Retrieving and Using Contracts Filed with the SEC

From Imke Ratschko’s useful New York Small Business Law blog I learned about an article in Legal Technology entitled Looking Outside the Firm for On-Point Work Product. It’s by Justin Hectus, Director of Information at Keesal, Young & Logan, a 75-lawyer California law firm.

In this article, the author discusses the value of retrieving, and using as forms, contracts that have been filed on the U.S. Securities and Exchange Commission’s EDGAR system. He goes on to describe a service called RealPractice Public Access, which is offered by Practice Technologies, Inc. This service retrieves all contracts filed with the SEC, abstracts select information, and allows users to search the contracts by means of a combination of pull-down menus and keyword searching.

On reading this article, the following thoughts came to mind:

Let’s Not Get Carried Away

First, the author is altogether enchanted by the notion of recycling contracts retrieved from the EDGAR system. He describes it as “an amazing concept” that “may sound like a fantasy.” “Imagine the possibilities!,” he says. To my mind, it’s hardly a fantasy—humdrum everyday reality is more like it. I suspect many other corporate lawyers feel the same way.

Putting Things in Context

Second, I think the author oversells RealPractice Public Access, in that he doesn’t put it in context.

He says, “While there are other tools for searching EDGAR, they are better suited for searching filings” rather than just filed contracts. I imagine that Lexis and Westlaw would beg to differ—they both allow for word searching of “Exhibit 10” filings. (All material contracts have to be filed under Exhibit 10.)

A perk available to law-school adjunct faculty members is free searching on Lexis and Westlaw, so by now I’m reasonably adept at finding what I need on EDGAR. To search the Exhibit 10 filings on Lexis, I click on “Securities” under “Area of Law – By Topic,” then “Filings,” then “SEC Exhibits,” then “Exhibit 10. Material Contracts.” I use only Lexis, because unlike Westlaw it allows me to do “allcaps” searches. If for example I were looking for a trademark license agreement, the primary component of my Lexis search would be allcaps(“trademark license agreement”). It would pick up all-capitals references to “trademark license agreement,” and it’s likely that such references would for the most part consist of agreement titles.

So I doubt that I’d use RealPractice Public Access even if it were free. But my circumstances are hardly representative—if you have to pay for your Westlaw and Lexis searches, you might want to consider whether RealPractice Public Access, with its more modest pricing and its presorting of information, makes sense for you. But you should bear in mind that it has direct competitors: Global Securities Information’s Precedent Authority database seems to offer the same sort of capability. And you might want to consider what free sites have to offer. For example, findlaw.com offers contracts retrieved from EDGAR and organized by industry, by type, and by company name, and onecle.com (mentioned by Imke) offers them organized by type of agreement.

EDGAR Is No Guarantee of Quality

Third, the author suggests that whereas some might frown on recycling contracts found on EDGAR on the grounds that it reduces legal services to a commodity, such copying is in fact far superior to trying to reinvent the wheel each time you need to draft an agreement.

But I’m not sure who these detractors are. They seem something of a straw man—I’ve never heard it suggested that drafting contracts from scratch as a matter of course is the sign of a vibrant legal profession.

I’d be hesitant to recommend wholesale copying from EDGAR, but my qualms have nothing to do with fears about legal services becoming a commodity. (When it comes to contract drafting, I’m all for commoditization!) Instead, it has everything to do with the fact that you can find all sorts of unspeakable crud on EDGAR.

In that regard, I note that with respect to using contracts found on EDGAR, the author refers to “leveraging previously successful work” and “starting with a foundation of proven work product.” So if something shows up on EDGAR, that makes it successful and proven? I think not.

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.