Legal Tech for Transactional Lawyers Newsletter: #3
Document automation ideas, prompt engineering tips, best practices for innovation in law firms and more!
Happy Friday and hope everyone had a great Thanksgiving! In this edition I focus on where we can apply document automation outside of loan transactions, link to some solid legal tech articles and think about a great quote from JFK in the context of change management at law firms.
Hopefully you find it useful and interesting. Please feel free to share with anyone that may be interested and have a great weekend!
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Leveraging Tech in Transactional Matters
📗 Document Automation for Transactions Other Than Loans?
I am still surprised at the percentage of transactional lawyers that do not use document automation. Given where the technology is today, almost every piece of paper that starts with a form should leverage document automation to create the first draft. This even applies to bespoke and complicated agreements that might not have a "form" - chances are they still start from something and include some basic information that can be templated.
Most finance lawyers can easily see the value in automating a set of loan documents for a lending transaction (real estate or corporate), but it should not stop there. Other types of transactions that involve one or two complicated core documents are still great candidates for automation as they often have a bunch of smaller ancillary documents that could benefit from automation. Here are a couple examples of sets that work well:
🏭Real Estate Acquisitions - JV Agreement, Completion Guaranty, Development Management Agreement, Member Operating Agreements, Escrow Letter, Opinions, Term Sheet, Cost Sharing Agreement, Consents, Resolutions, Invoice (20 plus documents and often many more when complicated organizational structures are part of the transaction)
🤑Real Estate Sales - Purchase and Sale Agreement, Deed, FIRPTA, Notices of Sale, Access Agreement, Estoppels, Escrow Letter, Certificates and many more (40 plus documents and sometimes many more)
🔰Leases - Lease Agreement, Guaranty, Rent Commencement Letter, Term Sheet
💻Corporate Acquisitions - Asset Purchase Agreement, Bank Consent Letter, IP Assignments, Escrow Letter, Closing Certificates, Resolutions and many more.
No forms, no problem. Start with the simple stuff and then build other automation in as you use language on a deal by deal basis. There is even some promise that AI will be useful in creating templates from precedent documents where no form exists yet. 🚀👩🚀🥊
Articles and News
👨💻 Ability to Instruct is Key to Leveraging Generative AI
This blog post by Jordon Furlong sums up the key skill sets that legal professionals will need to master to interact with AI in the coming years. I think it will be important to learn how to break complex legal tasks (like turning a set of mortgage loan documents into mezzanine loan documents for example) into concrete steps. These steps might be even more granular than how you would typically explain the task to a junior associate doing it for the first time. These detailed instructions can then be passed to the LLM to perform the task.
📜 Generative AI and Contract Drafting
Really solid article by Jack Shepard discussing use cases for GenAI in contract drafting. I tend to agree that Generative AI won't replace document automation and templating any time soon. One major hole that I have recently encountered in using GenAI to create drafts is the lack of consistent formatting. This is not workable for complex form sets where time and effort was put into formatting the form.
👍 Will AI Force the End of the Pyramid Model at Law Firms?
Jason Boehmig discusses why the rise of AI could automate many of the tasks performed by associates, which might end the traditional law firm pyramid structure. I think in the context of transactional matters, this should allow attorneys to move more toward a fixed fee as AI tools create more certainty of cost around items like due diligence and contract drafting.
🔦 Prompt Engineering Tips
This is a great article by Ethan Mollick (who is a must follow all things AI) that contains some really good tips for prompt engineering. The section on Structured Prompting is particularly useful and we have used some of those techniques successfully.
👓 Strategies for Successful Innovation Projects in Law Firms
"One person can make a difference, and everyone should try." - John F. Kennedy
I have always had a small framed picture in my office with this quote on it. 🖼📷
I was always focused on the humanitarian interpretation as it related to work with my non-profit building schools and clinics in developing world countries. This week I was looking at it again and realized it can be applied much more broadly to things much less important.
Why is change so hard, especially in legal work? What holds us back?
My post from a while back on driving innovation in law firms is always good to look back on when thinking about change management in legal workflows, especially in law firms. Be sure to click through to the article from John Alber on the archipelago analogy for working within law firm management structures.