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.
5 thoughts on “Retrieving and Using Contracts Filed with the SEC”
Actually, I forgot to mention another source for contract research in my post: http://www.cori.missouri.edu/wps/index.htm
With respect to your post, I guess I interpreted “leveraging previously successful work” and “starting with a foundation of proven work product” differently. When I look at Edgar agreements, I know they have been successful in the sense that some law firm was able to sell that particular work product to a client. Doesn’t say much, I know. I would never assume that it is perfect, without legal issues or the right agreement for my client. But it is helpful to have a comparison and see what has been drafted by other professionals.
In my experience, small business clients often have a hard time understanding why it can be expensive and time consuming to draft agreements for them. So my post was meant to impress on them that you can copy and paste as much free contract samples as you want, it still takes a lot of experience and oversight to draft an agreement that is right for them and their situation.
Finally, Westlaw and Lexis are just prohibitively expensive for solo practitioners like myself and I am glad to have found one more source for relatively low cost sample agreements.
Thanks for the link and happy Holidays!
I appreciate the description of resources for accessing contracts from SEC filings. As the Director of the Contracting and Organizations Research Institute (CORI), mentioned in the follow-up post, I would like to add and clarify a point or two.
First, while most contracts in EDGAR are filed under Exhibit 10, not all contracts are filed so. It depends on the type of contract or other organizational documentation in which one is interested. It also depends on the filing type. There are 10 different SEC filing forms that contain “Material Contracts”. Exhibit 10 is not a universal exhibit number for material contracts in half of these filing forms. CORI uses a combination of statutory guidelines and text-based heuristics to download all contracts filed in EDGAR, regardless of filing form or exhibit number.
Second, the CORI K-Base provides access to contracts from sources other than EDGAR. Most of these are from regulated industries or contracts involving public entities. Thus the CORI K-Base has a broader scope of material than is available in EDGAR.
Third, the link to CORI provided in the follow-up post points to our research page. The homepage is http:/cori.missouri.edu. From there, one can learn about the CORI K-Base or click on User Login to move to the collection. Registration is currently free.
Finally, CORI is able to offer small and medium law firms customized archiving and access of their own contract products, allowing convenient, secured storage and access, and the ability to search over the firm’s own filings and the larger collection simultaneously. If someone is interested in such a service, they can contact me directly from our website.
Michael Sykuta, PhD
Practice Technologies, Inc. has evidently come up with an offering closely related to RealPractice Public Access, namely RealDealDocs. It has been advertised through law.com, but I haven’t bothered checking it out. Ken