Locking a Draft Contract

Longtime reader Jim Brashear, now general counsel of Zix Corporation, shared with me a series of exchanges he engaged in regarding locking, and unlocking, Word draft of contracts; I’ve copied them below.

This isn’t an issue I have any experience with, as I no longer do deals, but the idea of locking Word documents strikes me as beyond pointless: It can be easily circumvented. It’s vaguely insulting. Document-comparison software provides greater protection and is more discreet. (For more about document comparison, see this July 2010 blog post.) And the idea of your average law firm or law department locking their documents to protect their copyright is, on several levels, outlandish.

Here’s Jim’s initial salvo, a post to a discussion forum of the Association of Corporate Counsel:

I find it annoying and not very collaborative when opposing counsel tries to lock a Word document with a password in order to limit or track changes. (Same with sending PDF documents to discourage changes.)  As a public service I therefore present:

How To Unlock and Edit a Password Protected Word Document

This works with Word documents that have been password protected to track or prevent edits. It does not unlock Word documents that have a password that prevents opening the file.

  • Open with Microsoft Office Word the password protected DOC or DOCX document
  • In Word’s File menu, select “Save As” and save the document as an HTM formatted file, noting the saved file location
  • Close the document in Word
  • Find the saved HTM document file and right click the icon
  • Select “Open With” and choose Wordpad
  • In Wordpad, search for the text string <w:DocumentProtection
  • Highlight and delete the entire line that begins with <w:DocumentProtection and the line directly underneath it that begins with <w:UnprotectPassword.  Make no other changes.
  • In Wordpad’s File menu, “Save” the HTM file and exit Wordpad
  • RIGHT click the HTM file icon and again select “Open With” but this time choose Microsoft Office Word
  • The document is now unprotected, you can edit at will (with or without tracked changes)
  • In Word’s File menu, select “Save As” and save the document with the .DOC or .DOCX format

Another friend of the blog, David Munn, general counsel of Pramata Corporation, chimed in:

There’s an even easier way to crack a “protected” Word document.

  • Save the document to your hard drive or other location
  • Open a new blank document in Word
  • In Word 2007, in the Insert menu, select Object and the Select From File. (In Word 2003 I believe it’s simply Insert File from the Insert menu)
  • Navigate to the original file and select it. The text of the original document will be inserted into your new document. The document is now unprotected, you can edit at will (with or without tracked changes).

The other lesson from this is that you should never rely on the “protection” in Office if you really need to protect a document.

Jim subsequently received an email from another general counsel:

Rather than make this a public debate, where I run the risk of apparently if not intentionally chastising you in front of our peers, who dismayingly seem, in large part, to agree with you, I find the efforts to subvert the locked document to be less than professional.

If the sender wants to ensure that no one edits the text, those wishes should be respected, if not as a basic matter of copyright law, than as a matter of professional courtesy.  How else can one protect oneself from our unscrupulous brethren who may make changes in a document that runs on for a hundred pages without identifying those edits, whether on purpose or unintentionally?

This kind of “trick” is exactly why laypeople hold us in such disrepute.

Jim responded directly to this email, but it also prompted him to post this follow-up comment on the ACC forum:

My post under this title prompted some interesting discussion about the state of etiquette in modern contract drafting. It seems we lack clear guidelines on aspects of appropriate behavior when sharing electronic copies of draft contracts.

There is a consensus that it is unprofessional to send a reply draft that is marked to show less than all of the changes from the prior draft – even when that inaccuracy is inadvertent (e.g., due to internal versioning problems). There is a perception that it is appropriate behavior for the commenter to provide an accurate, electronic redline draft. There is some debate about the appropriateness of sending an electronic copy that is password-protected so that opposing counsel is “forced” to show all changes.

Earlier posts have already demonstrated that password protecting Word documents is easily defeated and ineffective. Some commenters (publicly or privately) have criticized removing password protection as poor behavior. Other commenters opined that it is poor behavior to apply password protection in the first place.  This post examines those opposing viewpoints.

Attorneys in most, if not all, U.S. jurisdictions have an ethical obligation to ensure that their client’s confidential information is not disclosed to opposing counsel within metadata contained in Word documents. That hidden metadata can contain (depending on software versions and settings) internal versions of the same file, embedded comments, details of proposed changes, identities of persons who reviewed the document and more types of confidential information.

Microsoft provides online guidance about how to redact hidden metadata in Office documents, specific to each version of Office. See this linked white paper from Payne Consulting (which offers consulting services and metadata redaction software) for more information about what kind of information can be found in hidden metadata, and lawyers’ ethical obligations to redact metadata. http://www.payneconsulting.com/pub_books/white_papers/pdf/PayneJuly2006ArticleonMetadata.pdf

To my knowledge, metadata cannot be redacted from a password-protected Word document. That means reviewing counsel who use a password-protected Word document to send their client’s comments to opposing counsel must either (i) disclose whatever metadata is captured in the locked document and risk legal malpractice, or (ii) enter into the locked document only the final changes that the client wants to transmit to opposing counsel.

Many companies would, in their normal process of commenting on a draft agreement, route the electronic copy through various departments, with each inserting proposed changes, questions and embedded comments. The metadata in the resulting agreement can then be expunged, and a redline created by comparing the original to the “cleansed” final version. If the company cannot redact metadata from a locked document, then counsel would need to start from the original version of the locked draft and input into that version only the final changes that the client wants to transmit to opposing counsel. That seems inefficient.

The principal explanation I’ve heard for password protecting Word documents is that the originating counsel lacks confidence that opposing counsel will accurately track changes. There are ways to solve that perceived problem without locking the Word document with a password. Ronald Reagan often quoted the Russian proverb “trust but verify” and that is a good way to treat opposing counsel in contract drafting.

It is easy to use Word or commercially-available document comparison software (e.g., Workshare’s Worksite f/k/a DeltaView) to compare the reply draft from opposing counsel to your own last transmitted draft. Doing your own comparison does not create for opposing counsel the dilemma of either turning over their client’s confidential metadata or slowing down the drafting process. There are also opinions indicating that counsel who rely on opposing counsel’s redlined drafts may be committing legal malpractice and that they should instead do their own document comparison and complete read-through.

Another explanation I’ve heard for password protecting Word documents is that the originating counsel perceives they own the drafting process or the document, some even asserting a copyright.

Attempting to control the drafting process by controlling the electronic drafts was in vogue when I started in big firm practice in the early 1980s but has largely disappeared as electronic documents are now easily shared via email or portals. Contract drafts are now largely a professional collaboration. Many contracts even contain a provision stating that the contract is the product of joint drafting and therefore should not be interpreted against either party as the principal drafter.

Although it is theoretically possible for copyright to exist in a contract, the concept does not apply to the vast majority of contracts because they are not sufficiently creative or original. See Ken Adams’s discussion of contract copyright in this article. https://www.adamsdrafting.com/downloads/Copyright-NYLJ-8.23.06.pdf

Some have noted that reviewing counsel who receive a locked document can simply call the authoring counsel and request an unlocked version.  If the authoring counsel is willing to provide an unlocked version on request, then why make reviewing counsel ask for it? Some counsel or contract administrators send fax versions of documents, presumably to discourage comments. One can call and ask them for an electronic copy, too. As we are trying to define drafting etiquette, however, the question is, Why not send an unlocked electronic copy in the first place?

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.

11 thoughts on “Locking a Draft Contract”

  1. I like to include a redlining rep in the general provisions: Each party represents that it or its counsel has `redlined’ or otherwise called attention to all changes that it made and sent to the other party in previously-sent drafts of this Agree-ment, including but not limited to drafts of any attachments, schedules, exhibits, addenda, etc.

  2. Ken, my take on this issue is that I am, indeed, vaguely insulted if I am sent a document that I can't edit (whether it be password protected or a pdf or fax). It sends a message that I am either not to be trusted or, in some cases, that changes are not expected. However, that vague insult is nothing compared with the deep mistrust caused by partial red-lining or undeclared changes. I may be uncertain whether the undeclared changes arose from lack of ethics or incompetence (eg changes made by several individuals, some of whom don't know how to use track changes) but either way deep mistrust is the consequence.

    Having read this thread and earlier ones on your excellent website, I now understand why some attorneys protect their documents as a defensive rather than an offensive strategy, and I may be less likely to take offence when presented with a protected document. But I still think the strategy is misguided. It sends a signal that the "other side" doesn't trust me, and it is pretty much pointless, because I will mark up the changes anyway on a version that I create. if the other side won't send me a clean version to mark up and, in the case of a protected Word document, if I can't work out how to unprotect it (despite the helpful suggestions above – I hope your blog will still be running when I have to call on those suggestions, perhaps in several years time), I will scan it into my computer before marking up the changes. I will also be pissed off that I had to do this.

    Trust but verify is a much better approach, in my view. In other words, provide and receive the documents in an editable form, but run a document comparison or proofread them.

    The building of trust in contract negotiations is an important subject that deserves more focus in the legal community than I have seen. No doubt there are management texts on the subject. I have been in negotiations where the meal we took with the other side the night before, and the opportunity it gave to get to know the other players outside the negotiation room, was immensely useful in smoothing out difficulties in the negotiations. But it only works if both parties are prepared to "give" a little of themselves, rather than act as poker players at all times.

    • On the subject of trust, it's interesting how many negotiators don't seem to realize that trust isn't a light switch you can flip on and off — it's a step-by-step incremental process. (This is a variation on "reality isn't a snapshot, it's a movie.") Small early wins in that area can have compound-interest benefits, and vice versa.

  3. I am most pleasantly surprised by Mark's remarks on trust and confidence. Indeed, for instance if you negotiate with a Japanese party on the other side (or any person that comes from a culture where consensus or 'the word of a man' (or woman) or a 'four eyes principle' are deeply rooted), it would even be inevitable to have dinner together both before and after negotiations days. I have seen more (and became willing to agree to more) during such dinners than I did see or agreed to during those daytimes.

  4. To me, receiving a locked document is not a trust issue, but a practical one. It is highly inefficient to review locked documents, because once you move on to a new change, you cannot go back. For example, you delete a paragraph, and then decide later to add it back. The only way to do that would be to re-type the entire paragraph, making it look like an addition, which it was not. This eats up my time, my client's time, and the other party's time, and does not advance the deal to closure. Unless you are sending out a "click-wrap"-style contract (and there, you send out a PDF, not a locked word document), there is little good reason to ever use the "lock" feature for track changes.

    I also find that after a few drafts back and forth, it is time to start "accepting changes" on things to which everyone agrees. Otherwise the document begins to look like one of my old college papers: a sea of red ink. I always tell the other lawyer what I am doing, and generally will run a compare using word of any draft they they give me against what I last sent them. "Trust, but verify," I think someone said earlier.

  5. For those still using prior versions of Word, ALT-SHIFT-F11 will bring up the script editor. Just search for "protect" and delete the tags that say protection and password and save. It's a very quick solution. I've thought about the DMCA issues before. generally, I don't think most contracts are copyrightable. However, any argument would be form over function since the document protection because the "circumvention" techniques described are easily avoided by simply saving the output type (a feature of word) that doesn't offer protection. There have been a few cases to say that using an authorized output of otherwise encrypted data is not circumvention.

    That said, locking documents in any situation other than a no-negotiation situation is not a good way to start. Worse yet, anyone relying on a locked document for purposes of protecting changes is foolish. As has been shown, turning track changes/locking on and off is a trivial task, well-documented on the internet. And while lawyers have a reputation at stake, business folks do not always think in those terms.

    As a thought, if someone is serious about not permitting changes to a contract then perhaps you could address it in the contract itself. Add a contract provision that says that the contract is not negotiable, the terms of original draft prepared by [Client's name] are the only terms accepted by Client, and any conflict between the executed copy and the original draft will be resolved in favor of the language of the original draft. Sort of like a translations clause. You could then check to see if that was removed and, if not, presto have reserved an argument that any changes are void. That too seems a bit foolish, but I'm sure someone's tried it before.

  6. A word of advice, do not trust the counterpart that locks a document. You should always compare-merge and re-read the final draft. During the final stages of negotiation with a locked draft a crafty was added by the other party (a period was moved) but not marked in one draft. This may have been a mistake of trying to accept changes and accidentally accepting a new change, as the counterpart claimed, but after that point the negotiation changed. What I took away from that experience is to be even more alert for unseemly behavior from the document lockers.

  7. Ken – I know, and will use only as a last resort, some of the unlocking trickery discussed here. I particularly do a large number of vendor-client deals (e.g., manufacturing, distribution) and at that level it really is a matter of trust – how can we enter into a busines realtionship if one side does not trust the other from the outset? My solution is straightforward – I send the other side an email (taking care to copy their businesspersons and my business colleagues) explaining that we regard the practice of locking as non-collegial and not conducive to a healthy professional relationship, that we do not work with "locked" or "disabled" documents, and in order to move our potential realtionship forward we require a fully editable MS Word document. 9 out of 10 times I am in receipt of an editable draft in a matter of hours. For the 1 in 10 that resist there are (usually) other fish in the sea, and I seek my colleagues' input before moving to teminate negotiations. If my business dudes and dudettes insist that we must move engage, I then will unlock and begin working on the document. Honestly, the whole situation is best avoided at the outset – you "doc lockers" out there, take note.

  8. I have worked on countless contracts, and almost all have been password protected to allow for redlining only. I would never seek to surreptitiously unlock a contract sent to me to redline by the other paty, and I would expect the same courtesy to be extended to me.

    Although, as my esteemed colleagues have mentioned, that it's at least partially a matter of trust (i.e., if you cannot trust the other party not to be straightforward in contract negotiations then why do business?), I also feel that password protecting contracts while permitting redlining provides an added level of security to ensure that nothing inadvertantly gets removed.

  9. I negotiated multi-billion dollar acquisition transactions, complex outsourcing and strategic alliance agreements worth hundreds of millions, and scores of other documents without password protection or document locking. If you can trust your opposing counsel in those situations, why the hell can't you trust someone reviewing a contract worth 1/100th (or 1/1000th) the size and materiality?

    Locking is impractical, creates delay and in no small way is an affront to your opposite. It says many things. It says you don't trust them. It says you are too lazy to spend the 20 seconds it takes to run your own redline of the opponent's newest draft versus your last draft (something I always, always do, and always, always have done). It says no changes are permitted (a position that you will ultimately back off of, so why create the hassle).

    I would feel absolutely no regret in unlocking a document I received in order to make comments or changes, although i will normally ask first unless my counterpart has been practicularly prickly to that point.


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