The legal profession worldwide is facing a ‘more-for-less’ dilemma. Clients are demanding more work for lower fees. Competition is on the increase. And commoditisation is eroding profits like never before. As ‘margin-squeeze’ impacts profitability, law firms need to work more efficiently. You probably won’t be surprised to hear that there is no sustainable way left for firms to become more efficient other than by embracing technology.
In addition to making secretaries more efficient, fee-earners will need to leverage their time in order to remain viable. So why is document automation changing the game?
It is all about return on investment. Assuming a secretary earns a salary of R10,000 per month, the total cost-to-company is more like R15,000. Taking leave into account that’s a cost to company of around R1,000 per day, or R200 per hour. Document automation software typically costs around R150 per month per secretary to rent. So if a secretary saves just one hour a month as a result of automated documents, the system pays for itself.
So how does it make secretaries more efficient? Firstly, all precedents are organised into a logical folder structure, which saves time. Also, the layout of the letter is handled by the software, and the latest copy of the firm letterhead is selected automatically. Client information can be inserted into letters automatically, and the letters can be auto-saved to the appropriate location on the file server. Since most of the text is “boilerplate”, the secretary will also save proofreading time.
For the fee-earner, the gain in leverage is even more impressive. By re-using an agreement template, the fee earner saves time, both in drafting the agreement and in proofreading it. If one assumes an hourly charge-out rate of just R1,500 for a lawyer, they will only need to save 6 minutes a month to justify the rental price of the system. It is also possible for fee-earners to draft their own letters and agreements, since the software does most of the drudge work.
So the reason document automation software is in such demand is because it promotes the re-use of information, which saves time and money. Re-use of knowledge. Re-use of templates. Re-use of data. And re-use of clauses.
Of course there are other benefits too. Better accuracy, and better customer service since documents are created more quickly. And less risk that client information from a previous letter will be forgotten in a new letter. It also solves the problem where letters are produced on old letterheads, which is embarrassing and unprofessional.
Today, nearly all the large firms worldwide have already realised that document automation software is the most important technology when it comes to improving profitability. And in South Africa a large number of mid to large-sized firms have also seen the light. Given the excellent return on investment, document automation is a must for any law firm that is looking to improve its profit margin.