A Report on the Penn Law 2007 Contract-Redrafting Project

Each semester that I teach, I inflict a series of drafting assignments on students in my Penn Law contract drafting class. This semester, the final assignment—the grand climax!—consisted of redrafting the first five pages of a master services agreement submitted to me by a major financial-services company in response to this invitation I posted on this blog. The company—let’s call it Acme—uses this contract as the template for its company-wide services procurement.

Our Redraft

I asked my students to redraft this extract according to the principles we’d discussed during the course of the semester. I redrafted it too, and after I had reviewed the students’ versions, I gave them mine to critique. I then compiled our final version and sent it to my contact, an Acme lawyer. And last Monday my class and I had a conference call with my contact at Acme and three of her colleagues.

I had selected Acme’s contract because out of those that had been submitted, it was in the best shape. Indeed, my contact at Acme told me that it had been regularly reviewed by Acme’s in-house lawyers. Nevertheless, it was entirely a product of mainstream contract drafting. As a result, there was plenty of room for improvement. And we certainly did a number on it:

First, I annotated our five-page extract of the original to indicate its shortcomings. Those annotations occupied over 200 footnotes, not to mention many cross-references to those footnotes (a technique I used so as to avoid repeating footnotes).

And because redrafting invariably allows you to purge a contract of all sorts of redundant verbiage, our redraft used 71% of the number of words used in the original to convey the same substance. Moreover, what remained was, to my mind, vastly clearer. Although it hardly captures the extent of the improvements, I’ll note that the Flesch Reading Ease score of the redraft was 33.9, as compared to 25.7 for the original. (See this post for my thoughts on readability scores on contract drafting.)

The Implications

All told, the changes were sufficiently extensive that as an overall assessment, the phrase “Holy shit!” came to mind.

Acme uses this contract as a template over a thousand times a year. As a general matter, shortening any high-volume template by 30% and making what’s left twice as easy to read would have a substantial effect on transaction efficiency. And if you’re able to combine such language efficiencies with document automation, the consequences would be dramatic—you’d speed up the contract process, save significant amounts of money, and reduce your contract-related risk. (This is particularly the case in a sales context, as the stakes are higher and the documents tend to exhibit more predictable permutations.)

The Response

So how did Acme’s lawyers respond to our redraft? First of all, they were good sports—not everyone would welcome such scrutiny. And they were understandably pleased to have received the input of that most precious of commodities, a fresh pair of eyes (or in this case, twenty-one pairs of eyes).

As regards our changes, Acme’s lawyers discussed with us those they agreed with, those they questioned, and those they wanted to understand better. It goes without saying that they expressed no interest in adopting wholesale the changes we recommended. Our redrafting project was, after all, an academic exercise rather than something initiated by Acme.

A Taste of My Own Medicine

From my perspective, one of the most interesting parts of the redrafting project was my students’ comments on my draft. Pretty much every student was able to point out a problem that no one else had spotted. Some of the comments related to my failure to follow my own rules. (For example, I lapsed into using may not rather than shall not for language of prohibition; see MSCD 3.71.) Other comments related to more subtle issues that I had cheerfully missed.

This put me in mind of two fundamental survival tips. First, whenever you do a complex bit of drafting, plan to set it aside for a few days. When you come back to it, you’ll likely find plenty that you’ll want to fix. And second, try to get someone suitably anal to review your draft. Of course, you won’t have access to twenty Penn Law students …

Who’s Next?

I won’t be teaching again until the fall 2008 semester. Next spring I’ll be holding another beauty contest to pick a contract for the 2008 redrafting project, but feel free to get in touch with me before then.

And get in touch with me too if you’d like my thoughts on how I might be able to improve your contracts.

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.