Why don't they demand better documentation? If they were to ask for us to produce ER diagrams and documentation, I'd hope most of you could produce one, even using SSMS or some other tool.
No, no, no!
THIS is the problem. ERD is NOT (just) documentation. ERD is the bedrock of your design, it is at the same time the actual design, the complete documentation of the design and (if you're smart) grist for the tool that creates the scripts that create the database. Any alterations that are made are made to the ERD first and then fed via the ERD tool to your development database.
Personally I use (and live by) ModelRight, an ERD tool that does all of the above. It lets me design the physical model (which for me is conceptually identical to the logical model), it creates the scripts, it lets me create the comments that describe the tables, columns, and the standardized data dictionary column types. Further, when changes happen it lets me simultaneously make the changes, document them and creates the database ALTER scripts for me.
ModelRight enforces consistency of data types, it verifies all the t's are crossed and the i's dotted. It will verify the model's consistency. It lets you automatically create columns for foreign keys simply by creating a relation--and it can delete the FK by deleting the relationship.
It even follows my own custom naming conventions automatically!
There are other ERD tools, of course, like Rational Rose, but they tend to be really expensive (read thousands or 10s of thousands each copy) but I can't imagine not using a rock-solid ERD tool. They're literally CAD for databases!
Plus you can put the ERD into a version control system. 😀
As a lone-wolf developer/DBA/etc. I couldn't function in the SQL Server world without it. If you don't use an ERD tool (one that handles scripting and reverse-engineering) you're going for a swim wearing a 10 ton weight chained to your ankle. Why put yourself to the (man-years) of additional unnecessary drudgery?