This post from last October contains my report card on Rocket Lawyer’s document-assembly confidentiality agreement. My conclusion? It stinks.
This Starter Kit will enable you to generate basic agreements that a typical startup company would find useful: an employee offer letter, an employee proprietary information and inventions agreement, various forms of nondisclosure agreements, a consulting services agreement, and an exit interview declaration. You can choose which agreement to create and the Starter Kit will automatically generate it based on your responses to an online questionnaire.
In his post, Bill expressed interest in hearing what people think of the Document Factory, so I decided to subject one of its confidentiality agreements to the same sort of scrutiny as Rocket Lawyer’s. (I selected the option “Disclose confidential information TO someone else (Disclosures BY Your Company).”)
As with Rocket Lawyer, I graded the confidentiality agreement against Koncision’s template, to which I attributed a score of 100 in each of seven categories. (And no, that doesn’t mean that I think Koncision’s template is perfect!)
So here’s my report card for that Document Factory confidentiality agreement:
Customization. Score: 10
I awarded Rocket Lawyer’s confidentiality agreement a score of 25 for asking around twenty underwhelming questions. By comparison, aside from being asked to plug in obvious factual information, in completing the Document Factory questionnaire you’re asked a grand total of three questions relating to substance.
The first question asks you to name the state in which the disclosing company’s principle offices are located. (Your answer will determine the governing law of the contract. For some reason, your choice is limited to California, Maryland, Texas, or Washington. I’m not sure what you’re meant to do if your offices are located elsewhere.) The second question asks you to specify the county where the disclosing company’s principle offices are located; that will determine which courts have jurisdiction. The third question asks you to state why confidential information is being disclosed. And that’s it.
By comparison, a Koncision questionnaire of medium complexity—one that answers “No” to a fair number of the questions—can result in the user being asked around eighty questions of all types.
Guidance. Score: 0
Given that the Document Factory questionnaire asks almost no substantive questions, it should come as no surprise that it offers no guidance.
Usages. Score: 15
The output document you get after completing the questionnaire is chock-full of lame usages characteristic of traditional drafting: archaisms, redundancy, random verb structures, and so on.
And some carelessness was added to the mix. In skimming the output document, I noticed that the defined term for the disclosing part is “Company,” but the output document contained one instance of “the Company.” That sort of oversight would be trivial in a one-off document, but not in a document-assembly system that DLA Piper presumably intends would be used by potential customers.
Layout and Typography. Score: 50
The output document uses Times New Roman, a two-column layout, and fully justified text. In two instances, a single block of text uses two sets of enumerated clauses. And the last section is missing a section number. In other words, the output document isn’t a thing of beauty.
Technology. Score: 10
The questionnaire is so rudimentary that it requires only rudimentary technology. That being the case, I suppose I could give the technology a score of 100, but I’m not that generous. Instead, I compared it to ContractExpress.
The date I specified as the “effective date” was stated in the output document’s introductory clause as “January 01, 2012,” with the redundant zero. I assume that’s due to a limitation in the technology rather than a drafting decision. [Update: My assumption was incorrect! See the comments.]
And the “purpose” that you supply when completing the questionnaire is stated below the signature block in the output document—the least-useful place you could put it. Presumably someone could have figured out how to integrate the statement of purpose into the body of the contract.
Substance. Score: 50
If you ignore that lack of customization and the deficient usages, you’re left with a run-of-the-mill one-size-fits-all confidentiality agreement, for whatever that’s worth.
Some drafting decisions appear questionable. For example, the obligation not to disclose or use confidential information doesn’t apply to confidential information that’s in the public domain. Koncision’s template excludes such information from the definition of “Confidential Information”—an approach that makes more sense.
Credentials. Score: Not applicable
DLA Piper is a prominent law firm, but that fact doesn’t serve to remedy the Document Factory’s shortcomings. Instead, it might cause users to assume, mistakenly, that the Document Factory is a superior product. So in this context, credentials are misleading.
So Rocket Lawyer’s process isn’t as bad as the Document Factory’s, but the Document Factory’s output document wasn’t as deficient as Rocket Lawyer’s. So let’s call it a draw, although given the bloated “terms and conditions” that are appended to the Document Factory’s output document, I’m almost tempted to give Rocket Lawyer the edge.
It shouldn’t come as a surprise that the Document Factory is unimpressive. Most U.S. BigLaw contract drafting is mediocre, and as such makes unpromising raw material for automation. (Go here for my analysis of a representative sample of BigLaw drafting, the Google–Motorola Mobility merger agreement.) And more fundamentally, the obstacles to rigorous law-firm template initiatives, as described in this article, apply equally to automating templates.
Ultimately, the Document Factory serves as yet another reminder that when it comes to free business-contract templates, generally you get what you pay for.