See
http://support.microsoft.com/kb/826838. There, MS has this:
Quote:
Q6: Can you use a Merge field in the Subject box of an e-mail message?
A6: No. You can only type text in the Subject box of an e-mail message.
Note Microsoft Publisher 2007 or Publisher 2010 provides support for this.
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Similarly,
http://support.microsoft.com/kb/294694 says:
Quote:
Step 6 of 6: Complete the merge- Click Electronic Mail.
- When the Merge to E-mail dialog box appears, select the field that you want to use for the To line, type the subject in the Subject line, and then select the mail format that you want to use.
- Click OK to send your messages.
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Since your propsed filename comes from a mergefield, these two articles seem to rule out doing it automatically with Word's standard tools. Your friend could, perhaps, have a macro that runs in the background when executing the mailmerge. One wouldn't necessarily see anything unusual when this happens and the email personalisation might be the only visible effect.