How Law Firms Can Win With Document Automation and the Productization of Legal Services

By Matthew Miller posted 09-30-2022 09:49


Please enjoy this blog post co-authored by Matt Miller, VP of Product, Litera Microsystems, Matt James, Sr. Director of Evangelists & Sales Engineers,  Litera Microsystems and Sherry Kappel, Litera Evangelist, Litera Microsystems.

The market for legal services has been tightening for years. Alternative legal service providers (ALSPs) have been ratcheting competition up and driving prices down, forcing law firms to create new models for client service. At the same time, client expectations for both cost-effectiveness and the quality of legal work have consistently risen.

These pressures have inspired many law firms to look for ways to offer alternative billing arrangements. To that end, some providers are creating standard legal offerings at set prices, essentially productizing legal work. But scaling legal services to offer greater efficiency requires technology that can automate common legal tasks—and nowhere is that more important than in the core of legal work, document drafting.

In this blog, we’ll take a closer look at how document automation technology can help firms better serve their clients, control costs, and compete for the talent they will need to remain viable in the future. But first, let’s step back to consider what pressures are facing the legal industry and how productized legal services have surfaced as a promising solution.

The Pressures Facing the Legal Industry

Since the onset of the COVID pandemic, the velocity of change in the legal industry has been dramatic. The industry was already undergoing a sea change, with ALSPs and other non-legal businesses consistently expanding their services. These massive shops have the staff and tools to offer basic legal tasks such as document review for ediscovery and due diligence while providing an economy of scale that translates to lower costs and faster turnarounds.

Changing business models and increasing digitization are just a few of the challenges that law firms face as they look for new ways to prove their value to their clients. In this climate, law firms cannot afford to delay their adoption of tools that can automate repetitive tasks and streamline common processes.

According to the 2022 Wolters Kluwer Future Ready Lawyer Survey: Leading Change Report, the ability to use technology to improve productivity and efficiency ranked highest among legal departments in the criteria that they use to evaluate their law firms. Nearly all legal departments (91%) stated that it is important for their law firms to fully leverage technology. Moreover, clients are increasingly likely to fire their law firms for failing to demonstrate efficiency and productivity. A third of corporate lawyers (32%) said they were very likely and nearly half (46%) said they are somewhat likely to switch law firms in the coming year.

Nor is work the only thing for which law firms need to compete. The same survey reported that 83% of law firm lawyers say it’s extremely or very important to them to work for firms that fully leverage technology. Without the ability to hire and retain excellent talent, law firms will gradually lose the war of attrition.

Productization of Legal Services as a Solution

Law firms are beginning to transition to the productization of legal services to win more work and attract talent. Productization is essentially the process of developing a repeatable skill or service that can be marketed for a set price, translating the traditional one-to-one approach to legal services to a one-to-many model. Compiling wills, assembling contracts, and appealing parking tickets are among the clearest examples of productized legal services so far.

It’s impossible to productize legal services—or to create the economies of scale that come with automated repetitive processes—without implementing technology. Advanced legal technology is the key to moving the two interrelated levers of cost control and speed.

That was the message we consistently heard with The Changing Lawyer Report 2022. The vast majority of respondents—86% of law firm lawyers and 92% of allied professionals—agreed or strongly agreed that technology helps their firm or company save money and helps them complete work more quickly.

And there’s one task that lawyers and allied professionals must do over and over, day in and day out. It’s labor intensive, detail oriented, and demanding. Errors are easy to make and hard to catch, and they live on in perpetuity, sometimes with dire consequences. It’s exactly the sort of task that’s ripe for productization through the thoughtful application of technology.

We’re talking, of course, about document creation.

Three Benefits of Using Technology to Productize Legal Documents

Now, to be clear, there will always be elements of legal drafting that require the eyes-on attention of a trained human lawyer. But by leveraging technology to streamline processes and automate tasks where possible, lawyers are freed up to focus their attention where it is truly needed. Document tasks that can be delegated to technology include:

  • proofreading for spelling and grammatical mistakes;
  • applying standardized firm document styles for fonts and margins;
  • correcting and harmonizing document formatting, including numbered lists and internal cross-references;
  • tracking changes and comments throughout the revision process; and
  • identifying customized fields like names, dates, and dollar values in contracts.

By leveraging technology to manage these repeated tasks, law firms can productize a considerable amount of their document creation process and gain three crucial benefits.

  1. Meet or exceed client expectations. Law firms obviously cannot afford to adopt any processes or tools that may diminish the quality of their delivered work. Fortunately, document automation tools can dramatically increase the quality and consistency of legal documents while saving lawyers time that they can use to focus on the substance of their documents. In combination, this enables law firms to deliver legal documents that consistently meet or exceed client expectations. Over three-quarters of lawyers (78%) surveyed for The Changing Lawyer Report 2022 agreed that technology helps them offer a better client experience.
  1. Reduce prices and improve the predictability of pricing. By decreasing the amount of time that lawyers must spend reading, rereading, reviewing, and obsessively re-reviewing their documents, law firms can afford to charge less per document. These cost savings can not only be passed on to clients but can also contribute to more predictable pricing—the very essence of productized legal services.
  1. Attract outstanding talent. Lawyers are increasingly unwilling to work for firms that do not support them with advanced legal technology. Nearly half of respondents to our survey for The Changing Lawyer—47% of law firm lawyers and 42% of allied professionals—stated that the technology they use at work is frustrating. The majority of lawyers (68%) said that they would consider leaving their firm for one that offered better technology, while over half (59%) said that they would decline a job offer if the firm used outdated technology.

By Investing in Document Automation Technology, Law Firms Set Themselves Up to Win

Law firms that wish to compete for work and talent must find ways to lower their prices without lowering their standards. Productizing document creation through the application of specialized legal technology is one of the most promising ways for law firms to deliver high-quality legal work at a predictable, reasonable price—while also attracting and retaining top-tier talent.