(Image via Getty)
“I was a foot soldier in Biglaw when I thought to myself, why don’t I look more closely at how contract language works or doesn’t work, rather than just cranking out deals.” That’s how Ken Adams explains his dedicating over 20 years of his life to studying and sharing how best to draft contracts.
He says, “I found that that type of work was better suited to how my brain works. It’s a longer-term inquiry, compared with the expediency-driven task of getting the deal done. It involves relentlessly grinding away at issues related to how to say clearly and concisely whatever you want to say.” He wryly admits that there’s something a bit maniacal about it. “I suspect it’s driven by some deep-rooted need for order and a functioning civic society. And I’m the only person doing what I do. It’s been amazing having the field essentially to myself.”
I took Ken’s day-long “Drafting Clearer Contracts” seminar about 10 years ago, soon after I had switched from being a law-firm litigator to working in-house. Back then, he gave me a framework for understanding contracts and introduced me to their limited and stylized language. And in the process, he completely changed my practice. So I was eager to catch up with him again now, especially as so much activity in legal tech relates to contracts.
Taking Control of Contract Language
Ken says, “I always believed that my study of contract language wasn’t an end unto itself. It was a means to an end.” He continues, “If we’re going to create an efficient process, we’re going to need guidelines for coherent contract language.” We must know how to express a deal clearly and effectively. And then, and only then, we can automate, according to Ken. “If you automate without rigorous content, you’re doomed to garbage-in-garbage-out.”
Ken says that to produce reliable contract language, you have to realize that it’s analogous to software code — it’s limited and stylized. “It’s all well and good to say ‘be clear’ and ‘use short sentences,’ but that requires command of countless words and phrases. That’s what I’ve been working on.” That work is reflected in Ken’s 600-page book, A Manual of Style for Contract Drafting, now in its fourth edition.
The Culprits: Copy-and-Pasting and the Legalistic Mindset
Ken is still incredulous at the dysfunction of traditional contract drafting. “It’s a system that has smart people endlessly recycling profoundly defective prose. That’s the case regardless of how prestigious the law firm or how exalted the company.”
Why are things so bad? According to Ken, it’s a combination of two things. “First, contract drafting has long relied on copying, on faith, from precedent contracts of questionable quality and relevance. When you have generation after generation copy-and-pasting, the result is a disconnect between what’s in the contract and what people think is in the contract.”
Another factor is what Ken calls “the legalistic mindset.” He explains, “It’s a function of thinking that your work product should showcase legal intricacy.” According to Ken, the result is contracts clogged with terminology that gets in the way of expressing the deal. “That is why a phrase like ‘represents and warrants’ is a fixture in contracts, even though it’s absurdly pointless and confusing. In their urge to make things complicated, lawyers have managed to make contracts incomprehensible.”
Automating Contract Creation: Hard Work Worth Doing
Ken thinks that the obvious starting point for automating contracts is contract creation, but you have to understand the nature of the task. He explains, “Automating contract drafting isn’t glamorous — the technology involved is relatively basic. The work is primarily a matter of the research and editing involved in building a library of automated contracts.”
Eight years ago, he tested what could be done by creating an automated confidentiality agreement that allows you to create what Ken describes as “the confidentiality agreement of your dreams” by answering an annotated questionnaire. Ken says, “You might end up answering eighty questions before you’re done, but you get a great NDA that fits your needs and is clear and as concise as possible.”
“That’s how we should be drafting contracts, rather than randomly copy-and-pasting from who knows what and relying on conventional wisdom,” Ken asserts. It seems a straightforward enough proposition, but so far nothing on the market comes close to meeting Ken’s standards. “The challenge isn’t the technology or creating the content, it’s finding a constituency willing to dedicate to the task the resources required.” That’s something Ken’s still working on.
AI Must be Powered by Expert Humans
Ken is also involved in tackling the process of contract review. Ken says, “Reviewing contracts is likely more of a burden than drafting. If you draft the contracts for, say, 10 different deals of a certain kind, each time it’s just a matter of your making suitable adjustments to your template. But if the counterparties are responsible for preparing the documents, you would be faced with reviewing 10 different and unfamiliar drafts.”
Ken is an advisor to LegalSifter, an artificial-intelligence company that helps you review draft contracts. It flags whether a set of deal points are present or absent, and for each deal point it offers help text prepared by LegalSifter’s experts, your law firm, or your in-house counsel, whichever option best suits your needs. But Ken is eager to point out that despite the buzz surrounding artificial intelligence, at the core of LegalSifter is old-fashioned expertise, with the technology serving to make that expertise more accessible.
Ken described to me how LegalSifter’s process works. “For example, recently I worked on contracts used to book a meeting at a hotel. By looking at countless hotel agreements and reading relevant commentary, I identified those deal points worth looking for. For each of those deal points, I created a set of specifications showing how that issue might be expressed in a contract. Those specifications were handed off to the data scientists and natural-language-processing people, who test our specs and train each piece of software, or ‘sifter.’ So the product combines expertise and technology. It’s not some king of tech sleight-of-hand.”
Ken is wary of legal-tech companies that treat legal expertise as if it were a commodity, to be cranked out behind the scenes by a fungible and anonymous squad of lawyers. He says, “Relying on the expertise of others involves a leap of faith. If you don’t know where the expertise in artificial intelligence is coming from, then you can’t trust it. LegalSifter has made a point of telling the world that I’m helping them and what my role is. I hope that make it easier for people to rely on LegalSifter.”
Focusing on the Bigger Task
Ken has no illusions that replacing the current dysfunction will be easy, or that success is guaranteed. “But it depends on what you consider success. Regarding my guidelines on contract language, I’ve not been frustrated by the slow pace of progress. I’m happy knowing that many people around the world find my work useful. And regarding efforts to make the contracts process more effective, it’s a massive market, so you can be viable even if you start small.
More generally, Ken is gratified to be applying himself to a task he first conceived of long ago. “My aim has always been to help overhaul the contracts process, but first I had to take a 20-year break to make sense out of contract language. That work is now largely done, and I’m delighted that I’m now able to build on that foundation by helping to develop products that will make a real difference in how a vital business function operates.”
Stay tuned; Ken would like to think he’s just getting started.
Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. Olga founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. Olga also co-founded SunLaw, an organization dedicated to preparing women in-house attorneys to become general counsels and legal leaders, and WISE to help female law firm partners become rainmakers. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can email Olga at olga@olgamack.com or follow her on Twitter @olgavmack.