The Three Things You Need for Optimal Contract Creation

Building an effective process for creating contracts is rather like eradicating polio: you can't do it piecemeal.

For one thing, you can train your contracts personnel in clear and modern contract drafting until you're blue in the face, but it will be for naught unless you also give them clear, modern, and effective templates. People draft contracts by copying, so if all they have is templates that exhibit the shortcomings of traditional contact drafting, that's what they'll copy.

And your templates won't be as clear, modern, and effective, or as consistent, as you'd like them to be unless your company follows a style guide for contract language.

All that sounds like a lot of work, but it doesn't have to be.

Revising Templates

When revising your templates, avoid "drafting by committee." That usually involves people spending months debating, based on dubious conventional wisdom, what to include in a template.

And more generally, being expert in your company's transactions doesn't make you an expert in contract language, any more than knowing how to drive a car makes you an expert mechanic. Contract drafting is a specialized kind of writing: leave it to specialists. (Yes, I'm a specialist.)

Implementing a Style Guide

Any kind of writing benefits from use of a style guide. Given the limited and stylized nature of contract prose, and given what's at stake, contract drafting is particularly suited to use of a style guide.

And the idea of a style guide for contract drafting is catching on. For example, in 2015 Adobe Systems made public its style guide. That's something I wrote about in this blog post.

But it doesn't make sense for a company to develop its own style guide. The way style guides usually work is that someone with suitable credentials develops a style guide that others adopt. Witness how the publishing world consults The Chicago Manual of Style.

Originally I had in mind that my book A Manual of Style for Contract Drafting would be a style guide, but that's no longer conceivable. It's too big and offers too much explication for it to be a handy reference. (The fourth edition, to be published in September, will weigh in at around 700 pages.)

That's why in 2018 I'll be publishing with the American Bar Association a shorter, more accessible version intended for all contracts personnel at a company. It will be called Drafting Clearer Contracts: A Concise Style Guide for Contract Drafting. I'll be putting together a working group of my consulting and seminar clients, to make sure this book addresses their needs. Let's see if it catches on.

Developing Effective Training

Once you have suitable templates and a suitable style guide, you would need to provide training in how to use the templates and how to draft and review contracts consistent with the style guide.

I think it's early days yet for training. I offer my "Drafting Clearer Contracts" seminars and webcasts. And obviously there's A Manual of Style for Contract Drafting. But I have in mind at some point developing an online certification program. That's something I'll start thinking about next year.

The Wild Card: Automation

A possible fourth element for optimal contract creation is automation. Instead of using copy-and-paste, you create contracts by answering an annotated online questionnaire.

In addition to allowing a level of customization way beyond what you can achieve in a Word document, and allowing you to capture that customization way faster than you could in Word, automation also provides another venue for training. By consulting the annotated questionnaire, those who use the system would obtain training exactly when they need it: when they're making decisions regarding a transaction. That's why an automated questionnaire is the best way to provide transaction-specific training.

Whether automation makes sense depends on whether you have sufficient deal volume, sufficient deal value, and sufficient customization to justify the the cost and time required to automate a template.

For more about automation, see this article about my automated confidentiality agreement.

Cost-Benefit Analysis

So that's what needs doing if you want an effective process for creating contracts. But determining what makes sense for your company requires a cost-benefit analysis. What are the drawbacks of your current process? How much would it cost to change it? What would be the benefits? What are the impediments to change?

It might be that your needs are satisfied by your current process. But you won't know unless you ask the right questions. If you think I could help you, you're welcome to contact me.

(If you want more on these issues, see my 2015 article with Chris Lemens in the ACC Docket, here.)