Chasing Paper

In a profession that for hundreds of years has relied on pieces of paper, Enrico Schaefer of Traverse Legal is an anomaly. The Internet and intellectual property lawyer runs his practice unburdened by paper files and the myriad filing and management headaches that accompany them.

In court, his laptop has replaced the bins, wheeled files and briefcases his colleagues drag in. When a letter is referenced in court, a quick search pulls it up and allows Schaefer the time needed to prepare while his counterpart physically searches for paper.

Going paperless, he said, has saved him time and money, something both he and his clients appreciate.

“It has served us well,” said Schaefer, who says his firm was one of the country’s first to be 100 percent digital when he started it in 2005. “It’s all about efficiency and offering more legal services per dollar.”

Traverse Legal’s business model is simple: Front-end efficiencies mean he can charge about 50 percent less for legal services, a price point he says captures a larger market share.

As for why other firms aren’t 100 percent digital, Schaefer said the commitment to paperless must be absolute.

“Other firms still have the old guard who refuse to even open email,” he said.

“They’ve got secretaries printing it out to read. You can’t have half and half, because you lose time trying to find either a piece of paper or an electronic document.”

The Great Paper Debate

In January, government regulations prompted an entire profession to let go of paper. All physician offices serving Medicare and Medicaid patients were required to convert to electronic medical records, forcing thousands of physician offices to spend up to six figures on paperless technology.

Fortunately for other lines of work, like accounting and insurance, there has been no such decree.

Trina Kaplan, agency principal for Traverse City’s Fitzmaurice-Gavin Insurance Agency, said that while she likes the paperless concept, in reality it is not very likely.

“It sounds awesome, but the reality of it is not so easy,” she said. “If other businesses don’t go totally paperless, then we can’t, either.”

For example, when Kaplan deals with banks, any information exchanged is done
through snail mail or faxes.

“The banking industry is really slow [to change]; if they did, we probably could,” she said. “We want to be paperless; it saves us money and time.

While she couldn’t estimate the cost savings, which she says are used up by technological expenses, Kaplan said each paperless transaction personally saves 80 to 90 percent of her time.

And though some of Kaplan’s transactions are paperless – such as mechanics who use email to communicate and send photos of damaged cars – she wonders if her business will ever be completely paperless.

“We old timers, we like to touch paper. The little old lady who comes in wants that paper bill; she wants to see you write ‘paid’ on it,” she said. “Right now, I would say it’s a thing of the future.”

For one accounting firm, the “future” was in 2003 when Dennis, Gartland & Niergarth in Traverse City sunk nearly $100,000 into its paperless transition.

“At the time we thought it was the direction the industry was going, so we jumped on it early,” said Jim Shumate, DGN’s managing partner. “It was expensive, but I think we came out ahead. We still think it was a great move.”

Beyond the hardware and server upgrades, a significant portion of the cost involved training its 50-person office, plus getting its processes and procedures up to speed.

Now, DGN’s investment has turned into a recruiting tool, Shumate said.“We wanted to be current; the people we hire are so technologically efficient,” he said.

The one downside, Shumate said, is the learning curve of the software, which, compared to the “old days,” is significant.

The upside – beyond client access to secure files and more work at home flexibility for employees – really comes down to the bottom line.

“We’re more efficient, so our costs are controlled because our billing is based on time,” he said. “Since 2003, we’ve doubled our client base, but if we were a smaller firm, you’d have to weigh the costs.”

Lawyers And Legal Pads

Still, for the world’s oldest profession – law, that is – a completely paperless future appears hard for some to gauge.

Although Shaefer opened his practice with that intention and stuck to it, other older firms say that only “very boutique-y, niche-y areas of practice” can be purely digital.

“Some practice areas lend themselves very well to paperless; estates and trust, for example, do not,” said Tim Smith, a litigator with Smith & Johnson. “Some are driven by the court system, others by their clients. You have to have paper on some level.”

Smith’s firm of nine lawyers is medium-sized for the Grand Traverse region, which has about 500-600 attorneys in the bar association.

He said the firm just invested “a ton of cash” on collection hardware and software, enabling them to process billing in a much less paperless fashion.

“We have one client who has 6,000 files; I already see efficiencies there on just that one client,” he said.

Some courts, such Grand Traverse County’s 13th Circuit Court, are completely paperless, but since most attorneys work with multiple courts, they have to adjust accordingly, Smith said.

As for Smith, paper-free cases are his preference, in and out of court.

“Going into a trial with thousands of documents, I definitely prefer paperless,” he said. “It’s just faster – I can hit more files through the day if they’re digital. When you’re charging by the hour, everybody’s winning there.”