“Free” At All Cost?—A Response to Bill Carleton

Today I read Bill Carleton’s post “Outing Startup Legal Documents.”

In this May 2011 post (and in the comments to that post) I explained why I was less upbeat than Bill about the prospect of developing standard documents by having one or more unspecified persons boil down law-firm templates.

Given Bill’s latest post, I thought I might as well wade in again. I admire Bill’s passion and engagement, but when it comes to this topic I think Bill continues to bark up the wrong tree.

Here’s how he starts his post:

The prominent law firm, Gunderson Dettmer, is populating the Docracy site with templates for startup legal documents!

As of this writing, forms Gunderson Dettmer has posted include IP assignments, consulting agreements, NDAs and an employment offer letter.

This could be a very big deal.

Here’s what I think is significant:

Rather than post forms to its own site or other platform tied in with the firm’s branding, Gunderson is entrusting a third party with custody of the docs and, presumably, with the expectation that they will be subject to open curation.

Well, I don’t give a fig about Gunderson Dettmer’s templates. I had a look at their “mutual nondisclosure agreement” (here) and saw that it’s entirely undistinguished. It covers the obvious stuff, but using chaotically dysfunctional language. It gives short shrift to at least one of the many subtle issues raised by confidentiality agreements. The only customization offered is that you can add party names and jurisdictions of organization, plus a defined term for one of the parties—gee, thanks. And it provides zero guidance.

That Gunderson Dettmer should benevolently offer to the world such mediocrity should come as no surprise. After all, in this post from last month I reviewed and found sadly lacking a confidentiality agreement included in DLA Piper’s “Document Factory Starter Kit”—another initiative that Bill thought promising.

And I find much to critique in Big Law drafting generally: The Google–Motorola Mobility merger agreement (go here). A model confidentiality agreement prepared by a Big Law partner (go here). Doubtless there’s plenty of entirely competent drafting out there. But have to assume that it represents a modest proportion of the whole, as those Big Law contracts I happen to turn my attention to are invariably unimpressive. That’s presumably due to the disincentives built into the system; that’s something I discuss in my NYLJ article The New Associate and the Future of Contract Drafting (go here for a PDF copy).

So I’m not excited by Bill’s premise that if other firms were to follow Gunderson Dettmer’s lead, “It would blow the doors off the virtual Victorian safes in which law firms sequester legal templates.” Most law-firm templates don’t belong in a safe—they belong in the outhouse.

Bill disagrees; in this comment to my May 2011 post, he says, “I don’t see a strong case for reforming contract drafting style.” On that score, I’ve compiled my evidence in a book, thirty or so articles, and about a thousand blog posts. Perhaps Bill hasn’t had occasion to leaf through A Manual of Style for Contract Drafting.

But if for some reason anyone finds Big Law contracts worth emulating, there’s an endless supply of them already available on EDGAR.

And as for creating a “mash up” that would allow a set of definitive documents to be developed, automated document analysis simply tells you what’s in the documents analyzed—it doesn’t tell you what works. (See this July 2011 post.) For that, you’d need strong editorial control. I don’t think you could expect a regular transactional lawyer to select from, revise, and supplement the myriad unfiltered choices offered by automated document analysis and have the result be any sort of exemplar. I tried automated document analysis when preparing Koncision’s confidentiality-agreement template, but I quickly reverted to old-fashioned research.

So nothing I’ve seen gives any indication that we’re remotely close to any open-source nirvana.

Compare the Gunderson Dettmer confidentiality agreement to Koncision’s confidentiality-agreement template. If a chimpanzee banging on a typewriter rates a score of 1 and some notion of perfection rates a 10, I’d give Gunderson Dettmer’s confidentiality agreement a 3. And with whatever objectivity I can muster, I’d say that Koncision would have to rate very highly. (Go here to see what others have said about Koncision.)

You can subscribe to Koncision’s template for free for one-year. (Go here to do so.) And the charge will be nominal for anyone who wants to continue their subscription after the year is over. Yes, Koncision currently offers only one product, but what’s at issue here isn’t what’s currently available but what we should be aspiring to.

Ignoring the approach that Koncision represents in order to pursue Bill’s millennial notion of a hybrid open-source, crowd-sourced set of standard documents requires putting “free” above rudimentary notions of quality, reliability, and customization.

[Addendum: By the way, I ran a draft of this post by Bill, because I know that there's a fine line between acerbic and mean-spirited. He was wholeheartedly in favor of my publishing it. (Hi, Bill!)

And by offering Koncision as an alternative, am I undercutting my critique? I don't think so—a critique is enhanced if you offer an alternative. I know that the online readership is leery of self-promotion, but if having a stake in something precludes one from voicing any opinion regarding its benefits, public discourse would be the poorer for it. Advocacy becomes self-promotion only if you fail to take into account the competition. That's not an issue in this case, as there's no service out there comparable to Koncision. If and when one comes along, I'll tell you about it.]

[Updated February 28, 2012: Bill has posted here a response to my response. I posted a comment to his response to my response. I think that will do it for now! Oh, and Brian Rogers has weighed in too, in this post on theContractsGuy blog.]

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