When it comes to the bottom line, law firm attorneys are keeping their fingers crossed that 2010 will be a much better year for themselves and their clients. Even with a major economic turnaround, though, it's a sure bet that corporate clients will continue to ask their outside counsel for increased efficiencies and greater value in the services they receive -- and cost-cutting methods that are more creative than simply sliding more work to less-experienced associates who bill less than partners.
For law firms, the challenge will continue to be providing greater value and more creative solutions while maintaining profitability and avoiding more wrenching lay-offs of staff and attorneys. Fortunately, offering clients greater value while maintaining the bottom line are not mutually exclusive goals: By leveraging new technologies, law firms and corporate clients can work together as partners, rather than adversaries. Consider document assembly tools -- these types of programs automate the creation of routine legal documents, minimizing the costs for clients and allowing attorneys to focus less on churning out boilerplate contracts while focusing more on value-added services.
One Example: Wilson Sonsini Goodrich & Rosati
Wilson Sonsini Goodrich & Rosati are one example of a firm using document assembly to practice law the way its clients want it to. The firm is always looking for ways to better serve its many entrepreneurial clients. Last April, Wilson Sonsini launched the WSGR Term Sheet Generator, a publicly available online tool that allows entrepreneurs and investors to generate an initial draft of a term sheet for a preferred stock financing.
The Term Sheet Generator walks entrepreneurs through a list of questions that helps them generate the first draft of a venture financing term sheet. For clients who are not familiar with term sheets, information and explanations are included.
Once users complete the Term Sheet Generator, they can create, print and save a Word version, which they can then present to potential investors as part of a deal discussion. The term sheet can also be used to develop a finalized, customized contract, with the assistance of legal counsel. By doing the bulk of the work themselves, entrepreneurs can save time and money on legal costs.
This ContractExpress document assembly application, licensed from Business Integrity, is just one of the tools Wilson Sonsini is using to help clients quickly and inexpensively generate the initial drafts of common legal documents.
The Nuts and Bolts of Document Assembly
By using document assembly tools, law firms and corporate legal departments can create legal documents quickly, with less effort and a faster turn-around time. An automated document assembly system allows for more consistent documentation, since standardized versions of the form have already been created. The costs are also lower, since the forms don't need to be developed from scratch for every single matter.
Some companies have found the value proposition of document assembly so compelling that they have adopted a self-service model for their business units, where in-house and outside attorneys only get involved when the contract is ready to be finalized. For example, Cisco Systems, Inc., uses a document assembly approach for agreements frequently used by its business units, such as memoranda of understanding and marketing development agreements. Cisco allows its account managers, working with a distributor, to simply fill out standardized versions of these forms. The system works so well that, in many cases, the legal department doesn't get involved at all. Even when company lawyers need to review a document, they don't need to do so until 90 percent of the negotiations are done.
However, traditional document assembly tools have been problematic for some law firms and their clients. For smaller firms with limited resources, the upfront costs and IT infrastructure required for document assembly can be debilitating. Developing the templates and systems to complete the forms can be also a major undertaking, so the economies of scale have made it impractical for many firms and clients.
Clients have also had concerns about the security and efficiency involved with allowing their law firms to provide traditional document assembly services. Companies must also be willing to give outside counsel access to their corporate networking and computer systems. Clients with multiple or far-flung offices have also had issues allowing all their employees access to the same document, unless they had highly sophisticated intranets in place.
Fortunately, technology has advanced enough to solve many of the problems with traditional document assembly. Through cloud computing or software as a service (SaaS), law firms and corporate law departments of all different sizes can easily gain the efficiency advantages of documents assembly. There are no set-up costs and no infrastructure to maintain, and clients can easily be granted full access to the documents. SaaS also allows for easier collaboration on documents between the law firm and the corporate legal department, or between the business units, corporate legal department and the law firm.
Regardless of how the business picks up in 2010, law firms should not expect that their clients will be willing maintain a business model that involves the billable hour. Clients more and more want to compensate their firms based on value provided, rather than hours worked. Document assembly allows firms to think smarter, more strategically and divorce profitability from the hourly bill-just the way clients want them to.