What is Legal Document Automation and How Does it Work?

05 Apr 2024

In any business sale, you need a significant amount of documentation to protect your interests and legally transfer the ownership of the business.

Drafting all the documents you need can become costly and time-consuming, especially if your solicitor is drafting each of those documents from scratch. But with legal document automation, you can expedite some of those tasks. We have a look at which legal tasks can be automated, and when to seek legal counsel.

How Does Legal Document Automation Work?

You can prepare simple contracts with legal contract automation.

First, you fill out a questionnaire. You’ll be taken through a decision tree that replicates the questions that a lawyer would ask you at an initial consultation. This gives the system key information such as: the parties to the sale, the address of each entity, and the business interests you want to protect.

The software will instantly generate the contracts, or the automated legal forms that you need.

Your contracts will be held in a data room, where you will be able to edit clauses, and from which you can send contracts to the other side for signature.

What are the Benefits of Legal Document Automation?

Speed:

The first benefit of legal contract automation is speed. You can quickly put in place the documents you need to protect your interests. As a result, you kickstart the momentum in your business sale, without losing potentially interested buyers as you wait on documentation.

For example, the first document you want any interested buyer to sign is a Non-Disclosure Agreement (NDA). These are fairly straightforward documents and they are unlikely to differ significantly from one transaction to another. An NDA will keep your confidential information private, and restricts the signatory from sharing any of your commercially sensitive information with third parties.

Cost:

The second key benefit of legal document automation is cost. In most circumstances, lawyers charge for their time in six-minute units. It takes time to draft a contract from scratch, and review and edit it to the standard expected from professional lawyers.

But with automation, the expertise is captured in precedents. The software generates contracts based on templates that lawyers have used for years. The cost of generating your contracts as variations to these precedents is significantly reduced by the automation system.

The Limitations of Contract Automation

Ensuring compliance:

When it comes to signing the contract, you need to make sure that the signatory is who they say they are. In an automated world, it can be easy for people to hide behind screens and electronic signatures to disguise dishonest intentions.

Our solution: miqo, uses a third party to verify each user’s identity. It carries out thorough checks for fraud and money laundering. Taken together, these processes make the platform particularly safe and secure.

Limited use for complex legal documents:

Automated documents can only take you so far. They are useful for simple contacts like NDAs and heads of terms. For more complex agreements you will need input from a lawyer.

Our solution: Larger deals may require the drafting of shareholders’ agreements, and miqo partners with a law firm for these documents. The law firm deals with employment and property related matters, so that it covers the nuances of your circumstances. For SME’s miqo provides all the legal documentation that is required.

Key Takeaways

Automating your legal contracts is a great way to get started with selling your business. You can discuss the details of your business with interested parties, while protecting your sensitive information via NDAs. And you need waste no time in drawing up draft heads of terms, or sales purchase agreements.

For anything more complex, such as commercial property leases, purchases, or sales, it is advised to seek advice from an experienced lawyer.

Please send us a message here if you would like to speak to one of our solicitors .