Corporate & Securities Law

Open-Source Law and Contract Drafting?A Dead Skunk in the Middle of the Road

By Ken Adams

In this item on his blog, the inestimable Ron Friedmann ponders the extent to which an “open source” approach to work product would save time and money for law departments.

Here’s how Ron frames his thought experiment:

So assume that confidentiality, privilege, and competitive issues matter not, that law departments contributed a significant portion of work product?generated internally or by outside counsel?to a common pool (“The Corpus”), and that lawyers had software that allowed easy and effective searches of the Corpus.

The experiment?s goal is to to learn if lawyer efficiency would increase with access to the Corpus. The metric is the time lawyers would save (the ?Savings”) versus not having access to The Corpus. What are some possible findings?

After considering the possible results, Ron offers one conclusion?that “we lack sufficient data to begin to estimate the Savings,” and that that’s a problem, as “the legal market needs a better sense of how its processes work, what really drives work effort, and how to save time.”

I endorse the notion of this thought experiment, but I urge Ron to take into account one factor that he doesn’t mention?that when it comes to contract drafting, the Corpus would be a dead skunk in the middle of the road, stinkin’ to high heaven.

That’s because mainstream contract drafting is dysfunctional, in terms of both language and process. (Click here for my National Law Journal article to that effect.) The contracts in Ron’s hypothetical Corpus would be a motley assemblage exhibiting, in general, deficient and inconsistent language. Furthermore, anyone hoping to dip into the Corpus would have to determine whether a given contract was reliable, in terms of deal mechanics and the law?a time-consuming task, and often a hopeless one. And it would be similarly problematic to reverse-engineer a given contract to determine what deal points or negotiated concessions lay behind which provisions, and then adjust the contract accordingly.

But it doesn’t require much imagination to get a sense of what Ron’s Corpus would look like for purposes of contract drafting: it would presumably look something like the SEC’s EDGAR system, in all its garbage-in-garbage-out glory.

These problems of consistency and reliability are why it’s hopeless to expect a “wisdom of the crowds” approach to bring efficiency to contract drafting. The only way to dramatically reduce costs and increase quality and reliability, for both law firms and law departments, would be to outsource to a suitably authoritative vendor the process of preparing and maintaining a library of document-assembly templates of the main categories of business contracts and organizational documents. Subscribers would use the system to quickly generate first drafts of much higher quality than could be achieved by scissor-and-pasting documents of questionable quality and relevance. And economies of scale would allow a vendor to accomplish what would be beyond the reach of most organizations, even assuming they had the necessary ambition and expertise.

This isn’t a new idea, but it would be, to use Ron’s words, “one way lawyers might save time and money and deliver more value to clients.” The only obstacle is inertia. And these days, inertia ain’t what it used to be.

By the way, click here for my April 2009 conversation with Ron on bringing change to contract drafting.

Full post as published by AdamsDrafting on April 19, 2010 (boomark / email).