May 01, 2021 Departments

Technology—Property

Time for a Rehab? Optimizing Your Document Assembly System During a Time of COVID

Seth Rowland

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.

Out of an abundance of caution, our lives outside our homes have slowed down drastically. Many of us are not even leaving our houses for work regularly. This odd historical event has reintroduced us to our houses with a vengeance. We have discovered that our homes, while functional, can be improved. In my home, we have repaired and replaced an outside porch, installed new ceiling fans, purchased a new stove, and began work on a Japanese-inspired couch. Homes, no matter how well-made, require renovations over time.

A document assembly system is a software program that generates legal documents from model templates, merging in answers from an electronic interview. Document assembly systems have been around almost as long as word processors. Many law firms have created some version of a legal document generation system— anything from simple merge templates to more elaborate systems using programs like Hot Docs, Xpressdox, or ContractExpress. Some of these systems have been in place for decades. And, frankly, some of these systems are a mess—their promise of increased efficiency and accuracy smothered under years of poor planning, inconsistent coding, and duplicated templates. Like your house, you may discover these systems need refreshing or even a total rehab.

How do I know this? When I began working as a document assembly consultant, half of my projects came from fixing document assembly systems that were already in place. The classic example would be a lawyer who had bought HotDocs and coded one template. Thrilled with the result, he coded another document and then another. Soon, he would have about 20 to 30 templates. Each template would have its own component file and its own variables. To create one loan package, he would fill out 5–10 separate interviews. Sometimes, the templates looked good; other times the numbering was off, paragraphs were wrongly merged, and tables and signature blocks were out of alignment. After a while, he may have realized he could either get help or return to the old method of search and replace on the last deal. That was usually the point he would call me.

With the demands of a busy law practice, long daily commutes, and family commitments, most lawyers have little time to invest in learning how to create a document assembly system that would truly fulfill its initial promise. There is a silver lining, however, to living in the time of a pandemic. Activities outside of the house have slowed. A time of COVID might be the perfect time for you to rethink or “rehab” your less-than-perfectly functioning document assembly system.

There is a further reason why now is the time to “rehab” your templates. The world of document assembly has gone virtual. Document assembly in the cloud is now affordable. For between $20 and $200 per month per user, you can have a cloud-based system. They include offerings from established players like HotDocs (http://www.hotdocs.com), XpressDox (http://www.xpressdox.com) and ContractExpress, now part of HighQ (legal.thomsonreuters.com/en/products/highq), and newer players like TheFormTool (http://www.theformtool.com), Woodpecker (http://www.woodpeckerweb.com), Documate (http://www.documate.org), and Knackly (http://www.knackly.io). These platforms allow you to leverage your investment in a document automation system by opening it up to your legal colleagues and your existing clients. There is no need to install software on each user’s desktop. An online document assembly system allows you to access it from anywhere you have an internet connection and renders the MAC vs. PC debate moot. Associates and paralegals can now simply log into a portal and start producing legal documents. Clients can be sent links to web-based interviews. Their answers to intake questionnaires can be used to complete much of the document assembly interview, saving time, and reducing transcription errors.

I Don’t Have Time to Learn How to Code Templates!

So how do you get started? We are not talking about difficult computer programming. Everything in this article can be done without an advanced degree in computer programming. The tough technical parts of template development can be handed off to an experienced document assembly consultant. Realize that the more a consultant is required to do, the larger the bill will get. There are some preparatory tasks that a lawyer can do, before going to a consultant, that will bring the bill down considerably. As I tell my clients, the better your preparation, the lower my bill.

The Touch Test

Many existing document assembly systems trace their origins to the turn of the century (aka before 2000). Clients will often end up with well over a hundred templates sitting in their template library. So, before you “touch that rehab”, you need to identify which templates you actually “touch.” Start by making a backup copy and an inventory of all your templates. On a spreadsheet, list each template and set forth the filename, the official title, the document’s purpose, and if there are multiple documents the title of each constituent document. Also, identify the last date the template was revised and the number of pages.

Now open two file explorer windows on your computer. In the first window, open the folder where your templates are kept. In the other, create a new folder for the templates you intend to rework. Sort your templates by date. The only templates that should be part of your rehab are the ones you use frequently and those you have revised in the past year or two. That is your essential system. Copy those templates to the new folder. Back on the spreadsheet note which templates will be your new “base templates.” Finally, rename those templates in the new folder, assigning a unique ID number to each one (e.g., 01 Lease.docx, 02 Rent Roll.docx, etc).

Template Consolidation

We will call templates that you identified the new “base templates.” To convert an ordinary template into a “master template” you need to compare the base template to your similar templates and add in all the alternative language you find in your other templates. You need to decide whether the alternative language is (a) an error, (b) a better way of stating the legal proposition, or (c) language that comes in only under certain circumstances. If the alternative language is a better way of stating, fix the language in your new master template. If the alternative language is required under certain circumstances, then set off the language in brackets and state the rule for inclusion or exclusion. At the end of this process, you will have a marked-up master template.

Take a typical loan transaction. I have seen firms with over 100 templates to handle this: one set of 20 loan documents for a corporate borrower; a separate set for a partnership; another set for a single-member LLC; and yet another for a multimember LLC. Then, there are sets for the neighboring state. And if there is another lender the firm represents, there will be another complete set of 100 templates. Each of these is a separate set of templates, many running to dozens of pages. Each has its own set of interview questions. This is a maintenance nightmare. It requires a full-time associate just to keep all the language up to date.

Where to Begin

Let’s say this nightmare is your system. Go into your new folder and begin by opening the loan document set you have identified as the one you use most often, say the loan for the corporate borrower. Open each of the other loan document sets one at a time. Compare the corporate loan to the single-member LLC loan, and you will realize that, except for the description of parties, the signature block, and the certificates of borrower and guarantor, these are essentially the same documents. Compare the single-member LLC to the multimember LLC and note that the main difference will be minor changes to the signature block and a change in the certificates from singular to plural.

Mark these alternative versions in square brackets. Add a Word comment or a superscript notation to indicate the reason for the alternative version. If there are multiple alternative versions, follow the rule of “exceptions first.” List the non-standard language exceptions first, and then use an “ELSE” to denote all other circumstances. Continue throughout your master template, adding in all the single-member LLC differences where they are required. Then take up the multimember LLC and do the same. Finally, tackle the loan to a partnership. Congratulations, you have created a single master template that can do the work of many. If you have multiple lenders who use the same form, you can add variables for the name of the lender and incorporate lender-specific language where required; you don’t need to create a new set of templates.

Too Many Interviews

When templates have been created one-by-one over time, they are usually created with separate sets of questions. The lease that was created four years ago may have an entirely different set of questions from the lease created last year. Now that you have created your new master templates, it is time to create one master interview for each set of templates. You want the questions to appear in a logical order; not the order in which the questions appear in the documents.

The goal is to group your interview questions into dialogs. The first dialog should cover questions about the core structure of the transaction. The next few dialogs should cover the parties to the transaction. Then, you should address details about the transaction that are common across multiple documents. Finally, you should create separate dialogs for questions that are particular to a single template.

On each dialog, you can group questions into topics. Start each topic with a header that identifies the topic and some help text to explain the topic. Within each topic, you can order questions by importance and relevance. Certain questions will determine whether other questions are relevant. These questions should be asked first. Consider the use of checkboxes instead of yes-or-no questions. You may also want to consolidate multiple yes-or-no questions into a single multiple choice. You may also discover that several questions are duplicative.

Return to the spreadsheet. Create a new tab titled “Variables.” Begin with an inventory of your current questions. Group them into dialogs and topics. Then put them in a logical order. At this point, you have a key decision. Do I use the current variables, or do I create a new set of variable names using best-practices? Under the first option, you need to identify and eliminate duplicate variables (i.e., same question but different variable name). Once you see the question grouped into dialogs you may want to change them. Keep track of all the changes, including the variables you need to replace or eliminate.

Under the second option, you have a real chance to improve the user experience. Define new questions using the prompts from the old system as a starting point but new variable names. The best practice would be to name the variable with a prefix that identifies the dialog where the question is placed and a suffix that identifies the data type. Further, the names should allow related questions to be grouped alphabetically. By way of example, LEND Name First TE would be a text variable on the Lender dialog. LOAN Interest Rate Initial PCT would be a number variable on the loan dialog that asks for the initial interest rate. The name of the variable thus tells you where in the interview the question is to be found and what type of data is called for in the answer.

For both option 1 and option 2, you will want to create a bridge between your old questions and your new questions. Simply add a notes column to your spreadsheet where you track your change instructions. Put in the names of all the old variables or the ones that need to be changed because they are duplicates.

I Always Have to Fix My Documents

One of the biggest complaints I hear when people engage me to fix their document assembly programs is “I always have to go in and fix the document.” This means they need to fix line spacing, outline numbers, cross-references, justification, font size, tabs, headers and footers, pagination, etc. With a properly designed Word template, this extra post-assembly time should be eliminated.

The key to creating consistent good-looking templates is combining Microsoft Word styles, defined outline numbering, and automatic cross-references with proper variable and rule placement. A Word style is a predefined combination of font style, size, line spacing, and justification that can be applied to any text in your document. It can be saved under a predefined name and attached to a shortcut key the same way as a Word macro. Setting up proper outlining will allow you to both restart list numbering and fix auto-numbering when you use conditional logic to insert or remove new paragraphs. Templates can be enhanced by using document assembly building blocks like an insert template to handle customized letterhead, captions, signatures, and notaries.

Just as we build a master template for the content of the documents, we also build a master stylesheet at the start of a project. The stylesheet contains examples of all the different paragraph, outline, and numbering formats used throughout the entire set of documents. Look at all your master templates—I guarantee that there are multiple variations of paragraph formatting and numbers across each template and sometimes variations within a single template. Unless there is a good reason for these variations, you want to simplify and standardize these documents. You do not want the style for all text to be “Normal.” Group the examples on your style sheet into body styles and outline styles. Assign names to the style for each outline level. Figure out the exact amount and type of indentation for each level of the outline. Decide whether certain levels of the outline should be bolded or underlined. Review each of your master templates until you have created styles for all documents.

When you are done, use a copy of the stylesheet as the starting point for each new template. With the styles in place, delete the example text and replace it with the text of the document you wish to create, pasting in the text without any formatting. Then go through the document and apply the appropriate styles to the text. A more consistent styling will also allow lawyers to create a package of templates with correct styling and numbering across several templates at a time.

Stepping Up Your Game

Many legal transactions require multiple documents to be produced. Using document assembly software, you can create a shell template that contains instructions to insert designated templates into the main template at run-time or to assemble a collection of individual documents with a single interview. For example, if you are putting together a loan transaction, you will need a mortgage and a note. Depending on the type of borrower you may need different certificates and authorizations. You can use the system to recommend which documents are required for the package. You can then add questions for optional documents to round out the remaining documents required to complete the transaction. Planning a document package allows you to create all the documents with a single interview. If you make a mistake answering questions, you just re-run the package.

With the right document automation system, you can resolve the more difficult drafting issues. For example, if you know the commencement date and the term of a loan, you can calculate the late payment date. If you have co-guarantors, rules can adjust all the verbs to plural. If you know the principal amount of the loan, the interest rate, the term of the loan, and how the interest is applied, you can produce an amortization table listing the monthly payments and the allocation between principal and interest for each payment. In the template, you can use formula variables to handle the complex logic that you need in multiple places. If you can think of a rule, it can be done. Use Word comments to annotate your template with your wishes and then reach out to a consultant to build it for you or go to Google and see if someone has posted a solution online.

Start from Scratch or Rehab?

The techniques we have covered in this article work whether you are currently using merge templates or have worked with a document assembly system. The hard work is mostly done; you have identified the legal text you need and many of the rules that would be put into an online questionnaire. If you do not like any of your current legal language, you may want to start from scratch. Look at your current transactions and choose one as a model. In this case, you would use your current automation system to get an inventory of questions and ideas for dialogs. If, however, you are happy with most of the legal language, we recommend a rehab. The bones of the system are a good starting point. You may just need to knock down some walls, add some new electrical lines and plumbing, and refinish all the surfaces.

Most document assembly offerings are now on a subscription model. You pay monthly or annually for the software. In return, however, you get technical support, web hosting, and a stream of improvements. If you decide to go online, you will need to make some adjustments to your current document assembly templates for them to work. Most of the changes, however, will be to the interviews. The interview needs to be well-organized and clearly written. Use your junior associates, law clerks, and paralegals as your Guinea pigs. Once they clearly understand the questions, try the interviews with a few clients. The result will be better documents and more accurate answers. More client engagement and satisfaction will certainly help the bottom line. Now is the time to think big and build the infrastructure to expand your volume and rehab the home to make it one of your dreams.

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Seth Rowland

Technology—Property Editor: Seth Rowland (http://www.linkedin.com/in/sethrowland) has been building document workflow automation solutions since 1996 and is an associate member of 3545 Consulting®. Contributing Author: Rose Rowland, an associate member of 3545 Consulting®.