The daily routine of tax consultants, lawyers and notaries is dominated by (digital) paperwork. Above all, they have to collect and evaluate data and create documents. To simplify this process, many law firms rely on software that enables them to create legal documents automatically.
The problem with this is that these (digital) documents are usually only searchable and analyzable with a great deal of effort. This means that law firms have saved time in creating the documents. However, the greatest amount of time is still spent processing, analyzing and evaluating the documents.
However, software providers that automate the creation of legal documents for law firms can take the next step here. Optical Character Recognition (OCR) makes it possible to search through legal documents such as a rental agreement, a health care proxy, or a loan agreement, and to automatically collect and evaluate information from them. We show which legal documents software providers can integrate OCR into and how this can give them a significant competitive advantage.
This article was written in German, automatically translated into other languages and editorially reviewed. We welcome feedback at the end of the article.
OCR Functions
With OCR software providers can save their customers time not only in document creation, but also in processing, analysis and evaluation. OCR brings these functions to the table:
Automated data acquisition
With OCR, law firms can extract data from any form of document. This can include information such as client details, monetary amounts, and paragraphs. OCR can then process this data according to user-selected requirements and transfer it to other systems.
Document text recognition
Legal documents do not always come from a digital source. OCR can therefore also read and process information from scans and photos. So if law firms have a handwritten contract, for example, they can simply digitize it via OCR and then process it as desired.
Document classification and sorting
OCR enables companies to categorize legal documents automatically. This way, they can sort each legal document into the right workflow.
Digitization and archiving
Law firms can digitize physical legal documents with OCR and then archive them. This saves space, makes filing more secure and accessible to all employees at all times.
Translation and multilingualism
For international law firms in particular, it is essential to be able to process legal documents in other languages with the same level of performance. Advanced OCR technology can easily translate legal documents into over 100 languages.
What Legal Documents Law Firms can use OCR for
Law firms can use OCR to process legal documents from all areas of law. These include, but are not limited to, these documents:
Real estate law
For example, in real estate law, law firms can process, analyze, and evaluate the following documents with OCR:
- Land register extract: This document provides information about ownership, mortgages, land charges and other encumbrances that are on a property. Lawyers in real estate law use land register excerpts to check the legal status of a property before transactions are carried out.
- Lease: This is an agreement between a landlord and a tenant that sets the terms for the use of a property in exchange for the payment of rent. Real estate attorneys help both landlords and tenants draft, review and enforce leases.
- Contract of Sale: A document that sets out the terms of the purchase and sale of a property. Attorneys help buyers and sellers ensure that the contract is fair and remains legally enforceable.
Family law
In family law, these documents are particularly relevant:
- Divorce Certificate: An official document that certifies the end of a marriage. Family law attorneys assist clients throughout the divorce process, from filing the petition to issuing the certificate.
- Prenuptial agreement: This contract defines the property relations between spouses. Family lawyers help couples draw up such contracts to avoid future financial conflicts.
- Custody Statement: A document that governs the custody of a child. Family lawyers play a critical role in ensuring the best interests of the child and preserving the rights of the parents.
Labor law
The following documents, among others, are used in labor law:
- Employment contract: This contract defines the terms and conditions between an employer and an employee. Labor lawyers help to draft such contracts in order to clarify the rights and obligations of both parties.
- Cease-and-desist letter: A document in which someone undertakes to refrain from certain conduct, often in connection with trade secrets or non-competition agreements. Lawyers use these to protect their clients' interests.
Corporate law / Commercial law
In corporate and commercial law, for example, these documents are used:
- Extract from the Commercial Register: Provides information about a registered company. Lawyers use this document to obtain legal information about a company, e.g. about managing directors or capital.
- Memorandum of association: Sets out the structure and rules of a company. Lawyers help company founders draw up such contracts and ensure that they comply with legal requirements.
- License agreement: A contract that specifies the terms and conditions for the use of a particular product or service. Lawyers help draft such contracts and ensure that their clients' rights are protected.
Criminal Law
In criminal law, for example, law firms can use OCR to process, analyze, and evaluate these documents:
- Indictment: Sets forth the allegations against a person. Criminal lawyers use these to defend their clients against the charges brought.
- Judgment: A court's decision in a legal matter. Lawyers use judgments to understand their client's legal position and to appeal if necessary.
Data protection law
Data protection law includes, among others, the following legal documents:
- Privacy statement: Describes how a company handles personal data. Privacy attorneys help companies draft such statements to ensure that they comply with privacy laws.
- Terms of use: Set out the rules for using a website or app. Privacy lawyers review or draft such terms to ensure they are legally sound.
Insolvency law
In insolvency law, lawyers primarily use the insolvency petition:
- Insolvency petition: A petition to open insolvency proceedings. Lawyers in insolvency law assist companies or individuals in initiating such proceedings in order to settle their debts and best serve their creditors.
Copyright
Copyright includes, but is not limited to, the following documents:
- Copyright license: This is a contract that allows third parties to use a copyrighted work under certain conditions. Copyright lawyers help creators and companies work out such licenses to protect their rights while allowing their works to be used.
- Cease-and-desist letter: A formalized letter requesting a person or company to stop infringing copyright and to take steps to make amends. Copyright attorneys can send such cease-and-desist letters on behalf of the copyright owner as well as represent recipients of cease-and-desist letters.
- Statement of Consent for Use: A document in which the author gives consent for his or her work to be used in a certain way. Lawyers use these to obtain consent for the use of copyrighted works.
Tax law
For example, in tax law, law firms can use OCR for the following documents:
- Tax Return: A form sent to the IRS outlining income, expenses, and other relevant information to calculate tax liability. Tax attorneys can assist clients in completing their tax returns correctly and favorably.
- Tax assessment: A document from the tax office that determines the amount of tax to be paid. If clients disagree with their tax assessment, tax attorneys can file an appeal.
- Letter of objection: A formal letter addressed to the tax office to object to certain items in the tax assessment. Tax attorneys help draft such letters and defend their clients' rights.
Administrative law
Administrative law includes, among others, these legal documents:
- Appeal Letter: A formal letter addressed to an authority to appeal one of its decisions. Administrative law attorneys assist clients in substantiating their appeals and submitting them in the proper form.
- Administrative decision: An official notification from an authority about a decision in a specific matter. If clients disagree with a decision, they can appeal it with the help of an administrative lawyer.
- Statement of claim: A document filed with an administrative court to challenge an administrative act. Administrative lawyers draft such writs to represent their clients' interests in court.
Contract law
Contract law uses these documents, among others:
- Sales Contract: An agreement between two parties for the purchase and sale of goods. Contract attorneys help draft, review and enforce these contracts to ensure that the rights and interests of both parties are protected.
- Service contract: A contract that specifies the terms and conditions for the provision of services. Lawyers assist in formulating the exact description of services, payment and other relevant points.
- Confidentiality Agreement: An agreement in which one or both parties agree not to disclose certain information. Contract attorneys help draft these agreements to protect trade secrets and other sensitive information.
Traffic accident law
In traffic accident law, for example, these documents are used:
- Accident Report: A formal document that describes the details and circumstances of a traffic accident. Attorneys in traffic accident law use the report to evaluate their client's liability and potential claims.
- Damage appraisal: A report by an expert who estimates the damage and repair costs of a vehicle after an accident. This appraisal is often the basis for claims for damages.
- Attorney Correspondence: correspondence between attorneys, insurance companies, and other parties involved to enforce the client's claims and rights after a traffic accident.
Inheritance law
In inheritance law, law firms can use OCR to efficiently process the following documents in particular:
- Will: A legal document in which a person specifies how his or her assets are to be distributed after death. Inheritance law attorneys help draft wills to ensure that the decedent's wishes are legally correct and enforceable.
- Certificate of inheritance: A document issued by a court certifying the heirs of a deceased person and their share of the inheritance. Inheritance lawyers often assist their clients in applying for a certificate of inheritance and in enforcing their inheritance rights.
- Compulsory portion claim: A legal claim that close relatives have if they have been passed over in the will. Lawyers specializing in inheritance law advise and represent clients who wish to assert their right to a compulsory portion.
Medical law
In medical law, for example, these documents are relevant:
- Living will: A document in which a person specifies which medical measures he or she wishes or refuses in certain situations. Medical law attorneys advise clients on the legal aspects and wording of these directives.
- Informed consent form: a document that informs a patient about a medical procedure and its risks. Medical lawyers can help with disputes in Public health and advise on or represent the physician's duty to inform.
- Liability claim: A claim made when a doctor has made a medical error. Medical law attorneys assist patients in pursuing such claims and obtaining appropriate compensation.
Labor law
In employment law, attorneys primarily use these legal documents:
- Employment Contract: A contract between an employer and an employee that sets forth the terms and conditions of employment. Employment lawyers help both employers and employees draft, review, and enforce such contracts.
- Warning: A formal letter from an employer to an employee for misconduct or breach of duty. Employment lawyers advise and represent both employers in issuing such letters and employees who wish to take action against them.
- Termination letter: A letter declaring the end of an employment relationship. In case of disagreements or legal challenges regarding terminations, employment lawyers are the contacts for both parties.
Use Case of OCR in Legal Documents
How can software providers imagine the use of OCR in legal practice? Let's assume that a law firm has used software to automatically create an employment contract. However, it now needs to process it further. To do this, it must extract relevant information from the document and save it in digital form. Let's assume that the employment contract contains the following relevant information:
- First and last name of the employee
- Company name of the employer
- Work start and end date
- Salary and bonuses
- Working hours per week
- Vacation entitlement
- Notice period
OCR then proceeds step by step:
The OCR software recognizes the letters and characters in the document and converts them into machine-readable text.
The software recognizes the employee's first and last name and the employer's company name by identifying certain patterns such as name, address or company details.
The technology identifies work start and end dates by searching for and extracting consistent date formats.
The software identifies salary details, bonuses, hours worked per week, vacation entitlement and notice period by searching for numbers and currency symbols and converting them into numerical data.
After data extraction, it stores this information in a digital file or database - as requested and specified by the law firm.
The result: the law firm processes the legal document and the relevant information contained therein automatically and thus with maximum efficiency.
OCR Benefits for Legal Documents
With OCR, tax consultants, notaries, and lawyers can make their document management more efficient. How do they benefit?
Time saving
Law firms no longer need to manually enter data from legal documents. This saves time and resources. Employees can concentrate on more complex tasks.
Availability and accessibility of information
If legal documents are not only available digitally in a cloud, but the information they contain can also be easily accessed and evaluated, all employees have access to relevant data at all times.
Higher data quality
OCR technology works (almost) error-free. In contrast to manual input and processing, OCR thus ensures enormously high data quality that law firms can rely on.
Space saving
With OCR, law firms reduce their physical storage costs. Because: There are no more stacks of files in the workrooms.
Higher data security
OCR increases the security of legal documents by making them easier to encrypt, secure, and back up.
Compliance and audit trail
To comply with compliance guidelines and audit trails easily, OCR technology makes the history of documents traceable. This saves time and labor.
Environmental friendliness
If law firms no longer have to print out legal documents such as employment contracts or wills in order to process them, they save a lot of paper. This protects the environment.
Easily integrate OCR into your software with Konfuzio
Make the versatile OCR technology available to your customers as well. With Konfuzio, you can quickly and easily integrate it into your legal document software. An easy-to-understand interface then makes it easy for your customers not only to create legal documents automatically, but also to process, analyze and evaluate them. This makes Konfuzio particularly suitable for large law firms that need to process a large number of legal documents on a daily basis.
To enable Konfuzio to process unstructured data automatically, the software relies on artificial intelligence and machine learning.
At its heart is the powerful optical-semantic AI, which combines OCR, NLP (natural language processing) and CV (computer vision).
Include intelligent OCR technology in your legal document software now and create further, high added value for your customers.
FAQ
Legal documents are written records that contain information about legal agreements, transactions or legal aspects. They include contracts, deeds, laws, court decisions and other legal texts. These documents serve as legal evidence and rules for the parties involved. Legal documents can be in physical or digital form and often need to be precise and easy to understand in order to maintain their legal significance. They play a critical role in the practice of law and are used by lawyers, judges, businesses, and individuals to clarify and document rights, obligations, and legal disputes.
OCR is used with legal documents to digitize printed or handwritten text. The software recognizes the letters and characters and converts them into editable text. Lawyers use OCR to efficiently digitize paper documents. This allows texts to be searched and edited. OCR makes it possible to quickly search for relevant information in legal documents. The technology helps manage electronic files and increases productivity.
Law firms benefit from OCR in document management through time savings, higher data quality and accessibility of information. Space savings, increased data security, compliance, and environmental friendliness are additional benefits. OCR enables efficient work and saves resources by eliminating the need to manually enter data. Relevant documents are easily retrievable, securely encrypted, and available digitally in an environmentally friendly way.
