More on the Value of Troubleshooting Your Contract Templates

In this post I mention that I troubleshoot company templates. I’ll now explain why that service that has value.

Contract-drafting is long and life is short, particularly if decisions regarding contract drafting are left to the individuals in an organization. You’re a fan of clear and modern contract language? That’s great, but you have some obstacles to overcome before you can use it in your contracts. Are you authorized to tinker with contract language? Are your colleagues on board? Are your clients on board? Is the other side on board? Do you have the necessary expertise? And even if you do, do you have time to do the retooling that’s required?

But the calculus changes when you look at contract drafting not from the perspective of the individual but from the perspective of the organization. If a company takes a centralized approach to contract drafting, it can tap into economies of scale. If you use a contract template a thousand times a year for valuable transactions, it would be worthwhile to devote resources to curating that template, to make sure it’s as clear, concise, and effective as possible.

To capture contract-drafting economies of scale, a company should do the following:

  • assess the quality of its contract templates by (1) comparing usages in the templates against a set of guidelines for clear and modern contract drafting and (2) determining whether the substance of the templates addresses the company’s needs effectively
  • determine the impact of any shortcomings in the templates and the benefit of revising the templates
  • assess whether the company’s processes, personnel, or customers present obstacles to revising the templates and decide how to handle those obstacles
  • determine who is best placed to revise the templates
  • decide how to go about revising the templates and whether deal volume, deal value, and the customization required would make it worthwhile automating the templates

That sounds straightforward enough, but the traditional approach to contract drafting still holds sway. In other words, at most companies contract drafting still consists of copy-and-pasting from contracts of questionable quality and relevance, relying on shaky conventional wisdom and doing without the benefit of a comprehensive set of guidelines.

If all you know is traditional contract drafting, it’s tough to change to a more modern approach. Heck, even if you decide that you want to redo templates, things can go awry in ways that I describe in this blog post.

But it’s telling that many companies I encounter aren’t interested in taking the first step—taking an honest look at your templates. That’s the service I provide by stress-testing templates.

If an organization isn’t interested in finding out exactly what’s in its templates, it won’t reap the economies of scale that are there for the taking. Instead, it’s falling at the first hurdle.

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.