Document Automation and Generation

A recent trend in business process management involves generating, routing and automating documents. Automating document generation allows you to convert the existing types of documents your firm frequently uses into automated forms. When combined with business process management, automating document generation and routing can provide your firm with greater consistency, save a significant amount of time, and reduce risk.

Engagement Letters: The First Step in Document Automation

Consider an audit engagement letter. An audit workflow typically involves obtaining a signed engagement letter as one of the earliest steps in the project. What usually happens is the engagement team receives the client information and gets to work, assuming the signed engagement letter will come in before fieldwork is complete. This strategy backfires when the firm realizes they’ve delivered the client’s financial statements, but they don’t have a signed engagement letter on file.

That scenario might not be a huge risk if the audit is for a recurring client with whom you have an excellent relationship. A quick reminder will usually convince the client to sign the letter. However, the fact remains that an engagement letter is your contract. It’s how your firm manages client expectations, pricing, the scope of work and liability.

Your Engagement Letter Mitigates Risk

As Sarah Beckett Ferenece perfectly puts it in her article, “Just as a seat belt helps mitigate the risk of bodily injury, using a well-crafted engagement letter may help mitigate the risk of a professional liability claim.”

Yes, the engagement letter defines the legal relationship between a professional firm and its client(s). However, when well-crafted, an engagement letter is more than just a contract.

When a firm no longer sees an engagement letter as something that needs to get done, and instead, takes the time to build out their letter to fully reflect the value and service that they provide, the Engagement Letter reaches beyond serving as document to mitigate risk. It becomes an additional business tool that:

  • Sets out the proper expectations to your client and of your staff.
  • Serves as a clear, precise and agreed upon road map so your client understands what services will be provided.
  • Allows your firm the opportunity to thank your client for the opportunity to work together,. Thus demonstrating professionalism and the desire for a long-term business relationship.
  • Serves as a reminder as to what was discussed and a confirmation that all parties involved are on the same page.
  • Accurately and succinctly sets forth your payment fees, terms and schedule, avoiding any concerns down the road as to when and why money is to be collected.

Using a business process management tool to create engagement letters will not only ensure your firm has the signed agreement before work begins, it will enhance your clients experience and protect both the firm and the client.

Document Automation Generation Beyond Engagement Letters

Engagement letters aren’t the only documents a firm produces. Every day, firms send responses to IRS notices, prepare valuation reports, send client correspondence, and generate other types of documents. Regardless of how complex those documents are, leveraging logic-driven creation tools and incorporating them into your business process management solution can give them the attention they deserve.

Consider your firm’s shift into consulting and advisory services. Many firms have evolved from tracking billable hours to value pricing. Their clients may be on a subscription model, and they send master services agreements (MSAs) rather than engagement letters. This is an excellent area to improve your processes and look for ways to leverage automation.

Master Service Agreement Workflow and Automation

MSAs can flow through several departments. Your business development team sends them out. Partners, managers, or other firm leaders have oversight and need to sign the contract on the firm’s behalf. Clients need to sign them before the firm begins work.

Without automation, the process of agreeing to an MSA can be drawn out and painful. A template might be saved on a shared drive. Someone in business development downloads a version of that template, which may or may not be the most current, and amends the terms depending on what was agreed with the client. Then they send it to a partner for review, which may require a few back-and-forths. Then it’s emailed to the client for signature and possibly more amendments. Once signed, the client mails or emails the MSA to the partner. Hopefully, the partner lets business development and the service team know it’s arrived. And in addition, saves it to the firm’s document management system.

There are a number of friction points and bottlenecks in this process. Duplicated work, version control risk, and wasted time, to name a few. If this process can be streamlined and automated, everyone involved can save time and reduce legal risk.

Even a seemingly simple document can end up being complicated if its creation and routing aren’t addressed in your firm’s business processes. So, consider all of the engagement letters, contracts, and other correspondence your firm puts out each day and how the process can be streamlined and automated.

Contract Approval and Review

Whether you use engagement letters, master service agreements (MSAs), or a combination of the two, approving and reviewing contracts can be hard to control. We’ve seen everything from firms that have no control over contracts and just allow partners to draft their own agreements, to allowing clients to redline contracts, to firms that use a boilerplate form letter.

Again, each firm needs to decide what works best for them. However you also need to know what’s happening in your firm. Engagement letters and MSAs are a contract between you and your client. Ideally, it outlines each party’s fees, responsibilities, and obligations, helps establish expectations and reduces scope creep.

At a minimum, your process should ensure that you’re getting a signed contract and identifying any deviations from your firm’s standard contract. For example, if you have 5,000 client contracts, how many of them have altered payment terms or indemnification clauses? Do you have processes in place to ensure you’re not sending the letter of representation for audit engagements without an engagement letter?

Well-intentioned changes to your firm’s standard engagement letter (or no contract at all) can be devastating in the event of a professional liability claim.

If you’re interested in learning more about how Amelio supports automating document generation, contact our Director of Business Development or read more on our website.