Archive: July, 2009

What’s your greatest weakness in contract drafting?

Sinning, we know, is human. And we all know what Capital Vices are. But no one before has applied the 7 Deadly Sins to contract drafting, and explained how common errors in writing legal agreements can lead to “eternal contractual damnation”.

Jamie Wodetzki, Founder of Exari, did. Led by his experience in document automation – just like Dante was led by Virgil – Jamie starts a fascinating trip to investigate the 7 Cardinal Sins with a focus on contract drafting. He walks us through the most common mistakes that lawyers and professionals make when writing contracts and legal documents, and explores the solutions provided by intelligent document assembly to cut costs and eliminate risk.

Originally presented as a Technology Session at Legal Tech 2009, this interesting and timely presentation is now available in seven free 2-minute clips on the Exari website, and includes stories from the front line of legal service automation at leading companies and law firms around the world.

Here is Jamie’s list of don’ts:

  • LustDon’t lust after sexy documents and be obsessed by beautiful fonts.
  • GluttonyDon’t draft fat, excessively long contracts.
  • GreedDon’t write take-it-or-leave-it, one-sided standard form contracts.
  • SlothDon’t make mistakes due to inaccurate, lazy drafting.
  • WrathDon’t be caught with the wrong clauses and get aggressive.
  • EnvyDon’t fail to focus on details, as well as the big things.
  • PrideDon’t find yourself guilty of excessive love for your own drafting.

The 7 Deadly Sins of Contract Drafting teaches us that a little bit of sinning is acceptable, but in a global financial crisis the cost of sinning blows up and smart companies must be able to avoid such common mistakes and have complete visibility into their contracts.

Check it out and tell us: what is your sin?

This post was guest authored by Federica Ionta

3 signs you should automate your contracts

If you manage a corporate legal department, there are three telltale signs that you might get significant value from automating the creation of your day-to-day business contracts.

  • Internal clients “work around” Legal
    If contracting is being done by people in the business without Legal’s knowledge, the company is being exposed to unacceptable risks. Why do they feel the need to circumvent Legal? What can be done to remove the incentive?
  • All transactions must go via Legal
    Another problem is if Legal is drafting and reviewing routine agreements. It’s an awful waste of highly skilled legal resources. Lawyers find the work tedious (cutting-and-pasting from a variety of templates and previous agreements, fixing broken auto-numbering, etc). Not to mention the frustration for internal clients caused by slow turnaround times. Why are routine documents being drafted by Legal? Is it because you don’t trust the business? Do they not trust themselves?
  • Work is being outsourced to law firms
    When Legal’s too busy, it uses panel lawyers as an overflow. While this helps with the workload, it’s an extremely expensive way of scaling. Is this really the most cost-effective way to provide legal services for your company?

How automation can help

Automation makes it easy for your internal clients to follow approved processes. As a result, they’re happy to comply. They’re presented with an intuitive web-wizard containing business-friendly interview questions.

Standard transactions – after answering the questions, clients get auto-generated, execution ready documents (in PDF format) tailored to their requirements. Instant access to legally pre-approved documents allows them to quickly “get on with business.”

Non-standard transactions – by the same token, higher risk or more complex deals are automatically flagged and routed to Legal for review (in Word format).

The best thing is that you’re now able to track all the company’s agreements, and gain deep visibility into the types of transactions being entered into by the business. It also frees the legal team up to focus on value-added work. Which means that less stuff needs to be sent out to expensive external lawyers.

Automating contract drafting enables you to cut costs and reduce risk, while also being more responsive to your internal clients. Happy internal clients; happy legal team; happy finance department. A win-win-win.

Drafting contracts with style(s)

My post on drafting contracts to be understood mentions the importance of typography (the layout and appearance of printed material) for clear communication. In a recent post, lawyer Sam Glover reinforces the point with five typography tips for lawyers. But it’s Sam’s sixth tip, a non-typographical one, that I’m most interested in.

Learn styles – Manual formatting is clumsy, requires more effort, and yields inconsistent results. Learn to use styles, so that all your headings are formatted consistently, and so that you can change them all, if necessary, by changing only the style definition.

Lawyers spend a great deal of time editing and tweaking documents. And styling has a huge impact on how quickly a document’s layout can be updated. So, if you’re a lawyer, you owe it to yourself and your clients to invest some time in understanding how to use styles.

Fine, but where do I start?

As well as the Microsoft tutorial mentioned in Sam’s post, I highly recommend Shauna Kelly’s MS Word tutorials. (Anyone who’s been hit with Word numbering mishaps will be particularly interested in Shauna’s excellent outline numbering tutorial.)

Exari’s customer, staff and business philosophies

Company culture is heavily influenced by the views of its leaders, particularly the people who’ve been around since ‘Day 1′. Exari co-founder and Chief Technology Officer, Dr Justin Lipton, is one such person.

Juz recently started blogging over at CIO. So, I’ve decided to review some of his posts to provide insight into aspects of Exari’s approach to doing business.

Tim Cummins on what’s holding back contract lifecycle automation

Predicting the future is a mug’s game.

In 2002 Gartner predicted that, by 2007, there would be a $20 billion market for Contract Lifecycle Management software and services.

Tim Cummins – CEO of the International Association for Contract & Commercial Management (IACCM) – has written a post suggesting why market growth hasn’t met those expectations.

His reasons?

  • Difficulty in fixing cross-functional processes; because contracting cuts across Legal, Finance, Sales
  • Procurement and Operations there is often a lack of executive sponsorship to fix the end-to-end business process
  • Resistance by internal IT (who are forever being promised the ‘imminent’ arrival of a Contract Management module by their ERP provider)
  • Under-appreciation by companies of the impact of the contracting processes on financial performance, company reputation, and risk management

So, how much is contracting really costing you?

How to cure the numbering headache in Word documents

If you work with legal documents, you’ve probably had to contend with MS Word’s outline numbering. In which case you may have also suffered the pain of your numbering spontaneously going haywire.

Sound familiar? Then read on.

There are 3 ways to avoid spontaneous outline numbering corruption.

1. The Typewriter approach
Best for single-page documents being drafted by Baby Boomers.
(Examples: none that I can think of.)

2. The Shauna Kelly approach
Best for long bespoke documents.
(Examples: books, journal articles, instruction manuals.)

3. The Automated approach
Best for rule-driven, semi-standard contracts and other complex documents.
(Examples: proposals; services agreements; renewal letters; employment packages.)

So, the next time you’re about to start bashing away on the keyboard, make sure your outline numbering’s up to the task.