Yes, Law Firms Do Have a Hard Time Maintaining Template Contracts

Recently, 3 Geeks and a Law Blog invited readers to suggest basic processes that law firms are really bad at. The responses they received are on display in this post, and two caught my eye:

Maintaining Practice Group Forms

One of the things that firms still struggle with is managing forms. It was something that has been discussed for years (decades?), but we still have problems assigning responsibility to maintain standard forms and best practices. The main issue revolves around getting the attorneys to review the forms from time to time. Even when a system is set up, it quickly gets out of date because of the lack of action on behalf of those that benefit the most by having a good forms database. So simple, yet still not happening.

Bad Document Management

Documentation is such a HUGE part of the practice of law yet so many firms still struggle with templates and forms. They start with “Should we even bother to use templates?” when meanwhile hours are being wasted with dupe and revise documents gone corrupt, or the user who *wants* to use styles but builds them piecemeal into each document, individually. Or the firm invests in a really nice template suite but no one uses it. These documents are the bread and butter, the work product, the piece de resistance if you will; yet so many firms (eh hem, decision making attorneys) put next to no effort into knowing how to create, edit and manage them.

These responses will come as a surprise to no one: the landscape is littered with the rusting hulks of law-firm template initiatives. Below I consider why that is, and whether that might change.

Today

Here are five reasons why many (most?) law-firm template-contract initiatives die aborning.

Poor Economies of Scale

Compared with companies, which tend to have a limited number of templates that they use repeatedly, law firms tend to draft a broad range of contracts. Furthermore, what they will be called on to draft at any given time is unpredictable—it depends on what business walks in the door. So unless you’re a law firm that can count on drafting a certain kind of contract many times—unless, for example, you’re Wilson Sonsini doing Series A preferred stock offerings—it can be hard to justify the investment required to implement and maintain a template initiative.

The Billable Hour as Disincentive (One)

As long as a law firm bills by the hour, the efficiency offered by a rigorous template initiative would seem to work to the law firm’s disadvantage.

The Billable Hour as Disincentive (Two)

As long as lawyer performance is measured primarily by how many hours they bill, lawyers will be reluctant to sacrifice hours for the greater good by working on a template initiative.

A Dearth of Expertise

Compiling a template that ostensibly contains optimal substance expressed in optimal language is very different from tweaking and recycling precedent contracts of questionable quality and relevance. Doing deals doesn’t by itself qualify you to compile templates.

Balkanization

It’s commonplace for law-firm partners to be most comfortable sticking with the way they do things. As a result, it’s routine for an associate to be asked to use one precedent contract to do a particular deal for a partner and to be asked to use a different precedent contract to do the same kind of deal for another partner. That attitude isn’t conducive to the centralized approach required for a successful template initiative.

Tomorrow

Enhancing the prospects of law-firm template initiatives would require that something change with respect to one or more of the above factors. I suggest that the most likely agent of change is use of document-assembly software to draft contracts. (I use ContractExpress.)

More specifically, document assembly could prompt law firms to reconsider the notion of the billable hour as an obstacle to efficiency. For one thing, law firms might realize that since, invariably, they don’t collect on every hour of time billed on contract drafting, using document assembly to draft contracts more quickly would allow law firms to reduce the amount of time they write off. Furthermore, for busy law firms, using document assembly to draft contracts offers an opportunity for premium billing while still saving the client money.

And more generally, the notion of profiting off of inefficiency is unseemly, and perhaps untenable in the long run.

But the greatest scope for change would come from rethinking the role of economies of scale. It makes no sense to have law firm after law firm implementing and attempting to maintain templates for standard kinds of contracts. The substance of such contracts and the language used to articulate that substance should be commodities: there is no secret sauce. It would make sense to outsource the task of implementing and maintaining document-assembly templates. In other words, it would make sense for law firms to get out of the template business.

That reality is increasingly being acknowledged, but so far what has been offered by bar associations and by the major legal publishers is inadequate. Of course, Koncision Contract Automation‘s confidentiality-agreement template offers a glimpse of what document assembly can do, but Koncision won’t be adding any content until someone expresses an interest in financing further work. It might be that the best hope for progress is trade associations. Watch this space.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.