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   April 2002


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BOSTON-BAKED DOCUMENT

AUTOMATION BY MARC LAURITSEN

One innovative way to deliver legal services is to develop and maintain a document assembly system for use at a client site. That’s just what the Boston office of Hinckley, Allen & Snyder, LLP is doing for one client, Fleet National Bank. Each year the franchise finance group at Fleet provides millions of dollars in small business loans to McDonald’s franchisees across the country for the purpose of renovating existing restaurants and building new ones. Paula K. Andrews, partner in Hinckley Allen’s corporate practice group, drafts the documentation for the loans (notes, mortgages, guaranties and related documents). But drafting and reviewing documentation for each specific loan could not be done profitably given the relatively small dollars involved and the corresponding constraints on legal fees for such transactions. So instead, Andrews has developed a series of document models, with fill-in-the-blanks for loan terms and alternative language for different states and various loan types (such as fixed vs. floating interest rates, equipment loans vs. mortgage loans). These models have been translated into a complex series of HotDocs templates that are run by Fleet’s franchise finance group, headed by Ted Lynch.

When a McDonald’s franchisee requests a loan, Lynch’s staff fire up the HotDocs system and answer questions in a series of on-screen dialogs regarding such issues as the type of borrower, type and terms of the loan, location of the restaurant and guarantors’ names. The system then generates a set of loan documents in Microsoft Word, along with a datasheet summarizing the key terms. Because the loan programs are standardized, there is no negotiation of the standard loan provisions and no need for Fleet to run the documents by Andrews at Hinckley Allen, since they are based on models she has already approved.

The benefits of this approach are many-fold for Fleet National Bank. With the document assembly system on its premises, Fleet can much more quickly respond to a particular franchisee’s request for a set of loan documents. And if the franchisee has previously secured a loan from Fleet, many of the borrower details can be called up from a saved answer file, rather than reentered. Most importantly, because the HotDocs system uses preapproved clauses and programmatic logic, Fleet does not incur the time and expense of legal review for each loan.

For McDonald’s owner-operators, the system means they get loan documents faster. With Lynch’s policy of "zero tolerance" for post-assembly edits by his staff, McDonald’s too has come to rely on the Fleet system to produce consistent and accurate forms for every instance in which McDonald’s or one of its joint partner franchisees is a borrower.

For Hinckley Allen, it means continuing contact with the client and ongoing work to revise the model documentation when new loan programs arise and when new state- specific modifications are needed. Changes to the templates at Fleet are only made when they are drafted and approved by Andrews.

Another benefit that Andrews sees is the ease with which advice can be rendered to the client when questions do arise. Since all the forms are standardized, Andrews and her team at Hinckley Allen can simply reference the firm’s own set of loan documents for a particular program and provide advice about their use without having to obtain client copies of the documents and review them. All of this means a solidified relationship among Hinckley Allen, Fleet and McDonald’s—with each party efficiently adding value but with a document assembly system to store the legal and drafting knowledge and do the routine work.