| Natalie Fedie

Getting Started: 4 Quick Wins to Automating the Closing Process

The legal landscape is evolving. Client demands for alternative fee arrangements, the rise of alternative service providers taking on more of the administrative work, and increasing requirements to keep client data secure are a few reasons law firms are looking to adopt technology solutions to stay competitive in today’s rapidly evolving legal environment. The changeover from pen and paper to digital automation can be somewhat overwhelming considering the mass of information exchanged per deal. Therefore, in many cases, there isn’t a unified effort within the firm spearheading an initiative to automate processes. This leaves attorneys and paralegals to figure out for themselves how to go about changing antiquated workflows without slowing down or disrupting work in progress.


The most effective and sustainable approach for adopting an end-to-end legal transaction management system is to assess what problems need to be solved and incrementally focus on the areas of the closing process where you can standardize repetitive workflows and save time. Mary Juetten, founder of Evolve Law, outlined some easy steps on how to evaluate your processes before you invest in technology in her Above the Law article Technology Implementation: Process Before Purchase and Data Before Decision.


Take into consideration that you will need to build your improved processes around the software’s functionality and set aside time to properly train the team. The value of this planned approach can reimagine the way law firms engage with their clients, allowing deal teams to close deals faster with more accuracy, ultimately improving client satisfaction.


Below are four areas of the transaction management workflow process to consider automating that have the lowest risk with big gains.


1) Standardize & Automate Closing Checklists

One area of the legal transaction process that is least consistent and provides an opportunity for improvement is the way law firms utilize closing checklists to manage transactions. It is common for attorneys to use their own checklists for a transaction so many different versions of a closing checklist for specific transaction types (i.e. M&A, Private Equity, Venture Capital, etc.) persist across a practice group. Associates generally pull a checklist from a prior transaction to start a new deal. However, starting with a previous checklist can be risky because the checklist could have been modified to meet certain special requirements of that transaction. Standardizing checklist templates saves time, increases efficiencies and creates a consistent approach for managing transactions across a group or firm. It can also expedite the learning curve for new associates. Get started by utilizing resources like Thomson Reuters Practical Law.


After a firm has standardized their checklist templates internally, there are several additional advantages of adopting technology to store documents and automate the closing process by utilizing digital checklists. For example, checklist templates by transaction type can be stored in the system, saving time in customizing previous checklists or developing new ones for each transaction. Digital templates can also be customized easily to include additional tasks, reminders, and documents specific to the deal. Most importantly, a transaction management platform allows internal and external deal teams to track and assign tasks in a secure environment. Documents and tasks can be reviewed, negotiated, finalized and executed in a single location and deal status can be accessed in real time, decreasing or eliminating the need to spend time sending emails and making calls for status updates.


2) Establish Document Drafting and Review Workflows

Depending on the complexity of the transaction, deal closings can involve hundreds of documents and several parties needing to review them. Many of these documents are stored in multiple places, which makes tracking latest versions and which party is responsible for reviewing the document next, painstakingly difficult.


Managing the document review process in a digital workflow platform allows for collaboration among internal and/or external collaborators in a secure environment, significantly saving follow up time during the negotiation process. Communication between team members and the ability to provide status updates in real time directly increases client satisfaction. Streamlining the drafting and review process leaves more time to focus on legal strategy, evaluation, and billable work.


3) Tracking Signature Status Automatically

Understanding which documents require signatures, and the manner in which they need to be signed to be considered a binding contract, can be a complex undertaking. There can be even more room for error when dealing across jurisdiction or with international parties. Tracking down documents and signer information during the transaction process is an area that can consume the largest amount of administrative time and potentially delay the deal from closing on time.


Advancements in technology help automate the entire signature process by streamlining the task of creating signature blocks, providing real-time status updates on signatures received and leaving more time to spend on higher value legal work.


This can also be one of the hardest areas to implement change. After years of doing something one way, many associates and paralegals are hesitant to change a manual process that they think is working fine. “We are waiting for the “right transaction” is a frequent excuse and often prolongs the transition period. However, given the opportunity to run a deal with the assistance of technology, many people say they can’t imagine doing it any other way and can’t believe they waited so long to try it.


4) Generating Digital Closing Books in Seconds

Another area of the transaction process that can take weeks or months to complete is generating and distributing closing books. In the past, the printer was churning away to the exclusion of any other work as one or two employees scrambled to complete the binder at the end of a closing. The manual creation of these binders is time-consuming, labor-intensive and costly. The ability to create electronic closing books has been a positive cost-cutting measure, creating greater efficiencies and adding value to legal practice but many firms are still manually gathering the documents from a variety of sources into one location and spending hours getting them into the right format.


Automating the closing book process can save up to 80% of time spent on manual processes. If your firm is not taking advantage of this capability, your competition probably is.


In summary, clients will come to expect firms to provide streamlined administrative processes and increased transparency into the status of legal transactions. Firms who are investing time now in evaluating their current processes and adopt technology to streamline processes will have the insight to more accurately predict the right fees to charge to stay profitable and remain competitive.



Looking for more information on how to get started?

Join us for our “How to Automate the Closing Process” webinar!

June 27, 2018

11:00 am ET