Kerning is the adjustment of specific pairs of letters to improve spacing and fit. (It differs from letterspacing, which affects all pairs.) Most fonts come with hundreds and sometimes thousands of kerning pairs inserted by the font designer.
Below, notice how kerning reduces the large gaps between certain letter pairs, making them consistent with the rest of the font.
Font without kerning

Kerned font

Always use kerning. By default, kerning is not activated in Word or WordPerfect, so you have to turn it on yourself. If you use paragraph and character styles, turn on kerning as part of your style definitions.

What a great tip. I Wish I knew about kerning when I was a line or two over the page limit in legal writing! LOL
But on a more serious note, this is great tip I have applied to many of forms I use. While the change seems slight on your computer screen, when you compare printed versions of a document,the one with kerning looks much more professional.
Question -
Microsoft Word has a (hidden) setting called KerningByAlgorithm. Microsoft’s description is scant: “kerns half-width Latin characters and punctuation marks.” Are you familiar with this Word property, and do you have an opinion regarding whether it should be used?
Not familiar with it, though in general, any automatic-kerning schemes should be regarded with suspicion because they override the kerning the font designer made. If I have the choice between using the font designer’s work, or relying on a software guess, I’ll always pick the former.
How can I turn on ligatures and kerning for Equity…or is this automatically done by using the font?
Depending on your word processor, you may still have to take extra steps. In Pages, kerning is always activated, and ligatures are activated by default. In Word, neither ligatures nor kerning are activated until you choose them from the Font formatting dialog box.
MB — Word 2010 asks you to kern fonts “above” a certain point size. To ensure that the body text font is always ‘kerned’ I assume that the point size specified in the dialogue box should be smaller than that which is used for the actual body text? Ligatures also present you with an option for ‘standard’ or ‘historic’ — I am also assuming that ‘standard’ should be the default setting.
Kerning: you are correct. The smallest size that can go in the box is 8 point, so you can set it there and never worry.
“Historic” ligatures are old-timey variants that are included in very few fonts. Standard ligatures are the ones that matter.