I learned from this post by Bob Ambrogi that Avvo, an online legal-services marketplace, has announced that it “has added a selection of no-cost, high-quality legal forms for family, business, estate planning and real estate to its website.” Avvo apparently expects to have more than 200 forms available by the end of 2016.
With no enthusiasm, I duly completed the questionnaire for one of the forms on offer, a mutual nondisclosure agreement. (Go here for a PDF of the output document.) Here are my impressions.
The Technology
Avvo’s “wizard” offers bare-bones fill-in-the-blanks functionality, so you can forget about meaningful customization. It can’t even add or eliminate sections based on how you answer the questionnaire, hence inclusion of a bracketed section in the output document, with the notation “Include if concerned about publicity.”
The best thing you can say about the technology is that the questionnaire is uncluttered, has purty colors, and works on different platforms.
The Questionnaire
In the questionnaire, you’re asked to specify the following:
- the date
- the party names
- the nature of the business opportunity being explored
- what information of both parties remains confidential even if it’s not identified as confidential
- the governing law
- which courts (by county) have jurisdiction
- the signatories
- address information
But to get a sense of the effort that wasn’t put into this questionnaire, you have to consider the details.
You’re asked to express “today’s date” using the format MM/DD/YY, and that’s the way it shows up in the document. Besides being the cheesiest way of expressing dates, it also allows for confusion, given that everyone outside the U.S. uses the format DD/MM/YY. It’s a small point, but it tells the user from the get-go that you’re dealing with a bargain-basement product.
The only scenario offered is that the parties are exploring a possible business opportunity. So if, for example, you want a contract to cover disclosure of information in the context of an ongoing business relationship, you’re out of luck. And the phrasing of the question asking you to describe the business opportunity is eccentric: “What is the item concerned in this agreement?”
When it comes to choosing the governing law, you’re asked “What state is this agreement in?” That’s an odd way to formulate that question. I’ll tell you what state this agreement is in—not good.
Similarly, when it comes to specifying what courts have jurisdiction, you’re asked, “What county is this agreement in?” Odd.
You’re asked to provide the name of your company’s representative, their title, the company’s street address, and the company’s city, state, and zip code. But only the representative’s name shows up in the output document, in the signature block, and without the company’s name, perhaps suggesting that the representative is signing in their own capacity and not on behalf of the company. As for the company’s address, it doesn’t appear in the output document.
For the counterparty, you’re not asked the name of company representative, so just the company’s name shows up in the signature block. In addition to being asked to provide the counterparty’s address, you’re asked to provide an email address. None of that information appears in the output document.
The inconsistencies in the signatory and contact information requested for the parties and the fact that some of that information isn’t used indicates that we’re dealing with a slapdash operation.
The Substance
I’m not about to spend the time it would take to assess all the deal choices reflected in the output document, so I’ll limit my comments to the definition of “Confidential Information.”
It’s defined as “information and physical material not generally known or available outside Discloser and information and physical material entrusted to Discloser in confidence by third parties.” But the contract then goes on to include its version of the standard exceptions. In other words, you have overlapping except-if-it’s-known carve-outs. That’s confusing. Compare that with what I use: “information (other than Excluded Information) relating to the Disclosing Party and its business that the Disclosing Party discloses to the Recipient during the Disclosure Period.”
The definition of “Confidential Information” includes more than six lines of examples, which is useless clutter. It’s also embarrassing: the list includes stuff that presumably isn’t relevant to people who use Avvo. My favorite is “mask works”; how many Avvo users are in the semiconductor industry?
Tacked on to the list of examples are conditions that have to be satisfied for information to be considered confidential. That suggests that the conditions apply just to the examples, which presumably wasn’t the intention. Of course, the examples are sufficiently comprehensive as to include pretty much everything, but the logic is nevertheless flawed.
The terminology used in defining “Confidential Information” is sloppy. The conditions mentioned above refer to information as “confidential or proprietary.” Why “proprietary”? And one of the exceptions to confidentiality refers to information that is “in the public domain”. As I point out in this 2010 post, that’s unduly narrow.
Based on my review of just this part of the contract, it appears that it was compiled by people with no specialized knowledge of confidentiality agreements.
The Usages
As for the language used in Avvo’s nondisclosure agreement, it’s a thicket of the usual semiliterate crap. I expect that the number of objectionable usages I find would average out to about one per line. I’m not inclined to start giving examples, because that wouldn’t begin to convey the overall futility.
But I can’t resist pointing out that although the defined terms “Discloser” and “Recipient” are defined without, and are mostly used without, the definite article the, you can find scattered instances of both defined terms used with the. That’s a sure sign of careless drafting and nonexistent quality control.
Layout and Typography
Since Avvo evidently didn’t pay any particular attention to the layout and typography of the output document, I won’t either.
Conclusion
I’m confident that the nondisclosure agreement I looked at is representative of Avvo Legal Forms. So I can say that Avvo follows LegalZoom, RocketLawyer, and others in foisting crap on their users. (Go here for my review of a LegalZoom confidentiality agreement; go here for my review of a Rocket Lawyer confidentiality agreement.) The fact that Avvo isn’t charging for its forms is no reason to cut them any slack.
That Avvo has the gall to announce this dreck with some fanfare isn’t simply a failure on Avvo’s part. It’s symptomatic of a broader failure, in terms of quality, of the consumer market for fill-in-the-blanks contracts. That failure has to be attributed to hack vendors: you can’t blame consumers for not holding out for quality that currently isn’t available.
And the quality failure of the consumer market is just part of the quality failure of contract drafting as a whole.
A few years ago I dipped my toe in the commoditized-contract-drafting waters by offering an online confidentiality-agreement template for sophisticated users. I started by charging a pittance, then I made it free, and finally I took it down. As a business proof-of-concept, it was a washout, but the questionnaire itself remains of great value to me. Who knows, maybe someday I’ll get back in this business with a suitable partner. Someone has to have standards.
I’ve made a fair amount of money over the years because of clients or opponents’ clients who used online forms that were just so, so bad. I am vehemently against their use and availability on “for pay” sites, although I recognize it’s too late to close the gates now.
The potential trap for the online consumer is that s/he doesn’t know what s/he doesn’t know or as you say, “you can’t blame consumers for not holding out for quality that currently isn’t available.”
First, for every form we lawyers use there’s an entire body of law behind it. So in a “noncompete” agreement the key variables are time; location; and activity limited. A lay-person taking ten minutes to fill out a form on the web has no clue about this and may over or under-reach, and the online company isn’t about to advise them.
Second, they give a false security that something has been done right, when in fact additional steps and/or documents are necessary. Got your online Bylaws for your online Delaware corporation registration? Guess what, you need to also register in the state of your principle place of business. You need Resolutions appointing officers and doing other housekeeping tasks. You need to take other steps to maintain the corporate shield. In short, the consumer gets the form but not the legal advice that actually protects them.
I’m litigating a case right now where the opponent’s client did just that – an Illinois business that registered as a Delaware LLC (why, I have no idea) but didn’t register to do business in Illinois where his business actually is. Guess whose client is now individually liable for pretty much everything.
Rant over.
Yes, I understand. But just to be clear, this post makes a narrower point: if you’re going to produce fill-in-the-blanks forms, they should meet minimum notions of quality. How to use such forms, or whether to use them at all, those are broader issues.
Ken, thanks for the feedback. While our forms are designed to cover a wide range of basic situations (and you can expect the functionality, quality, and number to improve rapidly over time), they’re not – or at least, shouldn’t be – comparable to a lawyer’s custom work product.
And that’s where your post misses the larger point: we believe that many consumers who are currently trying to go it alone would benefit from counseling with an experienced attorney. The purpose of our forms is to give those do-it-yourselfers a frictionless starting point, while also making it as easy as possible for them to step up to a paid legal check-up of what they’re doing (or full-on legal representation if they find their situation is more complex).
Josh King
Chief Legal Officer, Avvo
Josh: Welcome to the blog. But there’s nothing in my post that unfairly compares your product to work that a lawyer might produce. Instead, I considered your product on its own terms. For one thing, the lack of customization is a function of the technology you chose. But that was the least of my concerns.
And I’m not missing any broader point. Your goals are admirable, but your vehicle for achieving them fell well short.
Ken
I think, at the least, this particular stance shows a disconnect between the ideal of what websites like AVVO are trying to accomplish, and what the likely end result will be. I applaud your goals, but join in Mr. Adams in disagreeing with their implementation. Consumers, in their completely natural tendencies, gravitate towards lower cost options. They are not the kind of people that will read complex, books-worth of disclaimers to understand that the documents they are obtaining are not necessarily as good as what they would get from an attorney.
Consumers will naturally print online forms off thinking that the services they are receiving are just as good as the real thing, whether warranted or not. I think there is a real danger here from the standpoint of the consumer. It is one of the reasons we have ethics protections and such strong restrictions on unauthorized practice of law. End consumers do not know what they do not know.
Attorneys who are thick in the weeds of solo and small firm practice are aware of this mentality among consumers. Provided with the option of easily accessible legal documents, they will opt for those and forego the costly consultations of local attorneys.
That is where the true danger is. These types of documents are not wholly inadequate from a legal perspective. That is what Mr. Adams is getting at. They are, as you correctly put it, less than the best that you would receive from personalized legal guidance.
In reliance on documents similar to these, not necessarily these, there will be significant loss of equitable rights or real monies. People will create a simple Will, not knowing that their reliance on this document will result in a net-negative impact. These kinds of documents do not necessarily adequate protect for things like Medicare or Medicaid planning.
Another issue arises from Business Law perspective; namely that people tend to opt towards an LLC. There is a cultural zeitgeist amongst consumers of “LLC or bust”. Any business lawyer worth his salt will tell you that there is no such thing as a one size fits all incorporation strategy. With the advent of easily accessible online legal forms, incorporation has become a loss leader in the American Legal Market.
I think these kinds of qualms could come in any degree of practice areas. Yes, I agree with you Mr. King in that online forms do not rise to the level of quality of localized legal advice. That, alone, is a serious danger to a consumer base who will opt towards these services without fully understanding their implications on their unique cases.
I would advocate for a reformation of legal ethics to represent the real dangers that such forms may pose for the average, least sophisticated consumer.
Isn’t ‘feedback’ a term better avoided in reference to human communication? When people thank me for my ‘feedback’ (it doesn’t often happen, wonder why), I’m tempted to say, ‘And thanks for the kind output of your vocal apparatus’. Best of luck in your endeavours.
Ken:
“Proprietary” in confidentiality agreements is one of my favorite gripes. In negotiation, I explain that “proprietary” simply means “held as property,” and use the example of the other party’s public web site: “You own your web site as proprietary information because you have the copyright in it. You’re not suggesting that I can’t freely talk about what is on your public web site, are you?”
Chris
Invaluable writing – Apropos , people are requiring a VA 21-0845 , my husband encountered a sample version here
http://goo.gl/FTm8GQ