eLawyering Blog : Online Legal Services : DirectLaw : Document Automation, Web-Enabled Document Assembly, Virtual Lawyering

One of the winners of TechCrunch Disrupt Hackathon is a new, yet to be launched, legal document web site called, Docracy,  The idea is that members will contribute their legal documents to an open source site so that there would be a basis for comparison between  "open source" documents and the document that the member needs for their business. The theory is that by comparing documents, with the document that the member has on hand, there would be a basis for comparison, resulting in an informed decision, without the cost or benefit of legal advice.

In this model, legal advice from an attorney is worth zero. The model is designed to eliminate the attorney from the transaction.

The idea was developed by mobile app developers Matt Hall and John Watkinson ,from Larva Labs, who were faced with signing an NDA with a client and were unsure of some of the terms and concluded that the cost of legal advice was either unnecessary or prohibitive.

This is another example of the resentment that the average consumer  and small business person has towards the legal profession resulting in the rise of non-lawyer legal form web sites such as LegalZoom.

Another example of an open source legal document repository is Docstoc which we have used as a research source. It is useful for us, because as lawyers we understand what we are reading. I think simply accessing raw documents as a consumer would be a daunting exercise, although I am sure that many consumers and small business use the site.

The problem with any  legal document web site as a source for creating binding legal documents  is that the use of a particular clause may be rooted in case law in a particular jurisdiction.

Without understanding all of the implications of using particular language in an agreement, the "non-lawyer" moves into a danger zone, because he or she has no idea what they are signing. 

A better alternative is a "self-help" book from Nolo that contains both legal forms and explanations of the implications of each clause, but that often involves reading and understanding a 300 page book, which is beyond the attention span of most consumers.

Another solution is an automated document with extensive help screens that explain the implications of choosing one clause over the other.

A third alternative, is to purchase "unbundled and limited legal services" from an on-line law firm  for a fixed price with legal advice bundled into the transaction. In that case you get a certain level of accountability and guarantee that the legal advice is correct for the user's individual situation.

See for example the firms listed at DirectLaw's legal document portal , where you can access legal forms for free, or forms bundled with legal advice for a fixed fee.

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Richard Susskind, in his new book, The End of Lawyers? Rethinking the Nature of Legal Services, devotes a chapter to disruptive legal technologies and identifies automated document assembly as a leading example. A related analysis can be found in a paper produced by Darryl Mountain, a Vancouver attorney, that is titled "Disrupting Conventional Law Firm Business Models Using Document Assembly" Both authors make the point that automating legal documents is one of the major ways that a lawyer can increase productivity, particularly for document intensive practices. Offering these documents over the web directly to clients through a secure client area, where the client completes an online questionnaire increases productivity even more. It is much more efficient than a process where a lawyer or paralegal types data into a desktop windows application manually.

Once the user answers a series of questions that appear in the web browser, a document is instantly created ready for the lawyer's further review and analysis. If the client misses a question, the lawyer can easily communicate by email and request additional information or provide a clarification on how a question should be answered. But that is much more efficient that jotting down the client's answers to the attorney's questions on a yellow pad.

This is consistent with Susskind's analysis that lawyers should automate what they can, leaving to human intelligence what it does best, which is providing legal advice and more customized and individualized drafting. Today automated document assembly solutions  are very robust and can automate very complex documents with multiple levels of "if-then" clauses to accommodate hundreds of different fact situations. Automation of more standardized legal documents should be a "no-brainer."  Using automated document assembly reduces greatly the amount of time the attorney has to spend on an individual document project enabling alternative billing systems that yield a higher margin for the law firm and also potentially lower pricing to the client.

We have seen these efficiencies in our own business activities. Through our affiliate company, Epoq, US, we sell thousands of standardized legal documents a month directly to consumers. Many of these documents are court documents, available for free from court sites, in Adobe .PDF format. Examples are non-contested divorce actions, name change actions, child support modification actions, incorporation documents, and other corporate filings.  By automating these documents and legal forms and adding extensive help screens we add value and make it easier for self-help ("pro se"  parties to complete online.

We know that our legal forms business is taking away market share from law firms, even though we do not provide legal advice and we are selling legal forms only. This is a classic case of "pure-play" disruption. Because the user is "doing"  the work by completing an online questionnaire, and the software does the rest, we have a very high profit margin on these forms, once they are automated. I call this, "making money while I am sleeping."

We also know the limitations of a "forms only" , self-help approach. Our DirectLaw, virtual law office platform, makes our legal forms and automated document assembly technology, available to law firms as a hosted service.  In the law firm configuration, the lawyer can bundle legal advice for legal forms offering a much valued-added offering at a price point which is significantly higher that the sale of automated legal forms only. The lawyer still provides a personal service element, but the document assembly technology enables the lawyer to spend more time with the client because creating the first draft of the document is instantaneous. Moreover, the client is doing part of the work as the lawyer doesn't have to waste time gathering basic factual information which is captured online within a web page. This also can be a very profitable business model. I know from operating my own Maryland virtual law firm , from my home in Palm Beach Gardens, Florida,  just how profitable and satisfying this can be.

I have heard some critics of automated methods remark that lawyers were not trained to be "robots." This perspective misses the point by a mile. By figuring out what parts of a legal process can be efficiently automated, and which parts need to remain the domain of human intelligence, the productivity of the lawyer is greatly enhanced. In the future automated document assembly over the web will become the norm, as it offers the promise of greater value and lower fees or prices.  If not through law firms, then through non-lawyer legal form publishers who have migrated their legal form content to a dynamic and interactive format.

Solos and small law firms ignore these developments at their peril. While many solos practitioners ponder these developments, non-lawyer operated web sites like SmartLegalForms, Wills Online, the Name Change Law Center [ disclosure: We also operate these aforementioned legal form web sites ], Nolo, and LegalZoom, and other non-lawyer sites, will continue to eat away at the market share of the legal profession, particularly solos and small law firms.

It is time for the legal profession to catch up and not cede this piece of business to non-lawyer operators. At the end of the time day, it is the consumer who will suffer by not having access to the legal profession.

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