The Exari Blog

Anatomy of a Document Assembly Blog

2010-03-11T11:45:00.002-05:00

A colleague recently shared this wordle of The Exari Blog and it got me thinking. As the de facto editor of the blog, it contained information that I found very interesting. For one thing, it reaffirmed to me that we are sticking to the issues we think most interest our readers – please correct me if I’m wrong.

"Word Documents" and "numbering" jump off the page, and since these are the underpinnings of legal document assembly efforts, were not surprising to see. Prominent themes included document automation, contracts, risk, and other ideas that you would also expect from a document assembly blog. But there were some other interesting insights. For example, why is Martin the only author to appear, when in fact Andrew is the most prolific?

Clearly we are writing a lot about Microsoft Word, and those posts tend to be well read, especially The "Word Styling" Ward of the Asylum and The Perils of MS Word. Then there are the more provocative posts which tend to be written by Jamie. We know people enjoy them, but they are also particularly well read since like Death by Laptop and How to Waste $34 Billion in Homeland Security they are referenced in Wikipedia.

So getting back to Martin. Why was he the only author to appear? Perhaps because his posts are the sexiest? Please tell us which type of post you most like to see here. We’d love your suggestions for topics, or if you prefer to write it yourself, invite you to guest author a post. You can share your ideas in the comments below, or contact me here. Thanks for reading. And thanks to Jeremy for the Wordle!

Numbers Don't Lie

2010-03-04T10:29:00.009-05:00

THE RESULTS
The 2009 results of the AM LAW 100 describes a scenario of double digit revenue decreases for the majority of firms. The good news is that revenue per partner and profit per partner did not fall at the same precipitous rate. The bad news is that these measures were largely managed primarily through headcount reduction, compensation cuts, and fewer lawyers achieving partnership status. Adding to this bad news is the emergence of the alternative fee revenue model, the pressure on law departments to cut their external legal spend, and a general downturn in the economy.

THE BOOM BUST CYCLE
Law firms can choose to try to manage the boom-bust cycle by their traditional means; controlling headcount and compensation. Yet managing human capital is not the same as adding more machine capacity to an assembly line or more memory capacity in a computer; changes in headcount create disruption in the form of lack of continuity with clients and colleagues, not to mention training and cultural issues.

THE LEGAL ASSEMBLY LINE
A core process in delivering legal services is assembling data from various sources, making sense of it, and codifying it into a finished product such as a contract or some other legal document. Raw data can flow from case management systems, knowledge management systems, other inside and outside sources, and from the human capital within a firm. The finished product often then flows to various approvers and ultimately into a repository or case management system. Thus the “assembly line” for delivering legal services includes people, systems, and raw materials which can all benefit from the use of technology.

THE SOLUTION
Top performing companies have adopted technology as a permanent way to manage costs, create efficiency, and improve speed. For law firms, document assembly technology enables the construction of a contract or document to move from a purely manual environment to an automated environment and, much like the assembly line did for manufacturing, document assembly enables the production of more finished contracts per unit of labor and improved quality.

BENEFITS TO LAW FIRM EMPLOYEES
Document assembly technology enables current employees to take on more work in a more intelligent way, creating more time to work on higher value legal issues. This heightens employee morale and creates a more stable and predictive cost structure. Also, the use of technology contributes to a firm’s ability to stay competitive, to improve the profitability of various legal business processes, or perhaps even dominate various areas of the law; especially where the production of high volumes of predictable yet complex documents is required.

In these uncertain times, using technology will help law firms mitigate the boom/bust hiring cycles and provide permanent efficiency, quality, and employee morale boosting benefits. Do you agree?

This post was authored by Lowell Moritz, Exari VP of Account Management.

The "Word styling" ward of the asylum

2010-02-25T11:08:00.003-05:00

At Exari we take Microsoft Word styling seriously. Your documents depend on styles not just to look good, but also to remain error-free. With templates, it's garbage in, garbage out. If templates aren't well styled, then the documents you create from them are at risk.

The importance of good styles
Properly styled contracts, letters and other documents ensure:

Your outline numbering remains intact, and updates correctly when changes are made
Cross references and tables of contents are automatically generated and maintained
Changes to branding and look-and-feel can be implemented quickly
It is easy to retain a consistent look-and-feel across related documents

That's why our training classes always include a segment on getting styling right in Word.

Outline numbering - Word's problem child
As anyone who's ever drafted legal documents knows, Word outline numbering is a minefield. This is because Word tries to hide complexity from its users - and outline numbering is unavoidably complex. As Word styles guru, Shauna Kelly puts it, "You seem to go round and round in circles, and never end up with what you want. And just when you get close, it falls to pieces."

It's essential that you use styles for outline numbering. Otherwise, you'll end up spending years of your life fighting Word. (Unfortunately, even when you have set up your styles '100% by the book,' there are still some risks. This last week alone, we've found three new bugs in the way Word's outline numbering handles particular scenarios. Trying to report these issues to Microsoft is worthy of another blog post...)

Conclusion
Any organization serious about streamlining document production must invest in Word styling capabilities. The upfront effort in 'getting it right' will be repaid many times over in the long run.

Have you discovered any tips or tricks that help with outline numbering? Please share in the comments below.

This post was authored by Justin Lipton, Exari's Chief Technology Officer.

Legal Departments Must Modernize

2010-02-18T11:29:00.019-05:00

In today’s economy, companies are continually challenged by three major issues: Complexity, Dynamics and Speed. It is important to manage these challenges successfully in order to remain a top-performing company. Part of meeting the challenge includes the focus on long term success versus short term gains. It requires a way of thinking outside the box (executing against the trend) and a review of old habits-- how things have been done versus how things could be done.

Looking at the legal departments of big international corporations, it is astonishing that legal experts in most companies still tend towards old habits of manual legal contracting and over-managing operational details. These habits include slow contract creation (e.g. by cutting & pasting word documents) which is time-intensive and error-prone.

On the other hand, top-performing companies have modernized a huge part of their contracting process with automation, gaining various benefits; especially time (speed), which they can use for higher complexity or bespoke deals. Automating the contracts process can help corporations meet all three of today’s challenges.

Complexity
Business terms and conditions are growing in complexity. One way to address this is with a more intelligent precedents system, which gathers your precedents and clauses in a central place where you can find them without wading through a sea of confusing examples and captures extra knowledge in each precedent.

Dynamics
Document automation software allows companies to capture, manage and analyze all of the information in their contracts. How many are outstanding and when do they expire? How many contracts need to be renewed next month? Having the information at your fingertips allows you to adjust quickly to changing dynamics.

Speed
While agility is important, speed can increase errors. Automation allows you to increase your speed and DECREASE your errors. You can lower your drafting costs and speed up your response time.

Again, thinking outside the box is needed as well as the ability to modernize and embrace technology where it makes sense. No doubt about who will survive and thrive in the long run.

This post was guest authored by Christian Hostmann, Exari Systems GmbH, Munich. Christian is Exari's Director of Sales for Europe.

Document Assembly is ... SEXY?

2010-02-11T10:35:00.002-05:00

And the Academy Award for the best Document Automation Technology (for the fifth year in a row) goes to …Exari

Thank you Gwyneth, thank you Brad - wow this is great. You dream of these moments but never really think its going to happen, but here we are and, well, I’m lost for words. I just want to thank some of the unsung heroes behind the scenes that have made this all possible……

…. And then I wake up.

OK, so Document Automation isn't the most exciting thing in the world and it’s hardly going to keep the attention of the person you’re trying to impress at a dinner party, but we think it’s important.

Making key documents more accurate and compliant while producing them faster and consistently anywhere in the world is all very well but it’s not exactly SEXY.

Contracts only really matter when something goes wrong and they are dissected in Court. It’s hard to explain to your boss that implementing document assembly has saved a fortune in legal costs because you are producing tighter contracts because he’ll say “that’s just your job”.

We’re never going to experience the thrill of a Top Gun sortie or hold someone’s beating heart in our hands but we have found a way of making what we do more exciting – by making our customers more money.

In the Insurance industry there is a constant drive to produce new products and get them to market ahead of the competitors to gain first mover advantage. There is a finite (albeit enormous) amount of Insurance premium to go around and in a soft market phase there are lots of hungry mouths to feed. Underwriters and Brokers need to constantly seek ways to help new clients buy more from them and retain the clients they have.

Modern Document Automation technologies are enabling products to be created from scratch, in a fraction of the time it had. Traditional ugly, client unfriendly Wording plus Endorsement Policies are being replaced by dynamic documents that are specifically tailored to each customer. The result is an unambiguous product that is clear and concise. Add to this an improved renewal experience for the client where they only have to amend last year’s answers and you have established a happy and loyal customer.

We are making it easier for clients to submit their proposal information, providing them with a better product and ensuring they stay customers of our customers.

That is leading to more premium, more commission and better bonuses… now that’s sexy.

This post was guest authored by Martin Kett, Exari's Vice President of Insurance Client Development. Martin expects Exari to win the first Oscar ever awarded for best performance by Document Automation software.

Continuous Improvement and Solvency II in the London Market

2010-02-04T10:44:00.022-05:00

The London Reform Group just released their review of 2009 and plans for 2010. The key theme of the letter to CEOs from Chairman Barnabus Hurst-Bannister, is that progress has been made on key reform matters, but that “We are now engaged in the sort of continuous improvement exercise that all markets must pursue or risk being left behind by their competitors.”

The thing about market reform is that it needs a great deal of quiet persuasion and work behind the scenes to move firms forward – so these things take time.

Solvency II, an EU statute, has a different effect. While reform tends to be non-mandatory, Solvency II will hit the industry hard with fines and worse, loading to capital if a firm fails to provide the relevant controls and cross-checks demanded. So every CEO, CFO and COO is going to have to make sure their organization is up to the job.

Make no mistake; Solvency II will get priority when it comes to demands on managers. But there are a number of requirements embedded in the legislation, especially in the Operational Risk area, which will not only hold good for the “solvency inspectors” but also provide impetus to the Market Reform program.

Let’s look where this overlap may occur. Essentially, insurance is the promise to pay the valid claim of an insured when covered by the policy documentation. The reputation of a firm can be tarnished when claims payment records are poor or slow. As noted by Hurst-Bannister, progress has been made by London in speeding up claims payments but there is still more to do in ensuring that the wordings that represent the promise to pay, are what all parties thought they were agreeing.

From an Operational Risk perspective, is the price of the risk that was agreed actually represented by the final policy document? Time and effort is spent by brokers and carriers to ensure the alignment of price with risk and then represent that in wording that will stand up to legal scrutiny. BUT whereas the Market has improved the way underlying risk data is transmitted electronically utilizing ACORD standards, the actual final documentation is invariably handled in word processing that leaves it open to mistakes, typos and other failings.

So what can be done to improve this potential operational risk? A major step forward is to introduce a smarter approach to documentation. What if you could combine the best of all worlds – take the data and the words and represent them in a re-usable and ordered manner? You can, using XML, better known as the underlying “language” of the ACORD message set.

Imagine being able to capture all the changes to clauses, coverages and data in a policy and be able to report on who changed what and when. Brokers can flag changes to market clauses, so compliance officers can look at exceptions rather than every risk. Underwriters could receive an ACORD message with all the structured data AND a message containing the tagged text from the slip enabling them to handle exceptions in a more granular way.

Even if a carrier was relying on word processing to reflect changes back to the Broker, document assembly systems could reconvert the Word document and highlight changes to continue the process back in a controlled fashion.

And when the inevitable claim comes in – a quick scan of the record would indicate any non- standard clauses and route the claim through a different track for handling, leaving the standard policies to go through fast track claims processing. Once documents are created in XML, this type of process improvement is easy.

So why not add a review of your documentation processes to this year’s plan and tackle both Market Reform issues and position yourself for the Operational Risk aspects of Solvency II?

This post was guest authored by Geoff Maskell, Exari's Vice President of Sales for Europe. Geoff focuses primarily on Exari’s Insurance and Investment Banking clients.

Bankers: Forget the Regulators, Focus on Risk

2010-01-27T09:31:00.007-05:00

Last week there was a sell off of Wall Street and Banking stocks because the market fears that new Obama-administration regulation and oversight is going to reduce revenue and profits. The Wall Street Journal tells the sell-off story (New Bank Rules Sink Stocks) and the looming political battle (Obama vs. Wall Street) in case you missed all the fun.

With President Obama turning up the political heat on Wall Street, it's clear that change is coming, one way or another. But predicting the exact form of that change is no easy task. Will it be new levies on big banks? Will it be forced break-ups? Will it be salary and bonus caps? Will it be some other cocktail of regulatory intervention designed to outlaw whatever high-risk activities are out of fashion with lawmakers from one month to the next?

Nobody really knows.

About the only thing you can bank on is that taxpayers won't tolerate a system where public funds are used to underwrite the high risk activities of private banks. Which means politicians won't stop meddling until this moral hazard is cured.

So what's a banker to do in the meantime?

Despite all the regulatory uncertainty, there is one thing that all banks can do right now: improve risk management.

This can take many forms, but an obvious example is through a smarter approach to documentation. What can you do to improve visibility into your portfolio of derivatives contracts (ISDA Masters, CSAs, Structured Notes, and the like) so that you know more about where you might be exposed? If you don't know which contracts are affected by a ratings downgrade trigger, and what the impact might be on your liquidity, how can you manage the risk? What can you do to ensure that future transactions include the best legal language for protecting the bank's position in a liquidity crisis or where a counterparty fails to meet its obligations? What systems can you put in place to ensure that the contractual risks of a deal are not disproportionate to the revenue upside.

By implementing smarter systems for creating and managing derivatives, lending and securities documentation banks can benefit in three ways:

1. The risks buried in existing contracts are more visible, and thus can be managed before they become a problem.

2. A much tighter approach to risk management can be built into all future contracts.

3. As regulators demand more data and reporting on risk management, the cost of complying with those demands will be much lower.

For all these reasons, we think automated document creation or document assembly is a very smart investment for Wall Street firms right now. What's not to love about cutting risk and cost at the same time?

What you don't know can hurt you

Updated: How to ensure your document assembly project fails

2010-01-25T10:00:00.000-05:00

As with all IT projects, there are a number of sure-fire ways to send a promising document assembly initiative off the rails. And that's regardless of how good the technology is.

So, what can you do to turn a great idea into an unmitigated disaster?

Don't tie the project to a pressing business problem

The technology's cool. (Company X implemented it and they love it.) Plus we've got 'use-it-or-lose-it' budget we have to spend. We don't need everyone to agree upfront what success will look like. We'll find a business problem to solve along the way.

Skip planning

Clarify the problem? We don't have time to do all those workshops and all that analysis stuff. Everyone's way too busy with their day job. And the users don't know what they want anyway. Better to leave them alone. We'll just make some assumptions.

Encourage scope creep

It's good to keep adding things as people think of them. No need to get hung up over importance or competing priorities. The more features the better. Usability's overrated.

Avoid change management

Of course we want people to use the system. But, we're running out of budget. We can't waste time listening to them complain that nobody spoke to them. This is the way it's going to be. They can like it or lump it.

Don't seek executive sponsorship

The executives don't get it. Better to fly under the radar and then show them what a great job we've done once we've finished.

Update: Boil the ocean

A phased approach? That's for wimps. We're going to tackle everything at once. That way we'll be sure not to miss anything important. (Thanks to MAC for that tip.)

It really is the case that "the soft stuff is the hard stuff." If your project doesn't have capable, motivated team members backed up by strong stakeholder support, it doesn't matter how good the technology is. The initiative will fail.

Why Complexity Matters

Wanted: Guest Authors on Document Assembly and more

2010-01-14T09:30:00.000-05:00

In the coming months, you're going to see posts on this blog from some "new" authors and hopefully, welcome back some old ones. We took a look around the company and realized that we have a lot of experts with varied areas of specialty within Exari.

The blog will continue to focus on document assembly, contract issues and various types of document automation, and will include more industry-specific posts. For example, just within Exari we have experts on banking, insurance, sales, legal, financial services, professional services, IT and communications, to name some.

In an effort to be as robust and useful a source as possible on these topics, we invite you to propose articles you would like to see here or those which you would like to submit for publication. We look forward to hearing from you either in the comments below or by email.

To get an idea of the type of content we are looking for, check out these posts:

Time for Banks to Innovate? and What you don't know can hurt you.

And, if you want to see which industries are most relevant, visit our Solutions Section.

The billable hour debate rages on

2010-01-12T09:30:00.000-05:00

A recent General Counsel Roundtable (GCR) analysis found that the best ways to control external legal spend are (in order of effectiveness):

Fixed fees (a set fee "for all work in a given subject area for a period of time")

Risk sharing (bonuses/holdback for successful/unsuccesful matter completion)

Flat fees (a set fee for a particular matter)

In other words, to manage costs law departments need to align fee arrangements with desired outcomes rather than with law firm inputs (billable hours). Common sense? Apparently not.

It's certainly not how law departments pay for most of their external legal work.

The 2009 Altman Weil Chief Legal Officer Survey found that nearly three quarters of law departments reported that 10% or less of their legal fees were non-hourly. (There are exceptions of course. 30% of Telstra's legal work is not based on time [full disclosure, Telstra is an Exari client]. Pfizer wants 75% of it's 2010 legal spending to be fixed fee. And Comcast is asking its outside lawyers "to do more to jettison the traditional hourly billing rate.")

So, if the market for legal services is competitive (which I think it is) and large law departments have purchasing power (which they do at the moment), why is so much external legal spend still time-based?

I think the reason is best captured in Can Lawyers Live in an Approximate and ‘Good Enough’ Universe?, a fantastic blog post in which Ron Friedmann argues that lawyers are uncomfortable with approximations. Lawyers have grown up with time-based billing. Time can be tracked in a very precise manner. Outcome-based billing, on the other hand, requires estimates; scary stuff for risk averse, perfectionist lawyers. And don't forget that 90% of in-house lawyers started in private practice, which means their "general view of value is based on perceptions developed within law firms."

As I've said previously, the move away from time billing will be a slow process. Not because it is inherently complicated, but because it requires significant change. In mindset more than anything. Steven Levy put it best in a comment he made on AFAs (alternative fee arrangements):

"Underlying fixed fees – and most AFAs – is the requirement that law practices 1) understand how they do the work they do and then 2) approach it with a plan not just for the legal issues but for how to do the work itself."

While these capabilities are well established in other industries, they are still new concepts in the practice of law.

Related Posts:
Alternatives to the billable hour...revisited
Bye-bye billable hour
Innovate, commoditize or retire?

How to gain competitive advantage from your sales contracting process

2010-01-07T10:00:00.002-05:00

Sales contracting is an example of a cross-functional business process; one that involves multiple departments, often in different business units with conflicting agendas (and separate budgets). Sales will do whatever it takes to close the deal by the end of the quarter. Pricing's sole focus is on profit margin. And Legal needs to avoid risk. Meanwhile, no one's responsible for the end-t0-end process.

Because it cuts across functions, sales contracting causes pain for a lot of people in the organization. The corollary is it provides sustained competitive advantage for the few organizations that are able to fix the process.

So, how then can you turn sales contracting from a pain in the neck into a source of value?

1. Focus on a larger, overriding mutual objective

The first step is to identify a shared goal to get the various stakeholders pulling in the same direction. Consultant, Bob Henry, describes his approach in his article A Mission Statement for Sales Contracting: Close Contracts Quicker!:

"So, my challenge was to determine how I could meet the needs of the CEO, Sales, and Business Division leaders (and other stakeholders-Legal, Finance, Engineering, etc.). The first step was to create a mission statement for the CM [Contract Management] Team which was “to close contracts on a timely basis while at the same time caring for the interests of the company”. In order to achieve our mission we had to identify process improvements that could reduce the contract cycle time, while “not giving away the store."

This doesn't mean abandoning departmental priorities. Rather, the aim is for everyone to view them in the context of the overall corporate objective.

2. Get strong executive support

This is critical. And it's often hard. According to the IACCM Contracts as a Source of Value report (accessible at the end of a blog post on the issue by Tim Cummins), most executives feel that contracting "is a necessary evil." However, the report also provides a good counterpoint:

Lou Gerstner, former Chairman and CEO at IBM, was one of very few top executives who have seen contracts as fundamentally linked to brand image. He believed that good contracting – especially in a solutions and services world – confers competitive advantage. His support led to extensive re-engineering of the contracting process at IBM and is reflected today [in] the company’s leadership in both negotiation and contract management.

More than anything else, the level of (real) executive sponsorship will determine the success or failure of the initiative.

3. Start small

You need to start by working with a small group of people who share the vision. Your first phase should focus on a small, well-defined sub-process (such as a particular type of sales contract).

You will need to make decisions about approved contract wording, fall-back positions, risk weightings and approval processes. This is the key to accelerating cycle times without increasing risk. Once these are bedded down, you can use document assembly systems like Exari to automate and further reinforce the process.

4. Iterate

Now it's time to 'rinse and repeat'. Showcase the results of the first phase to get broader buy-in for subsequent phases.

Fixing your contracting process involves change. Don't underestimate people's resistance. You need to invest time and effort to reduce that resistance to a minimal, manageable level. It takes time for people to adjust to new situations. There are no shortcuts.

Results

According to the IACCM Contracts as a Source of Value report, companies that have taken a strategic approach to contracting have enabled greater efficiency and effectiveness in their contracting process:

They offer terms that are appropriate to the desired relationship. This does not mean that negotiation frequency has increased – in fact, the opposite is true. These organizations are selective about when they want to negotiate and then ensure that the topics for negotiation are productive. For agreements where there is no negotiation, they ensure that standard terms are appropriate to the desired outcome.

Isn't it time you improved your contracting process?

Sales Contracting Webinar

Download our free webinar to learn how Dow Jones and DLA Piper have reduced time and expense by automating their sales contracting.

Top 10 Reasons to Automate Your Contracts in 2010

2009-12-31T09:10:00.000-05:00

In this, our final post for 2009, we'd like to wish everyone a Happy New Year and share with you the top 10 reasons to automate your contracts in the coming year. By automating your contracts process you can:

Reduce the risk of using non-standard or incorrect contracts, templates or language
Reduce the expense involved in creating contracts
Decrease the time it takes to create and negotiate the contracts on your paper
Increase compliance with policies and procedures
Globally update your templates and language once and immediately for everyone in your organization
Spend time on high value business instead of creating and reviewing repetitive, mostly standard contracts
Rate your contracts according to their value to your organization and incent your business people to create great contracts
Create contracts through a browser so you don't have to worry about supporting or maintaining a desktop application
Integrate your contract automation with CRM, ERP, and other systems so you only input data once and capture everything at the end
Optimize your contracts with the most favorable business terms for your organization

So there's our parting wisdom for 2009. Did we miss any good reasons to automate the contracts process? Please let us know in the comments below.

Three reasons to have a post [Software] implementation project

2009-12-24T09:54:00.001-05:00

I recently read a post on TechRepublic by Jay Rollins which said that within six months to one year after an initial software implementation project is complete, there is always a need for a second project to address opportunities that arise from the original implementation.

I agree with Jay that a post implementation project is an excellent process by which to find additional opportunities not covered in the original implementation. For our document assembly clients, we find that they benefit from added value uncovered during this process.

I'd like to add two additional thoughts to Jay's thesis as to why to undertake such a project.

One of the first reasons is "the law of unintended consequences;" for example, if one particular department within a company was the driving force for the implementation (let's say the legal department) of a new technology or application, it should be noted that this is only one cog in the overall process or value chain. Legal may touch areas including sales, production, risk management, procurement, finance, and human resources; and the technology they implemented could have unintentioned (read; "beneficial") consequences to many other departments. In fact, these benefits may be greater outside of the original department that mandated the new technology.

Another reason is money. Often, initial projects are limited in budget with most of the budget being spent on the technology. After 6-12 months, an organization can much more easily "wrap its head" around how to make a new technology even more of an "exact fit" for their particular use and, more importantly, can quantify the benefits or the ROI of an add-on optimization project. These benefits could include deeper integration with front end and back end systems, application customization, enhanced training, roll out to other departments, and many other substantial benefits.

Have you been a part of a post implementation project? Please share your experiences with us in the comments below.

This post was guest authored by Lowell Moritz, Exari's VP of Account Management. Lowell runs post implementation projects for Exari clients.

Document Assembly Solution: How to Decide Build Vs. Buy?

2009-12-21T09:04:00.000-05:00

OK, everyone now agrees; your current way of creating documents is broken (too slow; full of errors; impossible to maintain). So, how do you fix the problem? Do you build your own system, or do you buy something off-the-shelf? There are pros and cons of both approaches. But first things first; before you can make a Build-vs-Buy decision, you need to work out your requirements.

Requirements

You quickly discover that requirements gathering and analysis is hard. In fact, conflicting stakeholder expectations and internal politicking make this the most difficult (and important) part of any IT project.

(Click image to enlarge)

Even if you know what the pressing issues are right now, what about 6 months, 12 months or 3 years down the track? What about potential applications and requirements for other business units within the firm?

That's why smart companies spend a lot of time researching solutions. Specialist document assembly vendors have the experience and expertise to help you understand the sorts of problems other companies have solved and how they've done it. Once you've clarified your requirements, you can start investigating your options.

Building

This is definitely the way to go if your requirements turn out to be truly unique. However, you still need to be aware of the risks of building your own document assembly system.

IT departments love building things. It keeps them employed, challenged and happy.

It's not just the tool that needs to be built. There's support, maintenance and possible enhancements down the line. Don't underestimate the testing effort either. Exari document assembly solutions, for example, have had over 20 man years of product development, run thousands of test cases every day, and are the result of ongoing partner and customer collaboration.

On the surface document assembly may seem easy. As with any area of expertise, it's only when you dig deeper, that you understand that various document types and outputs (MS Word, PDF, Web) have their own specific and unique quirks. You begin to encounter these once you start building. Styling, cross references, numbering, headers, footers, tables and business rules all contain unique challenges.

A good end user experience is essential, and is only half the battle. Templates need to be updated and maintained. Without the right authoring tools, maintenance requirements can easily turn your project into a money pit.

If your project really is a "one off "with well known and defined requirements that are unlikely to change over time, then build it; but only if it makes sense economically and you have a well resourced, capable development team.

Buying

If it turns out that your requirements have similarities to those of other businesses, then buying is more likely to be the better option.

Assess various document assembly vendors and identify the features and functionality that best match your business problem. Take advantage of other customers having been through what you're going through. Use the document assembly vendors to help you to define tight business requirements.

Make sure the system can handle the hard stuff. At some point you will hit complexity. You need a stable, easy way to automate it.

Confirm that the solution you choose works and integrates with your other applications and infrastructure. Requirements change over time. Systems with flexible APIs that are based on open standards enable you to future proof your investment.

If the project is time-critical, remember that buying will be much faster than building.

Total Cost of Ownership

Ultimately, when making a Build-vs-Buy decision, you need to understand the total cost of ownership for each approach. That means factoring in all costs for the life of the project, including internal development costs, opportunity costs, ongoing maintenance costs, and integration costs.

For more information, check out Buy vs. build: Six steps to making the right decision. Have you been through a Buy vs. Build experience? Please tell us what you learned in the comments below.

This post was guest authored by Exari's Chief Technology Officer, Justin Lipton.

Update: Justin has done a Buy-vs-Build post for a more technical audience on the CIO website.

Inceasing Revenues: The Sales Department Business Case for Contract Automation

2009-12-10T09:59:00.000-05:00

I discussed the law department business case for contract automation with a focus on cost reduction. Now, I want to look at opportunities for the sales department.

In a 2007 report, Sell-Side Contract Management: Opportunity-to-Order Optimization[subscription required], the Aberdeen Group determined that the #1 reason for improving the management of sales contracts is to reduce revenue leakage.

Sounds like a good reason. But what does it mean in dollar terms?

Let's revisit Company X from the law department business case: the assumption was that Company X does US $10Bn in annual revenues, and the conclusion was that Legal could save over $1M per year by improving its contracting.

Now, we're going to look at Company X from the sales perspective. According to the Aberdeen report, on average:

67% of revenues are based on contracts (for Company X that's $6.7Bn per annum)

5-9% of revues are leaked away due to contracting problems such as incorrect charges, missed milestones, inconsistencies in pricing, transactional errors, and penalties (for Company X, that's $335M-$603M each year)

As with the law department scenario, the question is how much that $335M+ can be reduced. Again, I would argue that improving the process should be able to reduce leakage by 10% which, in the case of Company X, means additional revenue of over $30M per year.

Once again, the notes from the law department business case bear repeating:

Your mileage may vary: the above assumptions are, by definition, highly generalized. I'm simply trying to provide an example so you can decide whether it's worth gathering specific data to analyze your own situation.

The calculation excludes other potential benefits of document assembly such as reduced risk, faster cycle times, and improved client service, all of which strengthen the business case.

Ultimately, the goal is to improve the process across functions so that Sales, Legal, Pricing and other departments can work together seamlessly.

Cutting Costs: The Law Department Business Case for Improving Contracting

2009-12-03T09:24:00.002-05:00

In a previous post, I discussed the IACCM's finding that, in some cases, more than 40% of legal department costs are associated with bid and contracting work.

What then might a business case for automation look like? Below is a quick, back-of-the-napkin calculation.

Let's assume:

Company X does US $10Bn in annual revenues.
Total legal spend is 0.3% of revenue, or $30M p/a. (According to Rees Morrison, while actual TLS/Rev varies greatly within and across industries, 0.3% is a typical ratio)
40% of TLS - $12M p/a - supports contracting. (As per the IACCM finding.)

The question then is, how much can that $12M realistically be reduced? I would suggest that a 10% (i.e. $1.2M) annual reduction should easily be achievable for the majority of organizations that have not yet focused serious effort on streamlining their contracting processes.

To be sure, it will cost money to realize the potential benefits. But, even over a 3 year time horizon, I would expect a very strong return on investment.

Notes:

Your mileage may vary: the above assumptions are, by definition, highly generalized. I'm simply trying to provide an example so you can decide whether it's worth gathering specific data to analyze your own situation.
The calculation excludes other potential benefits of document assembly such as reduced risk, faster cycle times, and improved client service, all of which strengthen the business case.

Let us know your experiences with contracting improvement in the comments below.

The insidious nature of the billable hour

2009-12-01T09:38:00.018-05:00

From the You Cannot Be Serious! file:

"LAWYERS face a national crackdown on over-charging that could end the practice of billing clients for sending them Christmas cards and reading thank you notes."

This is the opening sentence in Over-charging by lawyers under scrutiny, an article in The Australian newspaper. Do some lawyers truly charge for these activities? Do they disclose this to their clients?

Hourly Billing 101

It's certainly true that lawyers are, in the most part, measured on their billings. You (usually) receive revenue for billable work (such as research, advice, drafting and negotiation on a matter); you don't for non-billable work (such as investing time now creating processes and systems that will enable you to do all future work more efficiently).

When accounting for every six minutes in their day, lawyers are constantly deciding (often automatically) whether an activity is billable or non-billable. It doesn't take long for new lawyers to conclude that billable work is 'valuable' (to the firm, not the client) and that non-billable work is ~~worthless~~not. Accordingly, the bigger the bill, the more valuable the work.

The Impact on Document Assembly

As noted previously, Exari has law firm clients using document assembly to great effect. However, there's no question that those firms are still viewed as innovators. A recent Twitter conversation captures the thinking about what's holding back other firms, as well as potential catalysts for change.

Ron Friedmann: @VMaryAbraham @jeffrey_brandt Outside investment via LRA in UK is likely legal IT game changer. eg, Widespread document assembly at last?
Jeffrey Brandt: @VMaryAbraham @ronfriedmann I agree outside $ investment is huge game changer. 2 get widespread doc assembly, u need to change comp formula.
Mary Abraham: @jeffrey_brandt @ronfriedmann To get widespread doc assembly, U need high volume low margin work . And, clients who insist on fair pricing.
Jeffrey Brandt: @VMaryAbraham @ronfriedmann I'll disagree w/U. In order 2 get widespread D/A U need lawyers updating rules, a tradtionally nonbillbale task.
Mary Abraham: @jeffrey_brandt @ronfriedmann Lawyers do nonbillable tasks, provided there is an immediate & obvious payback. Applies 2 document assembly 2.
Ron Friedmann: @VMaryAbraham @jeffrey_brandt D/A requires much non-billable 'knowledge engineering' hence need for outside capital. What lawyer invests?
Doug Cornelius: @jeffrey_brandt @VMaryAbraham @ronfriedmann The billable hour is the enemy of document assembly for law firms. You can't get a positive ROI.
Ron Friedmann: @DougCornelius Billable hour _is_ doc assembly barrier.... that's why PE investment in UK could change market.

Unsurprisingly, the billable hour was a big focal point.

What Next?

Even though clients and law firms don't particularly like it, they understand the billable hour. They know where they stand. So, I don't see it disappearing any time soon. I agree with Jay Sheppard's comment: "it's the end of the beginning. But there's a long way to go." That said, it will be interesting to see the impact of outside investment in UK law firms when that happens.

Where do you stand on the future of the billable hour?

Why Complexity Matters

2009-11-25T14:40:00.001-05:00

Einstein once said that everything should be made as simple as possible, but not simpler. And so it is with document automation. Everyone wants to make it as simple as possible. But anyone who tells you that it is simple (presumably by consuming whatever snake oil they are selling) is lying. Some document composition tasks are, by their very nature, highly complex, and some will make your head hurt. The challenge is to find the simplest and most effective way of dealing with them, so that you can fully reap the rewards of automation. Which begs two obvious question: what do we mean by complexity and does it affect your documents?

Yes, you do need to worry about complexity...

For present purposes, let's break complexity into three buckets: low complexity; medium complexity; and high complexity.

If all you ever need to do is some kind of mail merge or field substitution, where you feed in some names, addresses, products or prices, then you are dealing with low complexity automation. This is the home turf of "customer communications management", which, for the most part, means mass-mailing thousands of letters to thousands of customers, and making sure it says "Dear Bob" or "Dear Betty" at the top (this personal touch making Bob and Betty feel all warm and fuzzy). The documents might have some picky layout or branding, but the content is largely standardized and the variations are limited and controlled.

As you move from consumer (B2C) to business (B2B) transactions, where contracts are negotiated and paperwork is much less standard, you enter the world of medium complexity automation. In order to handle negotiated fall-back language in contracts, you need to support conditional logic, auto-numbering, dynamic cross-references, and page layouts that work no matter what combination of clauses ends up in the final draft. You also encounter repeating arrays of data, which is a fancy way of saying that lists of names, prices or products might need to contain 1, 2, 3 or 30 items. And because real people need to tailor each document to reflect the deals they negotiate, you have the added complexity of designing an intuitive, interactive, wizard (rather than simply pressing a button to run a batch process).

The final frontier is high complexity automation. We won't attempt an exhaustive list of the joys that await, but we will give you a taste. You may need to assemble not one, but 20 different documents, or a subset of those 20 documents, all from a single questionnaire, without ever asking a redundant question. You may need to handle deeply nested conditional logic, where you include some special compliance-related clauses only if you are selling pink widgets, manufactured in the third world, sold by your US operating subsidiary, and bundled with consulting services in the State of Texas (everything's bigger in Texas). You may need to generate documents that list repeating data (for example, a description of all the property you own and the value of each item), within other lists of repeating data (for example, all the locations where you do business). Or you may need to automate a set of documents that sometimes has two parties (a lender and a borrower) and sometimes has many different parties (4 lenders, 2 borrowers, and 3 guarantors). There's a prize for anyone who comes up with a cool-sounding collective noun that covers borrowers and guarantors as a single class.

Now, before you say "most of my documents are low-medium complexity", it's important to remember that what matters is not average complexity, but peak complexity. For whatever package of documents you need to automate to get a new and improved business process, ask yourself what's the most complex challenge in the most complex document. If this is a high complexity hurdle, then you will need to clear it to solve your business problem. This "peak complexity" is what really matters.

Which is not to say that you don't have choices about how you deal with peak complexity.

For a one-off, tactical solution, you may choose a low-cost tool which can handle some of the automation out-of-the-box, and pay for custom-coding to solve the tricky bits. Or you could simply automate the easy bits and tell your users to use a manual work-around for the rest. But these approaches carry significant risks.

Custom-coding is a rabbit hole which can get deeper and deeper as you stumble into one unexpected surprise after another. It also leaves you dependent on the programmers who cut the code, which can make maintenance and enhancements slow, expensive and in some cases impossible (for example, when the only person who understands the code moves on to other things). And manual work-arounds can be just the excuse users need to reject a promising new solution. Plenty of people hate change, and if a change is clunky they will gleefully use that to justify a return to their bad old ways. Manual steps also threaten the compliance, cost and speed benefits the solution was supposed to deliver.

For enterprises looking beyond the tactical, to the full range of document-intensive processes that can benefit from automation, it's important to make investment decisions with peak complexity in mind. There's great value in document automation. But if you don't have the tools to handle peak complexity, you may be leaving much of that value on the table.

How to Manage Revenue through Sales Contract Automation

2009-11-24T09:27:00.033-05:00

Marc Benioff, CEO of Salesforce.com, has a new book called Behind the Cloud- the untold story of how salesforce.com went from idea to billion-dollar company and revolutionized an industry. If you are interesting in how to grow a business, CRM, or SaaS, the book is worth reading. If you read carefully you’ll see how Marc talks about the exact problem that document assembly can help solve.

Companies with fast growth, complex products or complex contracts have trouble closing deals quickly. Perhaps just as challenging, is enforcing consistency in contracts to ensure compliance, reduce risk, and dictate how the company can recognize revenue. Benioff says,

“Our sales team was selling to the customer constantly. Because we were continually adding new users or innovating new products, it had become common to renegotiate the contracts and create new ones. That turned into an organizational nightmare for managing revenue, and the ambiguity that came from renegotiating made us susceptible to risk. We needed to find a way to define everything up front and standardize the way we did sales contracts. We had to negotiate all the future possibilities ahead of time to guarantee that we got the best terms. . .we instituted a series of processes, practices, and programs to help make us more systematic in the way we approached a number of issues. For example, our legal team began to monitor the acceptable degree of risk in customer contracts.”

With Document Assembly, you can create templates that contemplate all of your business issues and include approved negotiated fallbacks. By automating your contracts, you can dramatically speed up sales contracting and enforce standards, as well as scoring and guiding the acceptable risk in each contract.

Learn more about automating your sales contracts here or listen to a webinar by Dow Jones and DLA Piper to learn "How sales teams can reduce the time and expense of closing deals by 50%" here.

Have you reduced the risk in your sales contracts? Please tell us how in the comments below

A law firm that makes life simple for clients

2009-11-19T09:27:00.003-05:00

As a lawyer, have you ever wondered how your clients would describe you? Would they say you're client-focused? Commercial? Concise? Cost-effective?

If not, you might be interested in Australian Business Lawyers. Lawyers Weekly has an article on how the Sydney-based firm has built a successful workplace law practice over the past 10 years by making life simple for its clients. So, how has ABL done it?

One way has been by ensuring that written advice is as straightforward as possible. Many firms aspire to write in Plain English. ABL actually does.

Another way has been by providing clients, most of whom are HR professionals, with access to HR Advance, the firm's online documents service. ABL created HR Advance by combining its deep employment law expertise with Exari's document assembly platform. The Lawyer's Weekly article explains:

[HR Advance is] a toolkit of HR documents which HR professionals can use to generate workplace-related documents online via sets of simple questionnaires. According to [Managing Partner, Tim] Capelin, the toolkit recognises that certain areas of workplace law are essentially becoming commodities, and while most law firms will attempt to produce consulting services around such areas, ABL believe the process can be much cheaper and simpler.

Thousands of subscribers pay a subscription fee which the firm says is usually less than what it would cost for one consultation session with a law firm. The product won an award for IT innovation in law in 2007.

All firms claim to be client-focused. ABL is one of the few that has actually done something about it by developing an offering tailored to its clients' needs.

To learn more about ABL's use of Exari for HR Advance click here.

Do you know of other firms that are reinventing the way legal services are provided? If so, let us know in the comments below. We'd love to hear about it.

40% of legal budgets spent on contract support

2009-11-12T09:21:00.004-05:00

IACCM research “has found that in many organizations, bid and contract support can account for more than 40% of the legal budget.”

Accordingly, recent comments made by Colleen Gallagher of Huron Consulting should come as no surprise. At an IACCM meeting, Gallagher explained that current pressure on legal departments to increase efficiency has made contract management ‘top of mind’ for many in-house lawyers. She then outlined eight issues on the agendas of law departments that analyze their contracting processes. IACCM President, Tim Cummins has posted a summary of Gallagher's talk which is definitely worth reading.

Poor understanding of contracting costs

Of particular interest to me was the point that “few organizations have any consolidated understanding of the costs associated with the development and management of their contracts.”

Even though it’s entirely consistent with our experience at Exari, I never cease to be amazed by this. I just don't understand why companies seem so oblivious to the level of waste in their contracting processes. Yes, I know that the cross-functional nature of the process adds complexity. But isn't that what all those lean/six sigma/process improvement people are there for?

If you knew that your contracting processes accounted for around 40% of your costs, would you want to look for potential efficiencies?

Have you already improved efficiencies in your contracts? If so, please tell us about it in the comments below.

Click here to learn how Exari helps corporate law departments achieve higher levels of efficiency.

Is Your Procurement Team Best in Show?

The 4 Key Challenges of Contract Management for Law Departments

Breaking the "Groundhog Day" Curse

2009-11-05T10:42:00.003-05:00

In this month’s Global Broker and Underwriter Magazine, Lloyd’s CEO Richard Ward, talks about the market’s need to “get it’s act together” to provide better service to its clients, or risk them going elsewhere. He emphasises the need for the market to embrace the Lloyd’s Exchange initiative and says that, “To some respects the market is like a Groundhog Day as nothing has materially changed.”

The challenge of the Exchange is to get more information flowing between broker and underwriter. This initiative is at the exact same point where others have failed and we have heard the same rallying cry from previous advocates of change. But how can you break through to the next level and actually get meaningful volumes of information being transmitted between trading partners?

The answer is certainly not to ask the brokers to work harder or spend more money to make it happen. They will merely smile sweetly (again) and carry on with their own priorities.

So, how do you break the cycle of failure? - Change the path of least resistance.

Today, brokers often use Word to generate the documents they need to negotiate a client’s risk. In doing so, they trust their support staff to be on top of the latest market reform initiatives and their company’s rules. And then, most of the really useful information ends up locked inside these Word documents.

There is a growing recognition, however, that by using specialist document automation technology such as Exari, brokers can improve turn-around times (documents produced in 80% less time) while ensuring greater accuracy and built-in compliance. Our broker clients tell us that it’s easier to use a structured mechanism for building their documents than relying upon the free form use of word processing.

Using Exari, documents are “assembled” from the relevant sections, clauses, paragraphs and words that are applicable to the risk class. During that process, data is automatically being gathered in the background. It is that data that can be transformed into a message and sent to underwriters via the Exchange.

Everyone wins - Brokers get better documents faster; Underwriters have to do less checking since there are fewer elements that can go wrong; Clients get better service and the Exchange builds up its message traffic.

If you use a document assembly solution like Exari to structure the creation of your documents at the beginning of the placement process you can break the Groundhog Day curse.

This post was guest authored by Martin Kett, Exari's VP of Insurance Client Development.

Too Much Sales Time Spent on Contracts

2009-10-30T06:41:00.007-04:00

“In many organizations, up to 25% of sales time is spent on contract-related issues,” states Tim Cummins on his blog Commitment Matters. Tim is president of the IACCM, a non-profit organization that’s become the global forum for innovation in trading relationships and practices.

This is astounding. As we emerge from a very deep recession (knock on wood as GDP came out positive this week), organizations around the world are struggling to do more with less and to close sales more quickly. How do you do this when 25% less time is spent selling or prospecting?

An alternative to the manual, slow and risky process of creating contracts and sales documents such as NDAs and proposals, is to use document assembly/contract automation software. These solutions allow sales reps to create structured, approved sales documents on the fly by answering questions in a browser. These systems can integrate into the CRM system so the sales rep doesn’t have to re-enter data and all contract data can go back into the system. This allows the company to also manage, analyze and report on these contracts.

Another interesting subject touched on by Cummins comes from a report by CSO Insights on Sales Compensation and Performance Management. It talks about how the recession has caused many sales reps to miss their quotas and to begin to push the boundaries of what is ethical. The report goes on to say that sales reps state that the biggest cause for losing business is the “competitor’s price and terms.”

And this brings us full circle back to contract automation. If you automate your sales contracts and capture the data, you can control what the rep can do with the Ts & Cs and give them some controlled flexibility to negotiate on their own as well. You can also risk- rank your contracts and start to compensate your reps not only on revenue but on the value of the underlying contract to your company.

Dow Jones & DLA Piper joined us for a webinar on this topic: "How sales teams can reduce the time and expense of closing deals by 50%" Download the recording now.

Document Assembly Software Explained & Reviewed

2009-10-22T09:21:00.016-04:00

Noted document assembly expert, Seth Rowland, has written a beginner's guide to Document Assembly that does a good job of explaining how document assembly software works.

Document Assembly goes by many different names, depending on the related job function and industry. It can be called document automation, document generation, contract automation, policy configuration, loan documentation, document creation and many more. For simplicity, we'll stick with document assembly here.

Recently, Seth reviewed Exari Document Assembly Software in the TechnoFeature Newsletter. Below are some excerpts:

In evaluating a document assembly system, one must look at what the user sees when he or she launches the document assembly interview. If the user's experience is "pleasant"; if the user can easily navigate the questions; if the user is guided to make the correct choices; and if the user can easily review and change his or her answers, then you can say that the system succeeds. The Exari interview shines in each of these areas.

At the end of the interview, Exari presents you with several optional outputs including Word and PDF. The most interesting option is a document preview. You can see the document with variables and optional text indicated...Exari adds a further output option that is unique in the document assembly industry. Called the Exari RoundTrip, it produces a Word document that can be negotiated and edited.

Exari has just about every feature you could imagine for a document assembly system. Variables and various other components, just like documents, are stored as XML objects. Exari has variables, conditions, repeats, calculations, conditional expressions, multiple choice questions, and user text questions. To the standard list, Exari adds smart phrases, blocks of text that are reusable in the template and may or may not contain conditions, variables, and logic.

Exari includes several other components that round it out as a robust and powerful programming language.

Clearly, you'll need to conduct a return on investment analysis. Look at the number of users who will use the system, the number of documents they will assemble, the location of the users, and the level of expertise among the users regarding the documents. In the proper setting, Exari will pay for itself in under three months after full production.

You can read the complete review here. And please, let us know what you call Document Assembly below in the comments.

The 4 key challenges of contract management for law departments

2009-10-15T14:53:00.000-04:00

Well known legal department consultant, Rees Morrison, reminds us of the four key challenges contract management poses for in-house lawyers:

Standardizing and simplifying contract drafting.
Setting policies regarding legal department review of contracts.
Streamlining contract negotiation.
Facilitating the company's adherence to its contractual obligations.

Morrison notes the role of document assembly in addressing the drafting issue. Interestingly however, all four issues can actually benefit from a document assembly solution.

1. Contract drafting
Most legal departments try to improve contract drafting by using MS Word templates. However, these create problems for all parts of an organization:

Business users hate Word templates. Their eyes glaze over when they see square brackets and verbose user instructions. Instead, they either ask Legal to do the work, or they cut-and-paste from a previous agreement.

The lawyers are unhappy too. Word templates are too risky. Often, business users can't get the substantive terms right and Legal has no visibility into the deal.

In contrast, document assembly enables drafting to be pushed out to the business as a self-service model, while ensuring the generated agreements are legally compliant. The business users are guided through an intuitive web interview. The lawyers retain control by pre-determining what content is included. Further, PDF output ensures that the business user can't modify the document post-production.

2. Contract review
For legal departments with contract review policies in place, document assembly systems can enforce those policies by embedding them into the system as rules.

When there is non-compliance with a rule (e.g. in answer to an insurance question, a user might respond that the counter-party has insufficient insurance), the system automatically routes the contract to the legal department for review.

3. Contract negotiation
Document assembly can improve negotiation in two ways:

By building commonly negotiated fall-back scenarios into the system (with different answers triggering the inclusion of particular provisions) the negotiation process is made much faster.

Some systems can actually capture all edits made to a document after it has been generated. That ensures any changes made by a counter-party are visible (even if MS Word Track Changes has not been used). Further, these negotiated positions can even be applied to subsequent agreements such as renewals.

4. Contract tracking
Typically, there is both a functional- and system-separation at the point of contract execution. Pre-execution work (drafting, review and negotiation) is controlled by Legal, while post-execution tasks (obligation management) are usually handled by a contracts department or business unit.

For companies that have implemented a contract management system, the right document assembly system can provide huge advantages via integration. They are able to:

Automatically push the execution version of an agreement into the contract management system in electronic form (even if the document has been heavily negotiated).

Flag the extent to which clauses have been modified; which changes are simply approved fallback provisions, and which contain bespoke wording.

Enable analysis and reporting on the risk profile of an organization's entire contract portfolio.

Conclusion
Currently, a few innovative legal departments are realizing the full potential of document assembly. For various reasons, most organizations have not yet analyzed contracting the same ways they have other business processes. However, when they do, they will discover that the contracting process is highly inefficient, and that the potential cost savings from automation are just too great to ignore.