Andrew Stokes is CEO of The Law Machine, “a contracting platform that makes contract content modular so lawyers can automate contracts visually through a drag and drop UI.” I enjoy Andrew’s posts.
I noticed his two most recent posts. In this one, he gripes about the notion of “market” contract terms:
If ever again a $1000/hour lawyer dares tell me a clause is “market”, I’ll spontaneously combust and take them with me.
I mean, seriously?
There is no such thing as a market standard deal, nor are there any market standard parties doing market standard stuff.
And in this one, he says that empathy would help contract drafters serve their clients better:
I often think lawyers draft more for ourselves than for the users of our contracts. I see a lot of overconfidence in our understanding of our clients and their needs. I think we lack empathy.
I’m not saying we’re cold and heartless people. Just that we don’t ask the right questions. That we’re overlooking crucial details.
Contracts aren’t for lawyers. We just write them. They’re FOR the users of the contracts.
But we lawyers get possessive…
For empathy you need to understand, and to understand you need to ask.
Andrew goes on to describe a relatively broad inquiry geared to creating a new template, but a more limited version would be suitable for creating contracts for a given deal.
Two thoughts come to mind.
First, I suggest that “empathy” isn’t quite the right word. It’s a little touchy-feely, in that empathy is generally understood as relating to understanding and sharing the feelings of others. Instead, Andrew is simply expressing that you want a deal to be tailored to the client’s needs. In effect, Andrew’s two posts address the same challenge from two perspectives: his “empathy” post is about how to meet that challenge, and his “market” post is about one sign that you’re flunking it. So instead of referring to empathy, it might be simpler to refer to addressing your client’s needs.
Second, addressing your client’s needs is made much harder if you’re doing the copy-and-paste thing. Your starting point is a contract used for some other deal, or it’s a one-size-fits-all template, with a few footnoted or bracketed variations if you’re lucky. Adjusting that starting point requires improvising. When you improvise, there’s a good chance you’ll end up wide of the mark, for these reasons:
- Copy-and-pasting puts you in a passive mindset—passivity isn’t conducive to responding nimbly to circumstances.
- It’s unlikely any starting point is annotated to explain the choices it reflects, so it’s likely that figuring out how your starting point should be adjusted will be a challenge.
- It’s likely that what’s being copy-and-pasted is the sludge that is traditional contract language, meaning that it’s dysfunctional in both what it says and how it says it.
Finding yourself in this circumstance can leave you floundering and looking for some sort of reference point. That’s why deal lawyers are so prone to invoking “market” terms.
The sort of inquiry Andrew recommends would be valuable, even essential. But we would also benefit from an antidote to the copy-and-paste machine.
Understanding the client’s needs is essential for a lawyer advising on contracts. This doesn’t mean you have to follow their stated desires precisely – some may say they want a one-pager, but they or their bosses may actually want something more protective of the organisation’s interests. Interpreting those needs is important too. But understanding is the starting point.
Some big-law firms seem to have their own standard product. I wonder how closely the lawyers listen and act on the client liaison person’s preferences in an M&A deal
Yes, clients might be entirely unaware of their needs until you inform them what their needs are!
Ken:
I agree with what you said. In addition, I’d note that understanding the client’s use of the signed contract is also important — and can be made easier by good drafting. A contract covering a brief transaction that will only be read for product, price, and delivery (or in court) is different from a relationship agreement that will be modified many times. There are plenty of boilerplate provisions that should differ in those two scenarios.
Chris
“ It’s unlikely any starting point is annotated to explain the choices it reflects.” This needs to be screamed from the mountaintops. Negotiating with someone defending a point in a template for no other reason than it was there (or some clearly concocted after-the-fact rationale) is one of the more frustrating aspects of transactional practice.
Andrew makes reasonable points overall, but there are certainly contract clauses that represent “market” terms and generally no amount of effort will move the needle on those provisions, unless the client has enough negotiation leverage to move the needle. So I suppose there’s “market” for most and then there’s “my deal has enough zeroes in it that I will get acceptable bend on this if it’s important enough to me.”