The Times (New Roman): They are a-changin'

Volatility, carnage, investors fleeing the market. The S&P500 officially in a bear market over in the United States. Crypto portfolios bleeding by the bucket. 2022 is already turning out a pretty crazy year. So naturally, I’m not going to talk about it at all. Today my beef is with a problem that’s plaguing the nation, and is making lawyers across the country lose their sleep. This is a rant about the usage of weird fonts in Offer Documents.

But first, a little context. On a fine morning in the first week of August 2021, I opened up the Nykaa DRHP and was immediately confused. It looked off, like something was fundamentally wrong with it. It took me a couple of minutes to conclude what was actually amiss – the entire thing was drafted in the Arial font. Blasphemy!

Now, those of you uninitiated with the reading of DRHPs and Offer Documents will scoff. “What’s a little change of font got to do with anything”, you’ll probably say. But tell you what, there’s a certain degree of familiarity that one expects when reading a DRHP. The long-winded disclaimers; the risk-factor section that contemplates everything from the failure of the economy, to an invasion of fire-breathing chickens as a risk to the Company; the industry section full of hyperbole, capable of projecting any target market as attractive; you get the drift. It’s a well-worn path that’s easy to navigate with practice. But a simple change from Times New Roman to Arial is capable of throwing the reader completely off track.

Since I was thrown off-track anyway, I did a little digging into legal typography and the comfort associated with certain fonts. One of the reasons given for the ubiquity of Times New Roman is that it's narrow without being illegible – meaning you can squeeze in more words per line without compromising readability. That arguably is its biggest advantage – you want to be able to focus adequately on the Risk Factor section of a DRHP, rather that thinking “Holy crap am I drunk, wtf is with that font” (like I did), and then waste 2 hours reading up on typography (like I did). To me, a good legal font is one that renders itself unnoticeable, and does not detract from the text matter.

There's actually a widely quoted resource on legal drafting called “Typography for Lawyers”, from where I’ve picked up a lot of trivia (link in footnote). The same blog goes into some pretty intense metaphysical ponderings about font choices:

When Times New Roman appears in a book, document, or advertisement, it connotes apathy. It says, “I submitted to the font of least resistance.” Times New Roman is not a font choice so much as the absence of a font choice, like the blackness of deep space is not a color. To look at Times New Roman is to gaze into the?void.        

(I mean, gosh dude, how did Times New Roman hurt you?)

This is how Times New Roman accrued its reputation as the default font of the legal profession—it’s the default font of everything. As a result, many lawyers erroneously assume that courts demand 12-point Times New Roman. In fact, I’ve never found one that does.        

I actually revisited the SEBI ICDR (the guidebook for all things DRHP) to cross-check this. It actually holds up. SEBI does dictate font sizes and even line spacing on occasion (uh, micro-managing much?), but doesn't give specifications about fonts in the DRHP for IPOs. The US Supreme Court does require lawyers to use fonts from the “Century” family, so it’s one of the few odd legal institutions to issue font guidelines (but then it’s also reportedly thinking of striking down Roe vs Wade, so it can hardly be considered the epitome of sound judgment).?

But more interestingly, and closer to the topic of IPOs, usage of different font size is apparently an indicator of success. If I were to get into statistics and correlations (and I will, you can’t stop me), new-age IPOs that have had Offer Documents with different typefaces have seen superb subscription. I know this sounds suspiciously like one of the curated statements in the industry section, but my proof points are Nykaa and Policybazaar. It’s clearly not enough to have an innovative business model, but one must also provide proof of that by having a ‘hatke’ font choice.?

Plainly, this is where a host of other new-age companies are going wrong. They’ve stuck to the traditional Times New Roman, and therefore suffered – OYO, Delhivery, Paytm, Mobikwik, CarTrade, Snapdeal are all Times New Roman. Who needs a clear investment thesis when you can have a DRHP in Arial or Helvetica or Comic Sans? Although we do have Navi Technologies that has gone off the beaten track and used some weird font – clearly that must mean it’s going to be subscribed 400x.

Drawing this cause-effect is patently erroneous of course – like that famous case study on regression that correlates annual deaths by drowning, to the number of Nicholas Cage movies released that year. But then again, thinking that the market arrives at sensible conclusions is misguided. Almost as much as using Arial in your DRHP.

In summary, I have a suggestion for SEBI to completely ignore – please consider standardizing font usage in offer documents. It’ll save the world from having to read a blog about it. Meanwhile, if there are any aggrieved legal counsels suffering because of these font change shenanigans, feel free to channel this meme with your clients:

Source for legal typography trivia: https://typographyforlawyers.com/ by Matthew Butterick