Contracts
are
the
backbone
of
commerce,
but
they
often
create
friction,
delay,
and
unnecessary
expense.
In
Season
10,
Episode
7
of
“Notes
to
My
(Legal)
Self,”
I
sat
down
with
Jake
Stein,
co-founder
and
CEO
of
Common
Paper,
to
explore
how
standard
contracts
can
transform
the
way
businesses
negotiate,
close
deals,
and
manage
obligations.
Jake’s
journey
from
tech
founder
to
legal
innovator
offers
valuable
insights
into
the
challenges
and
opportunities
of
standardization
in
the
legal
field.
Here’s
what
we
learned
about
why
standard
contracts
matter
and
how
they
can
reshape
the
way
we
do
business.
A
Technologist
Tackles
Legal
Complexity
Jake
Stein
isn’t
a
lawyer,
but
his
professional
life
has
been
shaped
by
legal
interactions.
As
a
co-founder
of
two
software
companies,
he
witnessed
firsthand
how
commercial
contracts
often
create
friction
between
businesses.
What
should
be
a
happy
moment
—
two
parties
agreeing
to
work
together
—
often
devolves
into
adversarial
back-and-forth
negotiations,
driven
by
competing
templates,
risk
allocation,
and
lengthy
redlining
processes.
“It’s
not
about
the
people,”
Jake
emphasized.
“It’s
about
the
system.”
The
current
system
of
bespoke
contracts
for
every
deal
is
opaque,
time-consuming,
and
expensive,
leaving
businesses
stuck
in
a
loop
of
inefficiency.
His
frustration
with
this
reality,
coupled
with
a
deep
respect
for
the
potential
of
standardization,
inspired
him
to
create
Common
Paper.
Why
Standardization?
The
concept
of
standard
contracts
isn’t
new.
Jake
points
to
examples
like
the
SAFE
(Simple
Agreement
for
Future
Equity)
for
startup
fundraising,
the
ISDA
Master
Agreement
for
financial
derivatives,
and
even
Pennsylvania’s
standard
residential
real
estate
contract.
These
standards
reduce
negotiation
time,
create
clarity,
and
foster
trust
between
parties.
Jake
sees
standard
contracts
as
the
“free
lunch”
of
legal
innovation.
They
benefit
both
parties
by
focusing
negotiation
on
key
variables
while
eliminating
wasteful
debates
over
standard
terms.
As
he
explained,
“Standards
help
everyone
help
each
other.
They’re
a
rising
tide
that
lifts
all
boats.”
When
Do
Standards
Work
Best?
While
not
every
contract
is
ripe
for
standardization,
certain
characteristics
make
it
a
perfect
fit:
-
High
Volume,
Similar
Terms.
Contracts
that
are
executed
frequently
and
involve
predictable
terms
—
like
NDAs
or
sales
agreements
—
are
ideal
for
standardization. -
Streamlined
Variables.
Agreements
with
a
few
key
negotiable
points
(like
pricing
or
liability
caps)
benefit
from
having
a
fixed
foundation. -
Complexity
Meets
Scalability.
In
industries
like
technology,
standards
often
simplify
highly
complex
processes
(e.g.,
APIs
or
email
protocols),
allowing
participants
to
focus
on
innovation
rather
than
mechanics.
Jake
noted
that
bespoke
contracts
will
always
have
a
place,
particularly
in
unique
or
high-stakes
transactions
like
M&A
deals.
But
for
repeatable,
predictable
agreements,
standards
are
a
game-changer.
Standards
Aren’t
The
End
Of
Negotiation
One
common
misconception
is
that
standard
contracts
eliminate
negotiation.
Jake
clarified
that
this
isn’t
the
case.
“Standardization
doesn’t
mean
no
negotiation
—
it
means
focusing
the
negotiation
on
what
matters
most,”
he
said.
For
instance,
Common
Paper’s
contracts
include
a
cover
page
where
parties
can
customize
key
variables
like
pricing,
payment
terms,
and
risk
allocation.
By
anchoring
the
negotiation
in
a
shared
framework,
parties
save
time
and
avoid
unnecessary
disputes
over
boilerplate
language.
Accelerating
Deals
And
Evolving
Legal
Work
One
of
the
biggest
benefits
of
standard
contracts
is
their
ability
to
shorten
deal
timelines.
The
more
widely
adopted
a
standard
becomes,
the
faster
parties
can
close
agreements,
especially
if
they’ve
seen
the
contract
before.
For
lawyers,
standards
change
the
nature
of
their
work.
Instead
of
spending
hours
redlining
documents,
lawyers
can
focus
on
higher-value
tasks
like
advising
on
business
risks,
developing
playbooks,
and
tailoring
agreements
to
their
clients’
specific
needs.
As
Jake
put
it,
“It
enables
lawyers
to
focus
on
what
matters
most.”
Challenges
To
Adoption
Building
and
adopting
standards
is
no
easy
feat.
Jake
highlighted
the
importance
of
critical
mass:
“A
standard
only
works
if
people
believe
it’s
a
standard.”
Industry
associations,
influential
players
like
Y
Combinator,
and
grassroots
efforts
all
play
a
role
in
driving
adoption.
Common
Paper
measures
its
success
by
tracking
the
number
of
agreements
signed
using
their
standards.
While
adoption
is
growing,
Jake
acknowledged
that
there’s
still
work
to
do
in
spreading
awareness
and
building
trust
in
the
framework.
What’s
The
One
Takeaway?
“Standards
are
magic,”
Jake
said
with
a
smile.
“They
make
life
easier
for
everyone
involved
—
helping
you,
your
customers,
and
your
counterparties
work
better
together.”
Whether
you’re
a
lawyer,
a
business
leader,
or
simply
someone
tired
of
inefficiency,
Jake’s
message
is
clear:
adopting
standard
contracts
can
transform
your
operations
and
improve
relationships.
For
more
on
how
standards
can
revolutionize
your
legal
and
business
practices,
watch
the
full
episode
of
“Notes
to
My
(Legal)
Self.”
P.S.
The
future
of
law
is
here.
Adopt
the
magic.
Olga
V.
Mack
is
a
Fellow
at
CodeX,
The
Stanford
Center
for
Legal
Informatics,
and
a
Generative
AI
Editor
at
law.MIT.
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.
She
authored Get
on
Board:
Earning
Your
Ticket
to
a
Corporate
Board
Seat, Fundamentals
of
Smart
Contract
Security,
and Blockchain
Value:
Transforming
Business
Models,
Society,
and
Communities. She
is
working
on
three
books:
Visual
IQ
for
Lawyers
(ABA
2024), The
Rise
of
Product
Lawyers:
An
Analytical
Framework
to
Systematically
Advise
Your
Clients
Throughout
the
Product
Lifecycle
(Globe
Law
and
Business
2024),
and
Legal
Operations
in
the
Age
of
AI
and
Data
(Globe
Law
and
Business
2024).
You
can
follow
Olga
on
LinkedIn
and
Twitter
@olgavmack.