Coming at it from a different viewpoint, I ask Jon that if we saw a lawyer as a builder – with a toolbox containing a hammer, screwdriver etc and with much knowledge and experience of different types of building challenge – what would DirectLaw be? A replacement tool box? A robot? Jon replies that in this analogy, DirectLaw would be another tool. If the builder needed to make 50 holes all the same he or she might reach for the electric drill (DirectLaw) and at other times he or she might prefer a Philips screwdriver (traditional legal tools) to tackle a particularly tricky or one-off job. “The point is the lawyer chooses the tool that is best or most appropriate based upon what the client wants”.

3.     Range of legal services – but not all legal services are suitable for this type of automation right?

“Correct!” says Jon. “However, just about all areas on non-contentious law where there is a high degree of standard data capture will be suitable for some level of automation in the future. Right now the focus is on those regular, routine, standardised legal processes – like wills in the consumer market and employment contracts in the commercial market – where there is some element of data capture. The technology is not in a position to do much in a complicated merger or acquisition right now”.

I ask him about the most popular areas at the moment. “Wills (we have a variety available – STEP, discretionary, complex). Employment contracts. Lasting Powers of Attorney. Shareholder Agreements. Partnership Agreements. And recently we have had an increasing amount of interest in divorce – the E1 form and the statement of arrangements. Clearly, there are some areas where there isn’t a standard process such as high end commercial property agreements where we don’t offer solutions. Divorce is an interesting area. There is an assumption that online engagement has to occur at the start. I disagree. It can be deployed where it is needed. So in divorce work the human contact at the start is vital. Family lawyers use our platform further down the line when validation of the lawyer has happened and automation is used to deliver efficiency and convenience”.

4.     Integration – To what extent does Epoq integrate with other law firm systems – like practice management (PMS), accounts and client relationship management (CRM)?

To my surprise, Jon says that they are often asked about this but that DirectLaw doesn’t integrate – lawyers run it in parallel to whatever other systems they have. But Jon also explains that they are well aware of the need to integrate with PMS systems because that is a natural thing to do. “If we don’t continuously innovate or develop solutions to relevant problems then Epoq as a business will fail. It’s a bit like Apple creating the iPhone3G then never developing another phone. Apple would have failed. The future is a work in progress not a finished article.”

For now this means that lawyers continue to use their PMS (if they have one), accounts and CRM systems but use the Epoq system when it comes to producing the first draft of the document. Documents and information can be exported from DirectLaw if it needs to be used by other applications.

5.     Differentiation – If all lawyers use the same (Epoq) technology, won’t we all be providing the same service – further reducing our differentiation and increasing commoditisation?

This is a question that I am comfortable answering – as it indicates that the lawyers may not have considered their service from the (non legally trained) client’s perspective. Most clients are not able to differentiate between the quality of the legal advice being provided and will assume that someone who says that they are an “expert” probably is.

Clients judge the quality of the advice from the way in which that advice is provided – by all the things that happen around its provision – the way the lawyer talks to them, whether they feel the lawyer understands their particular situation, the rapport and empathy in the relationship, how the phone is answered, the nature of their web presence, the décor in their offices, the speed at which a question is answered, whether the coffee is served in paper cups or bone china (and whether it is good or not) and so on.

Jon is in agreement and elaborates: “The client doesn’t perceive much value in the lawyer asking lots of questions and jotting down the answers. The client perceives value in the lawyer’s views and responses and the trust that they have in those responses. The client is considering the overall experience and the outcome. If the system enables the lawyer to spend more time focusing on the elements that are important to the client – rather than routine questions – then the client will value the experience more and perceive greater value. The system allows the lawyer to spend more time on the experience and the relationship – which should increase rather than reduced differentiation”.

Jon provides another way of looking at the issue. “All lawyers use Microsoft Word to produce their letters and documents. But this doesn’t mean that they all provide the same advice or service. No client ever chose a law firm because they used Word.”

6.     Standard prices for legal services – Doesn’t document automation mean that ultimately we will all be providing the same service and therefore there will become a standard price for basic types of legal service?

I feel that we have answered this question at 5 but feel compelled to ask it as if is one of the questions that is posed to me frequently. I explained to Jon that one of the reasons that I seek legal advice is that I want a solicitor to give me “norms” of what other people do in similar situations and to reassure me that I have covered all the issues – and the written document itself isn’t going to provide this.

Jon responds with a story about a legal requirement that he recently had – he sought a lawyer’s advice to validate his views and gained insight from the questions that the lawyer asked who also gave him comfort that an issue that was important to him and his family had been properly addressed. “The value I bought and am happy to buy from a lawyer is intellectual not form filling. To be honest I use Amazon, Moneysupermarket.com etc so I am more than used to electronic form filling, in fact I prefer it. Do you know how annoying it is when I tell people there is no ‘h’ in Jon, yet they still put it in?”

Both of us judged the value of the service according to the importance of the issue to us. Neither of us were looking for a £20 off-the-shelf legal document alone and both paid considerably more for our advice. “Without a doubt there will be a market for the £20 Will. But I don’t think that is the market most law firms will go after. If they do they better have a very good process and strategy in place or they will burn badly.”

7.     Reduced profit – If we have to buy technology and then reduce our prices, we are taking a double whammy on profit. Where does our future profit come from?

Again, this question comes from lawyers not really understanding the issues outlined above. But to reiterate the answer:

“The automatic legal document system allows the lawyer to produce the document in less time. This means that either the price can be reduced – with margins intact – or the margins are increased because the costs are reduced”.

But Jon adds this “Why are you reducing your price? You don’t reduce your price because technology made you more efficient. You reduce your price because the market dictates it based upon the value you offer. If a market cannot recognise your value and all it can see is your price then that is all it can judge you on.”

I butted in here and said my piece about the strategic challenge for all law firms in identifying future (new) profit streams by identifying and meeting new and emerging client needs. I guess I’m allowed to promote my services whilst exploring what Epoq has to offer!

8.     Responsibility – Who is responsible for managing this sort of system in a law firm – is it IT, the Board, the head of department, someone else?

Jon explains that usually the first call is often from someone in the marketing or business development team but typically the sign-off comes from someone in the partnership. Jon also explains that typically he wants to speak to the end user of the system – the actual lawyers who will do the document assembly – as these are the people around whom the service is shaped and who will actually need to use the system if the firm is to benefit. Jon is also keen to point out that he or his colleagues rarely have cause to deal with the IT directors of firms.

Jon adds, “Look at technology today. Not just at work, but everywhere. The shift is that it is all about the user. As a technology provider for me it is all about the user and in my world there are two users; the lawyer and the client. So we spend our time thinking and developing ways to make that experience better for both of them”.

9.     Client reaction – Aren’t there some markets where clients will resist the use of technology in their legal service?

Jon laughs “Yes! But we are delivering around 70,000 documents a year to consumers and businesses through our various partner sites. Our oldest user is 92, so clearly a lot of people are happy to complete legal documents online.  It’s about relevance really. At the heart of the issue here is the extent to which you blend on-line and off-line services for different parts (segments) of your market”.

10.  New entrants – Will the new entrants into the legal market be using your technology? Have they already invested?

“Yes and yes” says Jon. I accuse him of being “a gun for hire” and available to anyone who is prepared to pay. He sees no shame (nor should he) in agreeing. “We just want to provide a better service for whoever wants to deliver it. But think about what new entrants mean. It means they will target the weak spots of law firms and more than anything they will educate the market into better ways to engage and that will be more tech driven. It is that educating that will determine the outcome of this market.”

11.  Survival – If firms don’t adopt the technology, will they survive?

“It is not just the technology that will dictate whether a firm survives but a whole host of other things such as a firm’s strategy and its management, its ability to read it’s market and adapt, the quality of its people and their commitment to matching their service and offer to the needs of their clients, their attitude towards growth and innovation, and their ability to change. Automated document assembly is not a panacea – it is one small part of a range of possible options facing large and small firms as they navigate a rapidly changing market place”.

12.  What to do – What should we be doing to prepare our firm to consider moving to a document automation system?

“Do not let the technology tail wag the law firm dog. Keep in mind the big picture – What is going on in the legal market? What are we trying to achieve as a business? Who are our clients and what are their needs? If you are unclear about these things then this is the place to start. Once you know how you want to deploy technology to change the way that your lawyers work in particular areas then come and talk to us. What we do is assign an account manager who will have an initial discussion with you, to learn what you are trying to achieve and then help you move in the right direction. If we don’t think that DirectLaw is what you need, then we will say so”.

Jon is also keen to warn firms away from the “Big Bang” approach. He says “Identify one or two lawyers who are keen to learn about the approach and perhaps experiment in their practice area. Start small. Try it out. As with most technology, it is easy to scale up at a later date if you want to extend your involvement”.

I remind Jon about a valuable lesson I share when teaching project management “The greater the project, the greater the likelihood of failure – start small and succeed”.

At the end of the discussion, I feel that I have learned a lot and gained a better understanding of what is on offer. One thing did strike me. Whilst Jon was happy to talk about document automation he talked more about Epoq’s vision of where this market is heading over the next five years. He is very passionate about this. “Epoq only ever employ the best. But the joke goes that you have to have two things to survive in Epoq; passion and an opinion.”

Jon didn’t sell, he explained. “I see myself as an educator first, salesman second. I think if you understand the vision of where this is all heading then the product, DirectLaw, is a natural progression because it has context. I want to help lawyers understand that vision by sharing our insights.”

Interestingly, the £2,500 pounds of Epoq software that  I recently received from my bank when I opened a new business account – part of a package for which I pay around £17 a month – is still unopened. When I next face a legal challenge, I suspect that I will still go to one of my solicitors. However, I will now ask whether they are using document assembly technology before I give them my instructions.

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