P R O B A T E   &   P R O P E R T Y  
September/October 2003
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Technology - Property

Technology—Property Editor: Gerald J. Hoenig, 8495 Caney Creek Landing, Alpharetta, GA 30005, ghoenig@mindspring.com .

Technology—Property provides information on current technology and microcomputer software of interest in the real property area. The editors of Probate & Property welcome information and suggestions from readers.

What You Should Know About Document Automation Software

In the last column the importance of document automation as a productivity and quality control tool was discussed. This issue's column discusses the various document automation software products available on the market. Since writing the prior column, the author has taken employment (following retirement from 33 years of practicing law in the MetLife Law Department) with a company that consults in the document automation arena and provides services primarily for two document assembly products. The author recognizes this inherent conflict of interest, but believes he can report on the various products on the market in a fair manner. Rather than expressing a personal opinion, he is reporting on the features of available software products based on data obtained from questionnaires submitted to each software company.

An Internet search for document assembly software currently on the market revealed two broad categories of products available for lawyers. One is software that serves as a tool to automate a firm's or law department's documents. Lawyers use this software to automate their own content. This category was the column's focus in the May/June issue. The other category is automated documents sold with software that enables the user to assemble work product using content provided by the vendor. In this category, providers have developed their own model forms and have automated them to enhance substantially the productivity of the drafting process. Another category is made up of providers of automated forms for use by consumers without the benefit of lawyers. This column, however, is limited to those whose products are for lawyers.

Providers of automated forms generally target their products to small firms. One vendor, ProDoc, reported that its client base consists primarily of sole practitioners or firms of up to three lawyers. This company has more than 5,000 customers, and its automated forms are currently state specific to Texas and Florida law. Another provider, Wealth Counsel, advised that its subscribers number approximately 500 and that half are sole practitioners with the majority of the other half in firms of ten or fewer lawyers. This makes a lot of sense. Large firms and their lawyers tend to want to use their own forms, and although the same may be true generally for lawyers in mid-size and small firms, lawyers in very small firms may not have the time to develop and maintain the expertise in every area that is available from forms sold by others.

ProDoc and Wealth Counsel sell their forms on a subscription basis. Wealth Counsel charges an initial fee of $3,900 and monthly fees of $390. ProDoc's subscription fee depends on the practice libraries selected, and price can range from $75 to $125 per month (with additional fees for special libraries). Of interest to real estate practitioners, the basic libraries include real estate, landlord/tenant, and foreclosures, and there is an estate planning library for estate planning lawyers. Wealth Counsel specializes in and is limited to estate planning documents. Its documents do not include state-specific information, other than state-specific notary and witness attestation clauses, and users are asked to enter state-specific citations to code provisions such as the fiduciary powers act and the state durable power of attorney authority. An important benefit subscribers receive is updates during the course of the subscription period. Wealth Counsel maintains a listserv and a knowledge base on its website ( www.wealthcounsel.com ), which promotes knowledge sharing among its members. ProDoc also provides information at its web site ( www.prodoc.com ). Wealth Counsel uses the market-leading HotDocs as its document assembly software, but ProDoc uses its own proprietarysystem.

Advanced Logic Systems's Document Preparation System 8 provides state-specific documents for all 50 states and the District of Columbia. The documents include estate planning but not real estate. Of interest to real estate lawyers might be the corporate and limited liability company documents. For law firms of five or fewer professionals, the entire portfolio of documents can be licensed for $495 per year, the limited liability company documents for $95 a year, and the corporate documents for $40 per year. For larger firms the respective numbers are $990, $190, and $80 (these prices may vary in some states). The exact documents available can be viewed on the website ( www.dps8.com ).

One software product that delivers automated legal documents to nonlawyers is Rapidocs. It appears to be a powerful tool for automating documents. Although the software is available to lawyers, its use is generally limited to customizing documents sold with Rapidocs. The owners and sellers of Rapidocs appear to recognize the leadership of HotDocs in the market segment for law firms, so they have elected to focus their product on the market for delivering legal documents to consumers.

Turning to software that law firms and law departments can use to automate their own documents to make the drafting process more efficient and enhance document quality, the companies surveyed were ActiveDocs, DealMaker, FastDraft, GhostFill, Grantha, Pathagoras, PerfectLaw, thinkDOCS, and Amicus Assembly.

To understand the important features of document assembly software, a basic understanding of what the software can do as well as the general nature of documents themselves is needed. Such knowledge will help in evaluating the products discussed below as well as future products as they reach the market.

The Three Basic Elements of Documents

Documents contain three basic elements. One is variable information, which includes such items as names, amounts, addresses, social security numbers, and phone numbers that may change each time a new document is drafted.

The second element is conditional language, which is a text block that can be as small as one character or as large as thousands of words. This text is included or excluded from a document by a condition that can be simple or complex. An example of a simple condition is adding the letter "s" to the word "Borrower" in certain places in a document if there is more than one borrower. An example of a complex condition is if the mortgaged property is located in California, the secured property is an apartment complex, and the amount of the loan exceeds $15 million. Then a certain clause will be inserted into the mortgage and perhaps a variation of that clause will be added to the unsecured indemnity agreement. Conditional language can be even more complex, because the text block itself may contain variables and sub-levels of conditional language.

The third element of a document is static text, which is text that never changes during the assembly process. Static text is also usually part of text blocks that constitute conditionallanguage.

Assessing Document Assembly Software

In evaluating document assembly software, it is important to see if it efficiently handles the basic elements of a document.

Variables

An ultimate goal for dealing with variables is a system that eliminates the need to key in the same data more than once. The loan amount generally appears a number of times throughout a complete set of loan documents as well as in memos and transmittal letters about the loan. To prepare the entire set of documents, the user should not have to enter the loan amount more than once. The software should take care of placing the data wherever it should appear. This is true even if the loan amount appears as numerals in some places and as words in other places, or if it is to appear in BOLD or in italic type in certain parts of the documents. In addition, one variable may be the name of the borrower, and in some places in the documents the case of the name will be in all caps and in other places only the first name of each word is to becapitalized.

The more advanced software provides tools that enable the template developer to cause the same variable information to appear in completely different formats in different parts of a set of documents. Most of the software packages discussed below have this ability. In addition, the advanced software provides text manipulation and mathematical tools to enable data to be derived from other data entered. For example, if the user enters the loan amount, the interest rate and the term of a loan, the software could calculate the monthly payment, or, in a lease, the annual base rent could be computed from the monthly base rent. This not only saves time, but it also helps prevent inconsistencies and errors.

Actually the ability to reduce data input does not stop here. For example, if the name, address, and contact information for the lawyer's client or the other parties to a transaction are stored in the firm's practice management or matter management systems (or any other data storage system), and the document assembly software can access this database, then there is no reason for the user to type in this information. The software can simply insert it from the law office's database. Again, the software provides more efficiency and less chance for error.

To be able to use a data set entered for one document to assemble another document at a later time, there needs to be a facility for saving the data entered. All of the products provide this.

Conditional Language

Conditional language can be handled in a couple of different ways. The simplest is to give the user the ability to select whether the text block is to be inserted into the document during the assembly process. All of the software packages have tools that provide this in one way or another. To get the full benefit of document automation, however, the software needs to have tools that can condition the insertion of a text block into a document on a complex set of conditions. When a template is prepared this way, the user does not have to be an expert in the subject matter to know which clause to include or exclude. The template will take care of this based upon instructions furnished by the organization's experts. The ability to handle conditional language also brings the benefit of automatically selecting the singular or plural of a word, the appropriate gender, and the proper verb conjugation.

Repeated Information

Another very desirable feature of advanced document assembly software is the ability to enter multiple entries of certain types of variable information and having the software automatically deal with it in a customized way, so that time does not have to be spent modifying the document after assembly. For example, if you have a template for a purchase and sale agreement, you want to be able to enter any number of purchasers and any number of properties subject to the agreement. Most of the packages discussed below provide this capability, but some have limitations as noted.

The Software

Pathagoras is marketed as "a plain-text, no codes, no formulas, back to basics, document assembly program." It does a good job for such basic functions. Pathagoras is an example of the distinction between document assembly and document automation. It provides a convenient way to assemble a document that is more efficient than conventional word processing approaches. It does use variables so it helps with data entry, although it does not appear to have the tools to make the same data appear in different formats throughout a document without multiple entries. In addition, it is limited to 30 variables per document. This might be sufficient for small documents but not for large-scale projects. Moreover, this software does not provide a repeat capability. The product appears to be useful primarily in the small firm or in a small unit of a larger organization. Also, it works as an add-in to Microsoft Word, but does not work with WordPerfect. Pricing and other information can be found at www.pathagoras.com .

PerfectLaw is a practice management system. One of its features is the ability to assemble documents using data from its practice management database. Apart from this data connection, a user must generally use the merge tools of Word or WordPerfect to develop the template. This may be fine with simple documents. For more complicated documents, the merge tools of word processors do not compare in power and efficiency to the tools available in document automation software. Additional information can be located at perfectlaw.com.

ActiveDocs, DealMaker, FastDraft, GhostFill (including Amicus Assembly), Grantha, HotDocs, and thinkDOCS all have the tools to obtain the maximum advanced benefits from using variables and conditional language as discussed above. Each has a different interface, and each has its strong and weak points.

Amicus Assembly is in essence GhostFill, which has been integrated with the Amicus practice management system software. It should also be noted that HotDocs has been integrated with the TimeMatters practice management software. In both cases, the document assembly software can easily use the data from the practice management software to which it isintegrated.

DealMaker and Grantha are not currently being marketed to law firms or law departments in the United States. DealMaker is produced by an English company that claims its product has captured the majority of the top ten firms in England as clients. Marketing in the United States is being considered. Learn more about DealMaker at www.business-integrity.com . Grantha has been successfully used to permit members of the public to assemble documents on-line. For several reasons it is not yet active in the law firm/law department market. For more about Grantha, visit www.ssquaretech.com .

HotDocs is clearly the market leader at this time. The approximate number of licensed users for each actively marketed software packages is set forth in the table below. The table also shows the strength of the support for updates and fixes in terms of the number of programmers working on those matters.

thinkDOCS software has a unique feature not available with the others products. When a document is assembled with all of these products, a word processing document is generated that can be edited further, just like any other document. As the document is changed, because of negotiation or otherwise, the assembled word processor document can be modified as in the past. The software products are generally only aimed at producing a first draft. With thinkDOCS, however, the variables remain "alive" in the assembled Word document (thinkDOCS does not work with WordPerfect). The significance of this can be illustrated by the following example. If the loan amount is changed for the deal, the amount can be modified in one place in the assembled thinkDOCS document and it will be modified everywhere it appears in the document. This is an advantage primarily after the first draft, because all products permit changing any data before negotiated changes are made.

The thinkDOCS approach has some drawbacks. Because conditional language inserted in an assembled thinkDOCS document does not remain "alive," much, if not all, of the advantage is removed. If changing the loan amount requires the exclusion of conditional language that was included in the original assembly, that exclusion will not take place automatically in a thinkDOCS assembled document (re-assembly will be required just as with the other packages). In addition, one of the ways thinkDOCS is able to keep its variables live is by having all of its conditional language in variables and not on the face of the document. Although this is not a problem with the functioning of the software, it makes it more difficult for the lawyer to review a template for substance and see what the alternate provisions are from the face of the template. In addition, this feature apparently also causes thinkDOCS to lack as robust a repeat capability as the other packages.

The reader should now know the important features to consider in selecting document automation software. It is important to understand what to look for, because the software products are always changing, and new products enter the market from time to time.




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