Written by Thomas Officer

Thomas is a cofounder and Design Lead at Afterpattern.

In a nutshell

Traditionally, the primary purpose of document automation was to transform a time-consuming, error-prone workflow into a quick, streamlined process. In other words, the primary purpose was saving time. But recent changes in document automation software are allowing businesses (most notable, law firms) to go beyond simple efficiency gains and create entirely new revenue streams.

There are two ways these businesses are using document automation to create new revenue streams: (1) by adding a paywall within the workflow that automates the documents, and then marketing that workflow to the public directly; and (2) by allowing other businesses to purchase and duplicate the workflow itself (the buyers rebrand the workflow and then market it to the public directly).

In this guide, we'll review the current state of document automation software and explore both of these new monetizations tactics.

What is document automation?

Document automation is the latest development in a broader technological trend known as electronic document management (EDM). Document automation (also known as “document generation” or “document assembly software”) simply means creating a new document by populating a document template with data.

A document template is a framework for how a final document should be produced. Final documents can typically take the form of a PDF, Microsoft Word file, or even an email.

Here is a template letter from a tenant to their landlord where the yellow labels indicate data that needs to be populated to produce the final letter:

Where does the data come from?

No matter what document automation software you use, there are only two possibilities:

  • An online form; and/or

  • A database

An online form or questionnaire (and these can be quite robust, e.g. TurboTax) is used to collect data in real-time, whereas a database makes use of pre-existing data.

Databases can take the form of a client relationship manager (CRM), legal practice management system, or simply a cloud-based spreadsheet (e.g. Google Sheets or an Afterpattern database).

Quick buyer's guide

Here are some questions you should be asking yourself when evaluating the document automation features of various software providers.

Quick aside: Afterpattern, the company I work for, provides document automation software, so you should read this buyer's guide with a grain of salt. That said, I think you'd be hard pressed to find someone who doesn't think these are important questions for a buyer to consider.

How complex can you make the templates?

A "simple" template just allows you to find and replace text, whereas a "complex" template allows you to use conditional logic to add, subtract, and edit entire clauses.

The example template above (for a letter from tenant to landlord) is a simple template. It works by finding text (e.g. "landlord name") and replacing it with data. A simple template can be used to create innovative and impactful document automations (a legal aid lawyer used a simple template to help more than 40,000 tenants get eviction protection during the COVID pandemic; read the case study).

Although simple templates have their place, they also have their limitations. For example, a simple template, defined as as template without conditional formatting logic, couldn't be used to auto-populate this sentence:

Conditional logic is required for the template to determine whether to insert the words "shall" or "shall not." And this is a relatively basic example, imagine creating a template that auto-populates a complex document like a will.

Who will be able to use your document automation?

Certainly, you will be able to use it. But what about your staff? Your clients? Or the public at-large? Not all document automation solutions include the functionality required to allow you to distribute your new workflow to all these different types of people.

Remember, all document automation software works by populating a template with data from an online form and/or a database. If you want your automation to be used by your staff, clients, or the public at-large, you must consider two things:

  1. Can I create an online form that feels like the type of web-app people expect to interact with online? (e.g. TurboTax); and

  2. If my automation is meant to populate a template with data from my database, how do I ensure that these users will only access those parts of my database I want them to?

Selling access to your automated workflows

There are two ways to monetize your document automations:

  1. Selling access to the automation; or

  2. Selling the automation itself.

What does that look like in practice?

Method #1, selling access to the automation, is perhaps the easiest to visualize since it's likely an experience you've had before: hitting a paywall.

Selling access to your document automation means that the end-user must pay at some point during the course of using it. The most obvious thing for the end-user to pay for is the final document itself, or you could make the document free to download and what they pay for is the option to have you review it (this is known as "upselling").

Another approach is using the document automation as a means of selling separate but related services. For example, a document automation that helps me draft a last will and testament could include offerings for estate planning services (this is known as "cross-selling").

Examples of law firms using document automation to create their own LegalZoom-like products

Here are some examples of document automations that collect data with an online form and are designed for "external" end-users:

  • CDC Eviction Declaration: Helps tenants send letters to their landlord. This online form was successfully used by more than 40,000 tenants in 4 months.

  • Criminal record expungement: With less than ten multiple-choice questions this online form determines whether a particular conviction or charge can be expunged in Kentucky.

  • Debt collection lawsuit answer: This online form automatically fills in the correct forms for responding to a debt collection lawsuit, including an application for a fee waiver, if you are unable to pay the filing fees.

Selling the automation itself

This is less easy to visualize, though again it's likely an experience you've had before: buying software-as-a-service (SaaS).

Your document automation is a piece of software, and if it's useful to you it may be useful to another professional. Depending on what platform you built your automation on, you could sell it to other professionals. For these other professionals, this allows them to get the benefit of a particular document automation without doing the hard work of building it in the first place (that's what they pay you for).

Afterpattern makes it very easy to sell your automations to other professionals. For example, this Form I-9 document automation is available for anyone to duplicate for free.

How to begin

The best way to begin building a document automation system is by mapping out the logic underpinning your document templates.

First-time document automators often believe the “hard part” about document automation is learning a new software tool — but the real challenge is actually this initial step, which has nothing to do with software. Take a look at the documents you'd like to automate. Write down exactly what business logic or rules are used to determine how this document is generated; you can save this information in a spreadsheet or draw a diagram with decision logic. This outline will be essential for you no matter how you choose to move forward.

Need help getting started? Take this 35 minute tutorial to learn how to look at your document and write down the programmatic steps required to automate it.