Law firms and in-house legal professionals manage a voluminous amount of documents—contracts, spreadsheets, scanned cases, digital files, and even images. Handling all of them manually can be a time-consuming challenge.
To make things easier, many companies use legal document automation software designed to not only store and organize files but, most importantly, save time by drafting and templating legal docs, as well as negotiating, collaborating, approving, signing, and analyzing documents in a well-designed automated interface.
However, the tricky part of implementing document automation for legal operations is the jargon used. When you communicate with software vendors and IT specialists or read the text of user manuals or articles, you may encounter terms you don’t understand as a lawyer. Deciphering those words can be annoying and tedious.
We gathered an unabridged legal document automation glossary with terms explained in simple words and illustrated by examples. It will help you easily understand the terminology when implementing and using legal document automation software at your company.
Document Drafting and Template Authoring
Benchmarking is the process of comparing quantitative evaluations of key metrics or KPIs with given standards to analyze and enhance performance.
Document drafting involves creating the initial version of a legal document based on a software’s dynamic template. If no negotiation is implied, a draft can be the only version to process.
In document automation, the term “document imaging” refers to the process of scanning and converting paper sheets to an image.
Enterprise Resource Planning (ERP)
ERP refers to the software used to manage and integrate a company’s business processes. An ERP system combines internal and external management information across an organization, including finance/accounting, production, sales and service, customer relationship management, etc.
A full-text search is a form of searching that compares every word in a search query with every word in a document and/or database.
An image is a visual digital file. This can be a photograph, scanned document, scheme, or any other type of information represented in a graphical format, such as JPG, GIF, or TIFF.
A list or catalog of names, topics, documents, etc. which may include several levels. The page you are reading now is an index of document automation terms. An index is a type of metadata.
Intelligent Character Recognition (ICR)
ICR is a handwriting recognition system that allows a computer to recognize fonts and different handwriting styles to derive a textual value from a scanned segment of handwritten text. ICR is often used for handwriting decryption.
Metadata means “data about data.” For example, an index of all the documents you have is metadata. Another example is information about a specific file: name, when it was created, the owner, etc. Metadata is used to structure information in a way that is easy to search, analyze, and automate with the help of data management software.
Optical Character Recognition (OCR)
Optical Character Recognition is the technique of translating words in a scanned image into text.
Optical Mark Recognition (OMR)
The method of capturing human-marked data from document forms such as surveys and tests is known as optical mark recognition.
It is a method of gathering information in the form of questions that can be used to draft a document, e.g., inside AXDRAFT; information from such a survey can be used to automatically adjust and update the text of a document based on the answers received.
There is an intermediate state between a structured document and an unstructured one. For example, you may have invoices with a pre-built general structure, but specific fields may be unique in each case.
Standardized documents that always have the same format or layout. Credit applications, NDAs, surveys, and order forms are examples of structured documents.
Tutorials are documents that are intended to teach a user about something in a step-by-step form. Typically, tutorials are text documents, videos, screencasts, presentations, images, or even audio files that include directions.
Unstructured data is information that lacks a predefined data model or isn’t organized in a predetermined way.
Unstructured documents are ones in which data is not structured in any way, and the information is free-form.
Document Management & ECM Terminology
Access rights and permissions in document management software are the settings used to ensure that everyone has access to the necessary piece of data, and at the same time, nobody extraneous is allowed. These settings may be custom or based on pre-set access levels, such as “user,” “administrator,” “editor,” “reader,” etc.
The administration level is the highest access level to a system. It usually allows users to make changes intended by software features, including managing users and access levels.
This means moving data to a less-frequently used folder or storage to free space in a more frequently-used one.
Annotations are explanatory notes that are often added to documents, both in paper and digital forms.
All activity in digital documents is tracked by document management software. These activities are recorded in a database known as an audit trail.
Auto-fill is a feature that allows users to automatically fill specific sections with data based on the information they previously entered elsewhere. It may include frequently used email addresses, counterparty names, titles, or governing laws.
Capture refers to converting a paper document to a digital document and/or extracting data from a form. Electronic documents can be captured and stored in a document repository.
In some document automation solutions, documents can be set to be edited by just one person at a time. In this case, check-out means activating a feature that blocks simultaneous edit access to a digital document. Respectively, check-in means deactivating this feature.
Collaboration is allowing multiple users to access, change, and manage documents. A popular example of a collaboration tool is Google Docs, where you can open and edit files alongside other parties at the same time. Also, it is a popular contract lifecycle management (CLM) software feature.
Configuration is the process of tailoring a tool’s settings to meet user requirements.
Contract Automation Software
Contract automation software is an application that is used to automate repeated tasks in contract management: drafting contracts based on the pre-built templates, signing and storing contracts, etc.
It is a set of services related to creating and maintaining contracts or other types of legal documents. They may be integrated into a bigger product or come separately.
Contract Lifecycle Management
Contract lifecycle management refers to the manual or automated administration of contracts throughout their key stages (planning, authoring, negotiations, approval, signing, obligations tracking, compliance, renewal, and analysis). A well-established contract management process may decrease contract risks and improve client conversion rates.
A dashboard is a type of interface that displays data to users. For example, a web analytics dashboard can display employee statistics or documents stats, such as how many contracts were created in total or how many times a specific contract template has been used.
A database is a type of software or a document that is intended to store data. You may have a spreadsheet with all your customers and their contact information—an example of a simple database or a complex customer management software that includes a database with the customer data usually hidden on the back-end.
A digital archive serves the same purpose as a physical archive—it’s a place where old and rarely-used documents are stored. An archive may be internal (a separate folder/section in a system) or external (a hard drive, a flash card, etc.).
Digital Document Management
Document management refers to storing, tracking, and capturing documents of different formats, manually or with the help of a document management system.
Digital Signature (E-signature)
A digital signature is the electronic equivalent of a handwritten signature or a stamped seal. A digital signature usually includes the full name, company name, job position, and contact information of the signature owner.
Document automation involves delegating repeated operations related to document management to the software, such as creating template-based contracts to save time and improve productivity. For example, document automation for sales teams may significantly improve their productivity because this is usually one of the most overloaded departments in document turnaround.
Document Management System (DMS)
Document management system refers to software that manages the filing, distribution, storage, and retrieval of documents generated internally or taken from external sources.
Document security is keeping all of your documents safe from unauthorized access, misuse, or data loss. Usually, a data management system is used to grant a high level of document security.
Document version is a term used to describe a document’s state that’s different from the first draft. Usually, data management systems allow tracking all the changes made to documents, identifying what updates were made and by whom, as well as restoring older versions of documents.
Enterprise Content Management (ECM)
ECM refers to methods and tools used to capture, manage, store, preserve, and deliver content and documents for large-scale organizational processes.
An eForm (sometimes spelled as e-form or electronic form) is an interface that allows users to enter data in a form that is then sent to a server for processing or storing in a database.
Form processing is a method of capturing information entered into data fields and sending it straight to the database. Examples of such information can be a company name, address, values, or a customer ID number from an invoice.
Document formatting refers to a certain way a document is visually organized. Formatting can be done using elements such as font selection, font size, presentation (e.g., bold or italics), space, margins, alignment, columns, indentation, and lists.
Indexing, which can also be called “tagging,” is the process of assigning descriptors to documents, for example, NDA, MSA, DPA. Indexing makes it easier for users to search for particular files.
Information management refers to the acquisition, organization, storage, and distribution of electronic and physical data. For business information management, data is viewed as a corporate asset and thus, is captured, stored, and shared corporately.
Intelligent indexing is an automation system that extracts the most significant metadata from scanned documents and uses it to populate index fields automatically.
Legal technology, commonly known as Legal Tech, is the application of technology and software to support the legal sector, provide legal services, and improve the efficiency of legal work.
A logic tree is a visualization tool used to describe a sequence of processes with possible variants, such as success or failure of certain steps, yes or no cases, etc.
A metric is a quantitative measure that can be used for assessing, comparing, and tracking performance or production. Legal metrics may include the number of matters handled by a department, outside counsel evaluations, the number of contracts drafted within a certain timeframe, etc.
Mobile capture refers to the use of mobile devices to capture, access, and process information in the form of photos, documents, signatures, or any other digital format.
A notification document refers to a document specified by a trustee and an administrator of a software platform to notify eligible participants about valuable events.
The term “operations” refers to a complex input field in answer forms, such as the signature field. It creates an answer by doing calculations or translating data into other formats.
A paperless contract is one that is assembled, distributed, signed, exchanged, and stored online rather than on paper. Paperless contracts are easier to handle with contract management software.
Optical character, intelligent character, and optical mark recognition software are data entry applications used to translate characters on a page into a text document that a word processing computer can read. Recognition software can also convert manually penned text characters into machine-readable ones.
Records management is a set of operations aimed to systematically supervise the development, distribution, use, preservation, and disposition of recorded information kept as proof of company activities and transactions.
Document management solutions often include document reminders—automatic notifications that ensure tasks are completed on time.
Self-service document automation means creating, signing, and delivering legal documents based on templates and forms processing with no input required from legal staff. A good example of this is AXDRAFT’s QuickDocs.
It is a set of visual brand guidelines that define a distinctive look of a document and keep it in line with the brand identity.
A tag is a label attached to documents to group and manage them in a more convenient way. You may tag documents by type (“NDA,” “contractor agreement,” “lump sum contract”) or by clients.
Taxonomy refers to the principles of categorizing, describing, and grouping files in a convenient way to users.
Revision Control (Version Control)
Maintaining the original document’s integrity is a critical component of any document management system. Versioning saves each iteration of the document, as opposed to overwriting it, allowing users to revert to an earlier copy.
Artificial Intelligence (AI) refers to the study and development of computer systems capable of mimicking human intelligence, such as speech recognition, language translation, grouping files, analyzing data, etc.
Cloud (Cloud-Based Computing)
Cloud computing refers to the on-demand availability of computer system resources, particularly data storage and computational power located on remote servers.
Cloud Office Automation
Cloud office automation is a cloud-based system that enables businesses to optimize operations by utilizing electronic document management and automated workflows.
Software can support rules or conditions that compel particular processes to change based on data input, according to conditional logic. For example, there may be a dynamic Q/A survey where conditional logic is used to add or remove contract clauses based on the answers users choose. Another example is a custom approval flow that involves the right team members when a certain condition within a contract workflow is met.
A hosted application is any program installed on a distant server and is accessible and used over the internet.
Machine learning is a method of data analysis that automates the creation of analytical models. It is a branch of artificial intelligence based on the idea that systems can learn from data, identify patterns, and make decisions with minimal human intervention. In legal document management, machine learning may be used to automate flows and specific stages, e.g., reviewing documents, analyzing surveys or statistical data, etc.
A placeholder is an element of a document that is not filled with information and holds a place for the future final text, image, table, etc. For example, a document may contain an e-signature placeholder to be filled in by parties.
Process automation is the transformation of any manual or paper-based process into a digital process completed automatically by software.
It is a technology where IT services or infrastructure are provided by a third party through the internet as a service. These may include storage capabilities, virtual machines, or software applications. An example of a public cloud is Google Drive, where you pay for using their storage.
SaaS is an abbreviation for “Software as a Service.” It refers to a licensing and delivery model in which software is offered on a subscription and hosted centrally or in cloud space rather than on a user’s computer.
SSO, or single sign-on, is an authentication mechanism that allows a user to log onto numerous linked but separate software systems using a single ID and password. An example is when you’re offered to log in with your Google or Facebook account credentials.
Audit & Compliance
The term “audit” has a wide range of uses in business. It is most typically used to denote the rigorous examination of internal processes and documentation in a company to guarantee correctness and compliance.
The California Consumer Privacy Act (CCPA) allows Californian individuals the right to see which data a company gathers about them, request a copy of that data, learn whether the information has been sold or shared with another company, and say no to additional data distribution.
The General Data Protection Law (GDPR) is a data protection compliance regulation announced by the European Union in April of 2016. The GDPR aims to regulate, strengthen, and standardize data protection for all European Union citizens.
HIPAA is a series of government rules aimed at protecting personal health information while also facilitating the efficient and secure transfer of that data.
A key performance indicator (KPI) is a type of performance measure used to assess the success of business operations or a specific activity in which it participates over time. The total cost of services, cost per matter, and contract review time are typical examples of legal KPIs.
The Protection of Personal Information Act, abbreviated as POPI or PoPIA, is South Africa’s version of the General Data Protection Regulation of the EU (GDPR), which protects the personal data usage of its citizens.
Sarbanes-Oxley is a federal law in the United States that enhances financial reporting standards for corporations and publicly traded enterprises. The 2002 act further increased criminal penalties for those who fail to comply with the requirements.
SOC-2, also known as Service Organization Control 2, is a standard specified by the American Institute of Certified Professional Accountants (AICPA) to ensure clients’ data protection for cloud storage providers. In document automation software, SOC-2 compliance is a high level of clients’ data security, which is especially important for legal operations.
IBM i (iSeries – AS/400) Terminology
Encryption is the process of turning information or data into code, particularly to prevent unwanted access.
File Transfer Protocol (FTP)
File Transfer Protocol (FTP) is an application layer protocol in the Internet Protocol Suite that employs TCP and Telnet services to move large amounts of data between machines or hosts.
Operating System (OS)
An operating system (OS) is a set of system programs that controls how a computer system operates as a whole. Examples of operating systems are Windows and Mac OS.
Open source describes software for which the original program source code is freely available for redistribution and modification.
User Roles and Permissions
Different users within a software may be assigned different roles (e.g., administrator, manager, user) and have different access levels or permissions to different features. For example, an administrator may have the rights to add and delete users, and a manager may have access to financial reports.
Virtual Private Network (VPN)
A private encrypted network connection may be used by external users to get access to a company’s internal resources or to increase the level of data security.
A workstation is a terminal or microcomputer that allows a user to run applications and is typically linked to a mainframe or a network.
Workflow and BPM Terminology
Processes can be broken down into smaller parts or sub-processes. In document automation, activity is defined as the smallest sub-process that a business process team chooses to show on their process diagrams.
Activity Cost Worksheet
Activity cost worksheet is a grid or matrix that can calculate the expenses of a series of actions.
Ad Hoc Workflow Systems
Ad hoc workflow systems rely on users to specify what happens next rather than a predefined scenario.
Application Programming Interface (API)
A set of definitions for how one piece of computer software communicates with another (e.g., to integrate with each other smoothly) is known as an application programming interface (API).
Approval flow is a type of business procedure that includes formal compliance steps of a document or process and requires approval of a specific person to progress from one step to another.
An asynchronous process occurs when one activity delivers a message to another but does not wait for an instant response.
Batch processing is a step in either human or computer procedures where a large number of items are gathered and then processed collectively. An example of this is bulk contract drafting or bulk signing.
Benchmarks are points at which two documents, processes, or other types of data are compared. KPIs are often used as the simplest benchmarks: if a KPI is achieved, then the process has been performed correctly.
BPM (Business Process Management) is a software that automates, performs, and monitors business processes and repetitive tasks by linking people to applications.
BPM system is a management approach that governs a company’s process environment to improve agility and operational effectiveness.
Business Intelligence (BI)
Business Intelligence refers to systems and tools that analyze data based on previous company activities and metrics and forecast future performance for better decision-making. For example, BI software may predict changes in a market based on the previous fluctuations. The more that data is uploaded to a BI, the more precise the result may be.
Business Process Automation
Business process automation refers to using computer systems and software to automate processes that used to be accomplished manually.
Business Process Management (BPM)
BPM refers to analyzing company processes, improving them, and aligning with a company’s strategic goals. BPM can also refer to various automation efforts, such as document or workflow automation.
Business rules are statements that describe a business policy or decision-making procedure.
Tools such as discussion forums, dynamic workspaces, and message boards used for communication and working over the same processes simultaneously are called collaboration tools. The most typical examples of such are Slack, Google Hangouts, Asana, and Google Docs. But also, collaboration tools are often offered as a part of a BPM or CLM platform and work to break down intra- and inter-departmental communication barriers.
Customer Relationship Management (CRM) system is software that manages the company’s relationships and interactions with current and prospective customers. This may include customers’ contacts, deals, documents, and any other type of data that may be necessary.
The process of leveraging digital technology to develop new—or change current—business processes, culture, and customer experiences is known as digital transformation.
IT integration, or systems integration, is the process of connecting data, applications, APIs, and devices throughout an organization to make it more effective, productive, and flexible.
On-premise software refers to all software that is installed on a company’s servers and behind its firewall.
A packaged application is a fully-fledged app that can be used and customized as is, without any prior changes or updates required.
A platform, in one of its meanings, is another name for SaaS (Software as a Service). It is software that does not require installation and may be used on-demand via the internet. There are various types of SaaS platforms: collaboration, client management, document management, project management, accounting, and others. Some examples are Google Apps, Zendesk, Slack, and Trello.
A business playbook is a collection of a company’s operations, rules, and standard operating procedures (SOPs). In contract management, a playbook is the list of terms, rules, and conditions necessary to maintain during the creation and negotiation of a contract, including the non-negotiable clauses.
A collection of operations and transactions that an organization engages in regularly to achieve its goals.
Process optimization is the practice of increasing organizational efficiency by improving various processes.
A roadmap is a strategic plan that describes a goal or intended outcome and the essential actions or milestones required to achieve it.
A BPM component that regulates the flow of information and actions inside a process based on the formulas and rules that have been uploaded to it.
It is a workflow where only the client and the software do all the work, and no input or action from the legal staff is required. For example, a contract may be created based on a template and the inputs taken from a Q/A survey filled in by the client and automatically sent for signing to the right person.
Each significant process is generally split into smaller sub-processes, which are usually depicted on a separate process diagram.
Webhooks are API-like features that enable apps to connect with one another by delivering real-time information in response to certain events.
Workflow is a broad term that refers to any process that consists of a sequence of tasks. This can be a business or an application process where completing the sequence allows achieving a goal. An example of this is a contract workflow consisting of tasks, such as contract initiation, terms negotiation, approval, and monitoring.
A diagram representation of tasks and decisions that make up different business processes. It’s a visual aid that helps you understand how a process works.
Workflow System or Engine
A software application or program for document workflow automation that assists analysts in defining a process and the rules that govern process decisions.
AXDRAFT document automation platform will help you digitize legal contract workflows and feel confident in a world where operations no longer require a physical presence.
Our QuickDocs service allows you to draft legal documents yourself in minutes—filling in the necessary data, signing the contract, and delivering it to your client, self-service. You can also store the documents and retrieve specific information within the app. Try an instant demo or sign up for AXDRAFT document automation to cut down on time and spendings, manage your workflow, and streamline the contract process.