Document Assembly and Automation: Making Easy Things Easy

By Wesley Todd | October 27, 2014

Series Summary

Insurance executives should be asking a lot of questions right now. They should wonder why their outside law firms haven’t adopted available technology that could eliminate exorbitant expenses for routine legal work. They should ask their outside law firms why, despite taking in millions of dollars in legal fees each year, they have not invested a penny in creating predictive analytics tools. They should also ask their outside law firms why they begin each and case as if it was the first of its kind.

In the series Digitizing Claims Litigation: Providing Insurers with the Power and Control They Deserve, I will share what I have learned while developing my insurance litigation management software. To build it, I studied project management, document automation, knowledge management, predictive analytics, alternative fee arrangements, and transparency. While other industries are thriving using these systems, the insurance defense legal industry has visibly lagged behind.

If the various parties in this industry can come together and apply these solutions to insurance litigation, we will all benefit. Find out why in Digitizing Claims Litigation: Providing Insurers with the Power and Control They Deserve.

I have an offer you cannot refuse:

For the next ten years, I will draft the same documents over and over but make slight tweaks here and there to make sure you know I am paying very close attention to your case. Although I may be able to save you some money on a few of the documents, I will still charge you to find the template, format it, make some modifications, have my supervisor revise it, and have you review and revise it. I will not guarantee that the document has any value to you or your company. I will not provide any metrics to show you the value of the document. In fact, I may not even file it! I will send you thousands of pages of documents over the years. You will review them. I will send you a bill sixty days later. In exchange for these services, you will pay me $150 to $200 per hour. By the end of the year, I may charge you $300,000-$400,000 at that rate! After a few years, I will be a millionaire!

Whether you like it or not: If you are an adjuster, attorney, or claims supervisor who handles homeowners insurance lawsuits, then you likely entered into a quasi-contract with these terms a long time ago.

I have good news for you. This quasi-contract that you entered into has no defined term. You can cancel whenever you want. When you are ready, you can demand greater efficiency by using a tool that has been around for decades – document assembly software.

Further, you cannot blame the law firms. Even if one firm adopted these tools, none of your other outside firms would gain any benefit from it, and each firm would continue to have to draft each of these documents “from scratch.” In other words, to reap the benefits of document assembly software, you must take responsibility for providing the platform and making it available to all of your attorneys.

What is Document Assembly and Automation?

Document assembly and automation is the use of computer software to create some or all parts of a document. It can be as simple as an automatic “find and replace” type function, or it can be a more complex system based on assembling parts of documents based on certain rules. A document assembly system can be built into a word processor, or it can be contained a web-based software program.

In the first article in this series entitled Litigation Project Management: Building Your Homeowners Insurance Litigation Skyscraper, I explained how homeowners insurers can change the claims litigation process to create a more efficient, predictable scope of work for defending a homeowners insurance lawsuit. Document assembly fits right into this approach. The primary way to streamline document creation is to gather best practices, standardize them, and make them easily accessible for each person involved in the legal document creation process. If all of a homeowners insurer’s outside law firms are armed with the best work product at the click of a button, homeowners insurers will see drastically reduced legal bills, as well as predictable and improved outcomes.

The Benefits of Document Assembly Software
  1. Document Assembly Software Saves Money

Document assembly saves the cost of a human performing the same work. This is a simple calculation: subtract the cost for human document creation from the expenses. If a homeowners insurer is paying someone one dollar per hour and insurer only spends ten hours per month creating documents, a document assembly system may not be worth considering.

By contrast, consider a document assembly system for a homeowners insurer with routine litigation. A homeowners insurer may be paying 40 attorneys $175 per hour each to spend 160 hours per month creating routine legal documents, a document assembly system could bring a huge boost to profitability. If the homeowners insurer has humans reviewing and approving that volume of documents, then do not forget to also add that to the unnecessary cost calculation.

Ultimately, depending on the amount of routine document production, a document assembly system can be the equivalent of a cash infusion directly to a homeowners insurer’s bottom line. As you can see, to optimize the value of document assembly software, you must select a platform that aggregates all of your outside law firms’ automated documents.

2. Document Assembly Software Improves Work Product for Repetitive Document Creation

A document assembly system can be more than just a time saver, it can be a strong quality control system. Take the homeowners insurer example above: of those forty document creators, there will be a few that produce legal documents with superior quality. Likewise, there will be a few that produce substandard legal documents. Moreover, regardless of the skill level, each will likely make a mistake or two in crafting such a large volume of legal documents.

Document assembly limits the potential for user error while maximizing the use of attorneys’ best work product. All system users can deploy the best excerpts created by the best attorneys. Further, each user can save his or her attention for those section of the document that require special consideration. By using a document assembly system that delivers the best work product and eliminates unnecessary tasks, homeowners insurers can drastically increase the quality of legal documents.

The Legal Industry’s Best Kept Secret

Although this article may have you thinking that document assembly is a form of breakthrough technology, you might be disappointed to find out that it has been available for decades. It is easy to see how document assembly saves money and improves work product. The obvious question is “why is my company not reaping the benefits of this obvious improvement?”

Since 1993, HotDocs has been providing document assembly software, and its background technology dates back to the 1970s. Eighty percent of the 200 largest U.S. law firms use HotDocs, as well as 20 percent of Fortune 500 companies.

That said, these statistics do not correlate with the legal bills sitting on the desks of general counsels. Although it has been nearly thirty years since document assembly was introduced to the legal profession, virtually every legal bill is inflated due to law firms’ use of archaic copy and paste techniques to draft legal documents.

As mentioned above, the law firms are not fully responsible for the implementation delay. Even if one law firm adopted document assembly, none of the other law firms would be able to capitalize on that law firms’ improvements. To have a truly effective document assembly solution, clients must provide the platform for each of their outside law firms to create, collect, and improve automated documents.

Building Your Document Assembly System

When homeowners insurers implement document assembly to their claims and cases, they will achieve the benefits of this optimized process, including:

  1. Decreasing loss ratios, which means increasing stakeholder profitability;
  2. Increasing the predictability of fees and costs;
  3. Minimizing surprises;
  4. Streamlining communications;
  5. Managing risk; and
  6. Engaging in continuous improvement of all of these systems by measuring results.

If these results look familiar, it is because they are almost the same results that occur when homeowners insurers achieve the larger goal of evaluating their claims litigation systems and applying Litigation Project Management. Although document assembly may be homeowners insurers’ most powerful tool using the Litigation Project Management approach, it is still just one of many steps that can be used to achieve better results while dwindling the costs to obtain them.

By following these steps, homeowners insurers build their document assembly system:

  1. Identify the homeowners insurer’s Foundational Library – the legal documents homeowners insurers routinely use in claims litigation;
  2. Schedule a half-day meeting for the general counsel and their best outside attorneys to create a Document Assembly Plan – a plan for creating standardized documents that meet the homeowners insurers’ and outside law firms’ highest expectations;
  3. Retain (or appoint from within) a Foundational Litigation Project Manager responsible for finding secure, web-based document assembly software to execute the document assembly solutions;
  4. Deploy the document assembly software system;
  5. Notify the department responsible for legal bill auditing regarding the homeowners insurer’s plans and the inherent new guidelines for legal bills; and
  6. Retain (or appoint from within) a Litigation Project Manager responsible for coordinating continuous improvements to the homeowners insurer’s Foundational Library.
image of Wesley Todd

About Wesley Todd

Wesley Todd is the founder of CaseGlide, LLC. Through CaseGlide’s Litigation Control System, Wesley is giving insurers the power to control their litigation costs and outcomes. If you have any questions about Wesley or CaseGlide, please visit More from Wesley Todd

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