Guide To Going Paperless In Your Real Estate Law Practice

Paperless offices are nothing new, but law firms are one of the last types of business to adopt the practice in large numbers, because we are all so accustomed to having to deal with massive amounts of paper for every aspect of practice. The truth is, entirely paperless law offices are probably still a bit in the future, but smart attorneys can dramatically reduce paper, beginning now, and building a system that will, in time, provide a reliable and efficient way to store all of the documents and records required and needed, completely paperless.

Why Consider Going Paperless?

There is no getting around the fact that shifting from paper-based records to a paperless system is going to take some time and commitment, but in the end, there’s no question that a paperless office will save money and create a more efficient work environment, which, after the initial time investment, will shave time off of every task in the office, from dealing with clients to billing, filings, and business development.

  • Less Paper Means Lower Costs - First and foremost, paper is costly, and the average American office worker uses an astounding 10,000 sheets of paper a year. Worse, about 45 percent of those sheets end up in the trash or recycle bin by the end of the day they were printed. Add the cost of storing all those paper documents. An average four-drawer file cabinet holds between 10,000 and 12,000 documents and takes up about nine square feet of storage space. Every dozen file cabinets, on average, takes another employee to manage, and the amount of paper in an average office doubles every 3.3 years, so the costs are multiplying rapidly. Counting the cost of paper, pre-printed forms, space, and labor hours to organize and maintain the contents, every file cabinet costs about $1,500 a year.
  • More Efficient Office Operation - Digital files (created as such) and digitized files (digital files created from paper files) take up no physical space, though the scanning equipment and servers on which they’re stored will take up physical space. Still, that amount of space is a small fraction of what paper requires, and will not multiply over time. More importantly, digital files offer far more sophisticated organization, more ways to search and categorize, and much faster retrieval than any paper-based system. Digital records can be duplicated and stored redundantly for very little cost. The Paperless Project, a grassroots coalition conducting research into the development and implementation of paperless office systems, determined that on average, a misfiled paper document costs a company $125, while a lost document costs between $350 and $700, and large organizations lose a document every 12 seconds. Digital documents are virtually impossible to lose, and complete disaster recovery is more likely and less costly when records are digital.
  • Efficient Access From Almost Anywhere - Collaboration and remote access are also made feasible and efficient in offices with digital records and cloud-based storage or secure remote server access for employees. From a desktop, laptop, tablet, or smartphone, everyone who needs access to digital records can find what they need in seconds, while security protocols keep prying eyes out of confidential information.

How to prepare to go paperless

The key to making the smoothest possible transition from paper to digital record keeping is planning ahead. Building a system robust enough to handle the forms and records already in use, and adaptable enough to accommodate future needs is critical, and so is ensuring that everyone in the office has the training to correctly and efficiently deal with a digital system. Simplicity and consistency are two top-priority considerations in building a system that will genuinely achieve the goals discussed above. Patching together a system from components that don’t integrate, or which require redundant input (offering increased chances of human error) is not a cost-effective method, although it may seem tempting because the individual components are low in cost.

  • Decide What Paper Absolutely Must Stay - Certain documents must be retained in paper format in order to use them as part of the legal process: Affidavits, promissory notes, and wills, for example. Typically, those documents won’t be accessed frequently, and their numbers won’t be overwhelming. Keep the paper required for your practice, and keep digitized copies for backup and for easy reference.
  • Evaluate Papers In Terms Of Expedience - Going forward in a paperless office, all paper documents that come through the door should be scanned, whether the original will be retained or not. Evaluating the paper that’s already loaded into file cabinets presents a greater challenge, though. If labor were free, scanning every last document into your new digital system would make perfect sense. Labor is rather costly in the real world, though, and your own time is highly valuable, so it’s important to make a realistic evaluation of whether it’s worthwhile to retain a given document at all, and if so, how often it’s going to be accessed. If it’s likely to be needed as a reference, by all means, scan it, so you can pull it up quickly, without having to go to the file cabinets.
  • Web-Based Fax - At some point, the fax machine will finally go the way of the dodo, but in the meantime, there are certain cases where attorneys need the capability of receiving or sending a fax. Web-based fax services are actually not faxes at all; they’re transferring digital files like an email would. Set up a web-based fax and skip scanning the documents you receive. Use your scanner when you need to send a “fax” out, and get rid of the old- school fax machine.
  • Get A Good Scanner & Plan Digital Storage Carefully - Choosing a high-quality scanner is important, but don’t pay for more features than your practice can use. If scanning and storing color images of properties involved in your transactions is vital, obviously pay for quality color scanning capability, but if what you need to digitize is text- only, don’t waste money on that high-end color capability. An automatic feeder duplex scanning capability will be massive time-savers, if the documents you’re scanning are standard-sized and printed on individual sheets. Another important consideration when you’re looking at converting to a paperless office is the speed of the scanner. Skip the scanners designed for home or small office use, and look for one that scans 20 pages a minute or more.

Once the documents are scanned, they’ll be ready to be placed in your virtual, digital filing cabinets. Like with physical filing cabinets, digital filing needs to be carefully planned. In some cases, it will make sense to use the same filing structure as in your physical file cabinets, but take the opportunity to consider whether a different set-up might make document retrieval more expedient. This is one place where it may be worth investing in the services of an efficiency consultant; the right file structure will save you countless time in the future, while a poorly designed one will be a source of endless aggravation and wasted time.

  • Choose The Right File Names & Descriptions - Standardizing file naming conventions for your practice and file descriptions and tagging will make your paperless system more versatile for many future uses. A useful file name should include an easily readable date -for example 2017_07_04, as opposed to 20170704 - and a basic descriptor in standardized format, which could use client’s name or file ID number. The document description should include likely search terms that might be used to recall this document later, such as B. Collins Email, or 3946 Cambridge Street. Think about how you use your stored documents, why you would refer to them in future, and then create the shortest possible file name and description that will cover those needs. Again, what matters most of all is consistency, so think about how others will need to access those files in future, as well. AdobePDF files offer a number of additional features that can be added to documents, like Bates stamps, highlighting and annotation for collaboration, bookmarks, password protection, redaction, and keyword search, all of which can help make a paperless system more efficient and robust.
  • Digital Signatures - Digital signatures allow you to securely sign a document without printing, making a wet-ink signature, and scanning the document back in. It also allows your clients to do the same. Transfer signed documents through a secured connection, and you’ve slammed the door in the face of potential hackers who might try to intercept confidential information to use in any number of scam attempts.
  • Cloud Storage & Security - Creating a redundant cloud-based system gives you the added protection of a full set of files, stored off-site, in case of a disaster. Restoring from a cloud backup is typically quick and correct, so you’ll be back up and running on all cylinders immediately. Cloud storage can also provide easier remote access. It’s critical, though, that any cloud-based system when legal files and confidential information are stored be protected with a verified access protocol that ensures only authorized devices and people are able to see the files.
  • Get Everyone Up To Speed - Once you’ve chosen a system that’s going to work for your practice and how old and new documents will be handled, develop procedures and practices and make sure everyone is fully trained on the technology involved, how your digital filing needs to be done, and not only how, but why it’s imperative that everyone use standardized file naming and descriptions correctly.

Paperless law practices are more efficient, economical, and secure

Save money, lower your firm’s environmental impact, get things done faster and cheaper, and lower everyone’s stress levels by building a paperless practice. Will there be growing pains? Yes, there will, with no doubt. The benefits in both the immediate term and the long term, though, will make the cost and effort of converting to paperless a wise investment.

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