Modern closings aren’t what they used to be. Gone are the days when an entire loan agreement could be dictated to a secretary and then a couple of pages signed by hand. However, many firms are still stuck in the past, holding onto old practices that slow things down and create extra work for their teams. Here are five things your staff wants you to know about closings, and how you can bring your firm up to date.
Over time, all of the elements involved in structuring, documenting, and closing a legal transaction have become more complex. The organizational structures of clients and counterparties, the mechanics of the transactions themselves, and the required documentation all contribute to this increased complexity.
At the same time … nothing happens at the same time. It’s much less common for all parties to gather together in the same room for closing to sign documents simultaneously. Instead, various components of the closing are completed asynchronously. Some portions are signed in advance while others are being negotiated just up until moments before close.
Keeping track of all of these moving parts is difficult. That’s why having a single source of truth is so critical—one place that everyone can refer to for the most up-to-date information leading up to closing.
With more complex closings come a greater number of people who need to be involved and informed each step of the way. Collaborating and reviewing documents between all parties is more difficult, and can result in thousands of emails back and forth. Edits, comments, and negotiations continue throughout the process, and maintaining consistent version history is crucial. Another concern is security as confidential documents are digitally passed around.
The right document management system (DMS) can address many of these challenges. Creating a digital access point for all documents clarifies version history and decreases the need for email updates between parties. And with security baked into the system, maintaining confidentiality and managing access levels among users is much simpler.
Paper is necessary, but not the way many firms use it. Historically, legal firms have maintained filing cabinets and storage rooms full to the brim of hard copies of all critical documentation they’ve ever handled.
While many have also embraced some degree of digital storage, the fact of the matter is that much of it results in redundant work. In fact, it’s not uncommon for documents to begin in digital form, be printed out for inclusion in the closing room, and then re-scanned back into digital form, and then printed out again to be included in the bound volumes for the closing binders.
The cost pressures of this kind of document management can be staggering. Not only are you looking at $500-1500 per deal on the hard costs of scanning, burning, printing, binding, shipping, etc.—you’re also adding on all of the time-related employee costs.
Long story short: If you’re going to go digital (and you should go digital!), go all-in. Limit paper to what is truly necessary, and empower your staff to shred what isn’t. Here’s an easy guide to help you get started.
Your staff aren’t the only ones who are invested in your closing process. Your clients care about your expertise in knowing how to properly manage transactions and get them to close on schedule and on budget. Clients are also looking for a more digital experience—they expect to pay invoices, review docs, and sign paperwork from the comfort of their own devices. In short, expectations are higher and transactional time frames are shorter.
In addition to the previously mentioned advantages of digital document management, you can also impress clients by being as organized as possible in preparation for closing. A closing checklist is a great resource to make closing go smoothly.
A cleaner closing process starts with digital document management … but even within DMS, there are better ways to handle closings digitally. A software solution like SetBuilder takes document management to the next level by providing an easy way to combine and organize sets of documents in one location entirely within the secure NetDocuments infrastructure.
SetBuilder is specifically designed with law firms (and closings) in mind, allowing you to coordinate closings, automate manual closing binder processes, and drastically accelerate the time-consuming and manual traditional closing process.
With SetBuilder, law firms are equipped to handle business and closing complexity with ease, manage the increased number of involved parties, limit the waste associated with physical document management, and help exceed client expectations. Needless to say, your staff won’t be disappointed to see your firm jump ahead of the curve.
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