Brendan Miller, legal operations advisor for practice innovation, and Troy Zander and Jordan Carr, partners with Barnes & Thornburg, discuss the typical process of drafting transactional documents and how new software tools can provide more predictability, greater efficiency, and other benefits – for clients and lawyers alike.
CCBJ: What are some of the greatest challenges organizations face when drafting transactional legal documents?
Troy Zander: First and foremost, the biggest challenge when drafting transactional documents is usually incorporating all of the relevant provisions and specific language that are applicable to each particular client. Every client has their own provisions, some of which are unique to them and some that are generic but tailored to them. It might have to do with choice of law and venue and jurisdiction, for example. Then the documents need to be tailored to the specific needs of the deal, the clients and, of course, the counterparties. While the client may have a preferred set of starting points for the documents, each deal itself is unique.
There are also provisions that are unique to the particular counterparty. We are able to manage this by maintaining version control of the documents. So, for example, when we send out our initial drafts and documents, and then we get comments back, we can make sure that those comments are incorporated and reflected in the next version of the documents. The key is to do all of this efficiently – to incorporate all of the relevant provisions, tailor the documents to the deal and the client, and maintain version control in a consistent and timely way.
Jordan Carr: Traditionally, law firms approached most transactional document drafting either with the client’s forms or those from prior deals that were similar in nature – or at least similar in scope. Typically it’s a lot of time-consuming manual drafting work: finding the right set of documents, finding all the things to change in that set of documents, knowing what the most up-to-date language is for those types of provisions, remembering what might need to change from that last deal to this one.
That’s been the traditional model for a very long time. But we’re trying to get away from that model.
Brendan Miller: Much of what Jordan just described is what in today’s vernacular would be called “knowledge management.” What do we know about this practice area, this client, this service industry? What has been our historical repository of information about the best clauses, the most appropriate language to use for a particular deal? In the past, the technology was more limited, which meant that it had to be this manual process. We are now able to leverage document automation to convert that manual process into document templates that reflect best practices and institutional knowledge—literally converting a document into a questionnaire that guides the user, efficiently gathers needed information, and generates a document tailored to the needs of the client or matter.
How has your firm embraced emerging software solutions to bolster transactional document drafting capabilities?
Miller: The reality is that as a law firm we are part of a broader service profession. A couple of the watchwords for our approach to embracing and integrating software solutions are “practicality” and “flexibility,” because at the end of the day, as a service professional, our job is to solve problems. For our clients, it’s about making their lives easier as relates to whatever legal challenges or opportunities they’re facing.
When it comes to document drafting capabilities, our firm started using document automation a few years ago on select matters. We started to dabble in automating templates that could be used to generate documents where there were either large volumes of documents or similar documents that needed to be generated on a repetitive basis. We’ve continued to grow that functionality.
In 2019, we added a document automation specialist attorney to our practice innovation team, to help us take our document automation efforts to scale. Bringing on board a document automation specialist who previously served as in-house counsel has been critical to our efforts, because she’s worked in-house with a client that was taking and building document automation into their own processes and into how they generated documents internally.
We have leveraged that experience and knowledge – and expanded on it to fit the ways that we are serving our clients. Document automation is one example, and we continue to look for other opportunities to expand our usage of existing and emerging tools and software solutions to enhance document drafting and the entire legal document lifecycle.
How do you ensure that document automation processes and technology align with a client’s business objectives?
Carr: Most clients are looking for predictability, consistency and, of course, a high level of service. But efficiency and cost considerations are also extremely important, and the ability to automate documents and not spend so much time manually drafting and going through that entire process really, really helps. In my practice, it increased efficiency noticeably right away. The more we do it, and the more people are familiar and comfortable with the process, it’s going to increase efficiency even more. And that really allows us to provide very good alternative fee arrangements that are predictable for the client and profitable for us. Now we have a higher degree of certainty about what it takes to draft certain documents and to do a deal. It’s been a great addition to my practice, and I think others would agree.
Zander: I would add that there is no doubt that our goals around document automation are aligned with our clients’ needs. My team and I are focused on the representation of lenders as they lend principally to technology and life sciences companies, or to the venture capital and private equity firms that support those companies. Most of those lenders have their own prescribed set of loan documents, and many of the money center banks, and even some of the non-money center banks that are engaged in syndicated credit transactions, maintain a repository of their preferred or master forms and documents. Part of the reason they do that is because they recognize that there are efficiencies in doing so. So there’s no doubt in my mind that my clients’ interests are absolutely aligned with the goals of document automation – namely efficiency, cost-effectiveness and predictability.
What else would you like to share with our readers?
Zander: I’d say the best thing we can do is share information and learn from one another in terms of best practices and, frankly, best products, so that we are all delivering the highest quality, most efficient and most consistent work product to our clients.
Carr: My advice for anyone looking to do this kind of document automation is that it does take some investment of time and effort to get the documents set up, but it’s well worth it. The investment will be realized as long as you stick to it and actually finish it. In these busy times, saving a few hours, or even a few minutes, on every deal can have a noticeable impact on any team’s well-being.
Miller: What strikes me is that the use of new and emerging technologies in this space really provides an opportunity to collaborate directly with our clients and understand our clients’ services and businesses on a deeper level. We’re building something together, and it’s not just a single transaction – it’s about building business opportunities and really building a relationship together.