Contract managers who want to take greater control of contracts need a good command of contract language and substance.
Contract managers who want to take greater control of contracts need a good command of contract language and substance. The first step? Become an informed consumer of contract language, so you understand how to say clearly and concisely whatever you want to say. Next, consider using automated contract review to check, or supplement, your command of contract substance.
I’m an interested observer of commentary on the world of contract management. If you gave truth serum to the contract-management hive mind, here’s what I suspect it might say: Lawyers are to blame for much that’s wrong with contracts! They have a lock on contracts, and to maintain that control they’ve made contracts obscure, filling them with secret language only lawyers have access to. That leaves us with sideshows like–gah!–cartoon contracts. Curse you, lawyers!
It’s time for contract management to get out of its defensive crouch. As I explain in this article, contract managers are in a position to wrest from lawyers some control over what contracts say and how they say it–how much control is partly up to them. In particular, contract managers can benefit from two recent developments–first, a set of comprehensive guidelines for clear contract language, and second, automated review of contracts.
Who Can Do the Work?
Contracts are associated with lawyers. But business contracts pertain to business dealings. A relatively small part of business contracts relates directly to the law–the legal framework for the transaction and how disputes are handled.[1]
So although lawyers are routinely involved, to a greater or lesser extent, in setting the terms of a deal, it’s standard for businesspeople to handle most or all of that task. And it’s not the case that only lawyers are equipped to handle the law part of contracts: not being a lawyer doesn’t preclude you from being familiar with how the law works and being responsible for how the law applies to your affairs.
By contrast, if you get to decide how to say what you want to say in a contract, it’s likely you’re a lawyer. But seeing as it’s routine for people other than lawyers to be responsible for setting deal terms, it would be odd to preclude nonlawyers from handling how best to express those deal terms.
So in theory, nothing prevents contract managers and other nonlawyers from being more involved in both aspects of working with contracts. That’s desirable, as it would make a deeper pool of talent available to the contracts community.
And contract managers would offer better value–with lawyers, you’re paying for a credential that generally has no bearing on work with contracts. After all, in working with contracts I’ve applied hardly anything I learned in law school. I suspect that’s the case for most of us lawyers.
Becoming an Informed Consumer of Contract Language
But for contract managers to take greater control of contracts, they would need a good command of contract language and contract substance. In that regard, they probably have work to do–being in thrall to lawyers might have contributed to a sense of learned helplessness on the part of the contract-management community.
The first step in this process would be to become an informed consumer of contract language, so you understand how to say clearly and concisely whatever you want to say. That’s an essential step: because contract language is limited and stylized, and because a lot is at stake, confusion can lurk in unexpected places. If you approach the task thinking that the only requirement is that you be a halfway decent writer, things will not work out well.[2]
Becoming an informed consumer of contract language is made more challenging by the state of the traditional prose of contracts. It’s a mess–generally, the prose of business contracts is bloated, archaic, and filled with redundancy, bollixed verb structures, misbegotten conventional wisdom, and various kinds of confusion. This dysfunction causes companies to waste much time and money, and it routinely results in wasteful disputes. And don’t think that traditional contract language is a special code that only lawyers are privy to; instead, lawyers are among the bamboozled.
So you can’t become an informed consumer of contract language by copying the current dysfunction. What’s required is a new paradigm, and one is available, in the form of my book A Manual of Style for Contract Drafting (MSCD), published by the American Bar Association and now in its fourth edition.[3] It contains detailed analysis of the building blocks of contract language. Offering examples of that analysis is beyond the scope of this article, but to get a sense of the cumulative effect of following MSCD’s guidelines, see my annotated “before” version and “after” version of extracts of a standard-form contract, one broadly representative of mainstream drafting–the Salesforce master subscription agreement.[4]
I’ve been working on my guidelines for over 20 years, and I’ve benefited from questions, comments, and tips from many readers and seminar participants. As a result, MSCD is comprehensive, thorough, and reliable–in its review of the fourth edition, the Law Society Gazette (published by the Law Society of England and Wales) said it was “extraordinary.”[5] It’s the only resource of its kind. And it and other of my works have been cited by courts.[6]
So the path to becoming an informed consumer of contract language runs through MSCD. That can be achieved by anyone, whatever their function, who is willing to spend quality time with MSCD, but to move farther along the learning curve, faster, there’s my online course Drafting Clearer Contracts: Masterclass.[7]
Help with Reviewing Contracts
But being an informed consumer of contract language is only a preliminary step. You still have to determine what to say in contracts–how to express the deal. That involves a mountain of detail, and accessing that detail is challenging. Traditionally, it has required relying on precedent or model contracts of questionable quality and relevance; consulting commentary of varying quality; and getting from colleagues advice that to some extent likely reflects misbegotten conventional wisdom.
The nature of the challenge depends on whether your task is reviewing or drafting. Reviewing a contract–the other side’s draft, or perhaps your side’s–involves checking that it reflects your understanding of the deal and that it’s clear. Given the complexity of contracts and the workload of many of those who work with contracts, reviewing contracts can be challenging. (For an example of what such review might uncover, see my version of the Salesforce master subscription agreement annotated from the perspective of someone preparing for an internal discussion before approaching Salesforce.)[8] But nowadays anyone reviewing contracts can have the benefit of some help.
One form of help comes from legal services providers that specialize in handling a company’s high-volume, low-value transactions. But a different kind of help is attracting attention these days, namely use of artificial intelligence for reviewing contracts. It offers contract managers someone to look over their shoulder when they’re reviewing draft contracts.
The idea is that one can train technology to look for patterns in data. Patterns of that sort are present in contracts, given that contract language is limited and stylized and given that contracting has long relied on copy-and-pasting. So technology should allow us to spot issues much faster and more consistently than a human reader could.
This has proved sufficiently attractive that many companies are competing in this space. Some specialize in extracting data from a corpus of contracts. That’s a generally a simpler and more limited task than helping with review of contracts before they’re signed, which requires knowing what issues you’re looking for, knowing how they might be expressed, and knowing what advice to offer users. Given the complexity of transactions and the dysfunction of traditional contracts, those tasks aren’t easy–they call on deal experience and a deep understanding of contract language. In other words, reviewing contracts before they’re signed isn’t amenable to a technology-only solution–you also need expertise.
One company developing artificial intelligence to review contracts before they’re signed is LegalSifter. They’ve demonstrated their commitment to expertise by hiring me as their chief content officer. Before signing up for this kind of service, ask about their expertise. If someone isn’t willing to be open about the sources of their expertise, it might not amount to much.
Help with Drafting Contracts?
Regrettably, contract managers and everyone else who works with contracts lack a key resource–a way to create quickly and cost-effectively contracts that are clear and address your needs. Instead, the choices remain copy-and-pasting or going through the protracted process of drafting by committee, with nonspecialists haggling over how best to express a transaction. Either way, the results are likely to be underwhelming.
It would be straightforward to develop and maintain a comprehensive library of automated contract templates. Users would create a customized contract by completing an annotated questionnaire. The language would comply with MSCD’s guidelines, and the substance would be prepared with the help of subject-matter experts. No satisfactory library of templates is currently available, perhaps because the work involved requires old-fashioned expertise facilitated by unglamorous document-assembly technology.
Such a library would perform an essential function in providing a source of quality contract language and substance. Without that, we’ll always be cleaning up messes.
An Opportunity
But even without such a resource, contract managers can gain more control over contracts–by becoming informed consumers of contract language and by using automated contract review to check, or supplement, their command of contract substance. I hope they take advantage of that opportunity.
About the Author
Ken Adams focuses on the language of contracts–not what you say in a contract, but how to say it clearly and concisely. According to the Canadian periodical The Lawyers Weekly, “In the world of contract drafting, Ken Adams is the guru.” He’s author of A Manual of Style for Contract Drafting, and he gives Drafting Clearer Contracts presentations internationally. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to help with reviewing contracts.
Find out more about my forth-coming course here.
END NOTES
[1]. See Kenneth A. Adams, What Part of the Contracts Process, If Any, Requires a Lawyer?, Adams on Contract Drafting (8 Sep. 2011).
[2]. See Kenneth A. Adams, Optimal Contract Language Requires More Than Enthusiasm: My Critique of Shawn Burton’s Article in the Harvard Business Review, Adams on Contract Drafting (23 Dec. 2017).
[3]. For more information about MSCD, go here.
[4]. For the “before” and “after” versions of extracts of the Salesforce master subscription agreement, go here.
[5]. Go here for a copy of the Law Society Gazette’s review.
[6]. See, e.g., Kenneth A. Adams, A Humdinger of an Opinion from the Delaware Chancery Court: AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, Adams on Contract Drafting (4 Dec. 2020).
[7]. For information about this course, go to https://courses.adamsdrafting.com/.
[8]. For the annotated version of the Salesforce master subscription agreement, go here.
Content reflects views and opinions of the author and do not necessarily reflect the views and opinions of World Commerce & Contracting.