In this April 2010 post on AdamsDrafting I explained why I thought the notion of an crowdsourced initiative to create contract templates wouldn’t be viable. But seeing as this idea has recently been discussed in this post on Bill Carlton’s Counselor@Law blog and in the comments to this post on Brian Rogers’s theContractsGuy blog, I thought there might be some point to revisiting it.
To create such crowdsourced contracts, you could use various collaboration tools, such as wikis or Google Groups. Either anyone could be free to participate, or you’d restrict participation to an narrower group. Most likely the end product would be in the form of annotated Word documents. (Given the volunteer nature of the process, it’s unlikely that anyone would pay for the right to use document-assembly software.)
This approach might work OK for Wikipedia, but contracts are much more demanding. Here are the problems I see:
- If anyone could contribute, you’d have insurmountable quality-control issues.
- Even if participation was limited to “heavy hitters” (to use Brian Rogers’s phrase), you’d still have major quality control issues, as even lawyers from “elite” law firms produce contracts that are depressingly dysfunctional. Consider, for example, the model confidentiality agreement I sampled for purposes of this recent post.
- The only way to ensure quality would be to have strong editorial control, but even if you could find someone suitably qualified, who on earth would want to take on such a major task for nothing more than a pat on the back?
- Using a Word document as the vehicle for a template would greatly limit the scope for customization and would require inefficient copy-and-paste revisions.
I first wrote about this notion in 2007, in a New York Law Journal article (go here for a PDF copy). Since then, I’ve seen no sign of anyone attempting an crowdsourced contracts initiative, although I’ve encountered organizations that have wistfully mentioned the possibility to me. You can’t attribute that inaction to lack of technology. Instead, I think it’s a clear indication that the idea isn’t feasible.
And continued blogosphere interest in this notion can’t be taken as an indication that it’s viable. Instead, I think that enthusiasm for creative disruption through technology is such that people are inclined to see it as a cure-all, whatever the context, and try to push it into areas where it doesn’t belong.
What’s required instead is a cold-blooded cost-benefit analysis. If, for example, you’re pining for an crowdsourced confidentiality agreement, you might want to consider that for a pittance, you could use, right now Koncision’s confidentiality-agreement template, safe in the knowledge that it’s more reliable, as a matter of credentials, content, and process, than anything else out there.
[Updated noon May 9: In the original version of this post I referred to “open source” contracts but attempted to make it clear that I was referring to broad collaborative initiatives. Prompted by Random John’s comment, I revised this post so as to use instead the term “crowdsourcing.”
If “open source” refers solely to distribution rather than production, I have no inherent objection to the notion of an open-source initiative. It all depends who prepares the templates and according to what guidelines. In this recent post, I suggested just such an initiative for purposes of M&A contracts.
And read narrowly, the label “open source” is ultimately of limited value: I’m not sure there there’s much point in distinguishing between templates prepared by an appointed group and made freely available (the NVCA model documents) and templates prepared by an appointed group and offered for sale (the ABA Section of Business Law model contracts).
Finally, I hope I’ve made it clear that I’m a fan of collaboration. This post is one of many examples of how reader comments allow me to fine-tune proposed contract language. But for collaboration to be truly effective, you need strong editorial control.]
@Ken. Open-source contracts have already happened. The Federal Acquisition Service at the General Services Administration has used a wiki to gather requirements for multiple contracts. The current ones are at
https://betterbuy.fas.gsa.gov/index.php/Main_Page
.
Sterling: I’ll check it out. There are plenty of ecosystems that I’m unaware of. Ken
Fair enough Ken. There’s also another piece that is now showing the expansion of BetterBuy to the rest of the fed government. (Although, yes, this is crowdsourcing). http://fcw.com/articles/2011/05/04/gsa-preparing-prerfp-collaborative-platform-for-government-and-industry-official-says.aspx
Random: I attempted to make it clear in the original version of this post that I was, in effect, referring to crowdsourcing. Thank you for prompting me to clarify my terminology.
I’m aware of the initiatives you point to; I’ve written about a couple of them. None has any bearing on the point I’m trying to make in this post; instead, they raise issues of their own. For example, see this post regarding the NVCA model documents.
Ken
Ken, I really mean open sourcing, not crowd sourcing. The place to start (I think) is to simply “out” the template banks that every law firm keeps. 2007 was the dark ages, in web terms; it will not be possible to keep templates off the web much longer. And business lawyers shouldn’t try. (Prediction: the most successful won’t.) The profession should embrace transparency and move on to charging clients for counseling, negotiating, customizing. Not for unveiling the boilerplate.
The next step is to then use software to determine what is standard, and what the standard variants are. And to rank the variants by frequency. This is an empirical matter and is crowd sourced only in a metaphorical sense. Unwitting, or unintended, crowdsourcing, you might say.
Where we fundamentally disagree, I think, is in the need for editorial control anywhere other than in the hands of the individual attorney or the given firm. I don’t see a strong case for reforming contract drafting style.
Bill: Obviously I agree that recreating verbiage to reflect the terms of a deal isn’t a good use of lawyer time and client money. But beyond that, a few thoughts come to mind:
First, for many kinds of contracts, we already have access to plenty of precedent. The SEC’s EDGAR system is a vast repository of the stuff.
Second, the idea of empirical ranking of contract provisions sounds fabulous in the abstract but can be very problematic. I tried doing it for purposes of Koncision’s confidentiality-agreement template, but I found that given the breadth and variety of the available precedent contracts, the resulting analysis was essentially unusable.
Third, how would you present your empirical analysis? In raw form? You’d be leaving the drafter a lot of work to do.
Fourth, I’m taken aback by your final point, that you don’t see a strong case for reforming contract drafting style. I’ve demonstrated, over and over again, that in terms of what contracts say and how they say it, much of mainstream contract drafting is deeply problematic. The extract that I discussed in this recent post is representative. If you think it’s adequate, we live on different planets.
Fifth, if you agree that contract language is a commodity, I don’t know why you don’t take that to its logical conclusion—that it would make life easier if everyone used the same language to articulate a given deal term. That’s the logic behind, for example, the NVCA documents. Why force every drafter to be an editor, a task they’re manifestly not qualified for? Using document assembly represents just one step beyond the NVCA approach. Anyone who rules it out because it isn’t free hasn’t done a full analysis of the costs of the traditional approach.
Ken