A few months ago someone at a public company mentioned to me that her department was about to embark on a redraft of their templates. I was familiar with the subject matter, so I knew that the templates must be complex.
I recently checked in with her to see how the process was going. In her reply, she mentioned in passing that due to cost controls they were handling the process internally. That wasn’t really why I had contacted her—honest!—but it brought to mind the following:
I understand that these are drastically cost-conscious times for law departments. But when it comes to templates, it’s possible to be penny-wise, pound-foolish.
A company’s lifeblood is its sales, so the contracts used in the sales process are vitally important. If they contain any glitches, are bloated with redundant and archaic language, or are structured in a confusing way, those deficiencies will manifest themselves every time a template is used, and they’ll act as a constant drag on the process.
If you’re a substantial public company and you’ve decided to redraft your templates, it would make sense for you to retain an expert to help out. Your lawyers know your business better than anyone, but face it—they aren’t specialists in contract language. At best, they’ll produce contracts that are representative of mainstream contract drafting; in other words, they’ll be a long way from optimal.
Furthermore, your lawyers probably already have too much on their plate, so it’s uncertain that they’ll be able to devote sufficient time to any redrafting project.
So using the services of an outside expert could help you prepare, much more quickly than you could otherwise, a set of state-of-the-art templates that would yield dividends, in terms of reduced time-to-sale and reduced risk, every time they’re used. And the cost involved would be minimal—trivial even, when compared with the amounts at stake in the sales process.
Perhaps your problem isn’t being too tight with the pursestrings, but rather directing money to the wrong place. Law firms are great at getting the deal done, with all the expediency that entails, but I’m not sure it’s realistic to expect them to produce state-of-the-art drafting. At best, you’ll get mainstream contract drafting. And it might well be expensive.
Obviously, I’m not saying this as a disinterested bystander—I redraft contracts for clients, and I honestly can’t think of anyone else I’d trust with that task. But how you handle redrafting is an imporant enough issue that I’m willing to offer my thoughts on the subject, even at the risk of seeming self-serving.
2 thoughts on “Investing in Your Templates”
“Your lawyers know your business better than anyone, but face it—they aren’t experts in contract drafting. At best, they’ll produce contracts that are representative of mainstream contract drafting; in other words, they’ll be a long way from optimal.”
Your blog is a marketing vehicle so self-serving is fine, but above quote is, in my opinion and experience, as concieted as it is plain wrong. Many of the best contract drafters I know are internal lawyers. While many external expert lawyers technically maybe be above average contract drafters, they lack business knowledge which tend to result in horrible results, which must be subjected to extensive internal rework.
Martin: I don’t think conceit has anything to do with it.
Every contract that comes across my desk could do with help ranging from a good scrubbing to a complete rewrite. I’m in a position to notice that because the language of contracts is my livelihood; I don’t have to worry about doing any of the things an in-house lawyer has to worry about. Saying that in-house lawyers aren’t experts in contract drafting is rather like observing they’re not experts in particle physics: I don’t think it would be reasonable to expect otherwise.
But I wouldn’t want terminology to get in the way of my point. Maybe “specialist” would be less loaded a term than “expert.”
And in any event, the distinction I’m offering has nothing to do with understanding substantive law, a company’s business, or transaction mechanics.
In an attempt to reflect the above points, I’ve revised my post to say “they aren’t specialists in contract language.”
And “self-serving” means “serving one’s own interests often in disregard of the truth or the interests of others.” So to the extent that it’s a pejorative term, I don’t think there’s anything self-serving about my post. I’m just the messenger; shooting me wouldn’t make the world of contract drafting any less messy.
I agree that making an outsider entirely responsible for a company’s contract drafting would likely be a disaster. When I redraft a company’s templates, I work very closely with the in-house lawyers so I become intimately familiar with their business and the issues involved.
Finally, this blog isn’t a business-development tool, at least not directly. Instead, it’s a means for me to explore issues and to get feedback. But I don’t think it’s a bad thing to remind readers occasionally that in addition to putting online, in regular doses, what I hope are interesting posts, I also need to earn my keep.