These are my notes on today's webinar,
developed by ILTA KM Peer Group steering committee member Mary Panetta. The
all-star panel provided a coherent and thoughtful look at the challenges of
corporate drafting and some innovative new tools that improve corporate
drafting, which only recently have begun to be used in law firms.
Formal
Description:
Drafting is one of the core activities
of a corporate lawyer. For years, the standard approach to drafting has been
largely manual: gather sample documents, read them side-by-side to determine
their similarities and differences, copy useful provisions, and then edit the
draft agreement to make it appear as if it was drafted by a single writer. Now,
however, there are several technologies that can help expedite and even
automate key parts of the drafting process. During this session, attendees will
hear an overview of the corporate drafting process, various drafting challenges
and the tools that can assist with these challenges. In particular, we will
look at two relatively new tools, Exemplify and KMStandards (formerly KIIAC),
both of which promise to make the drafting process easier and better. Finally,
we will introduce an approach to developing a business case for obtaining
drafting tools.
Speakers:
· John Gillies, Director of Practice
Support Cassels, Brock & Blackwell LLP (and author of a five-part series
on enterprise search on the ILTA KM Blog).
· Meredith L. Williams, Chief
Knowledge Officer at Baker Donelson
Why focus on corporate drafting?
Abraham: Corporate drafting takes a lot of time. It applies to business transaction practices,
as well as real estate. The extensive
time taken to draft has a real impact on turnaround time and can harm knowledge
sharing within a practice. Firms want to
constantly improve the quality of their drafting. Practitioners can minimize risk by bringing a
more disciplined approach to corporate drafting.
What is the range of corporate drafting?
Abraham: A vast range of documents and agreements are
produced by corporate lawyers. Kinds of
documents such as opinions, memoranda, agreements, and organizational
documents, are only high-level categories of documents. Each kind will require an organized approach
to drafting.
Gillies:
One logical structure for corporate drafting is to look first at the
type of document (agreement / memo / opinion); the type of agreement
(employment agreement / partnership agreement / purchase agreement); and the
category within an agreement type (e.g., an employment agreement for a senior
executive / manager).
The process and issues for drafting a
particular type of agreement can also be structured in logical form from
highest / broadest categories to the particular and minute issues. In the press
of time we too often accept the structure of a good sample. Clients are better
served by assessing and developing an optimal logical structure for articles
and clauses. Language for each clause needs to be developed, ideally the
"most conforming" language. Each clause also needs to be assessed for
completeness and functionality. Final editing passes for substantive and copy
editing also need to be done.
Williams:
Technologists implanting corporate drafting
technology should sit down with corporate practitioners to understand their
drafting processes. Three key functional areas for a corporate drafting
attorney are 1) Research and precedent selection, 2) Drafting &
Customization and 3) Review.
Evaluate tools by how they fit into
these three functions. Tools may fit in
multiple areas.
New
Tool: Exemplify
Williams: Exemplify
[Ed. -- which I reviewed here in September 2012] is a web-based tool.
Exemplify has been rolled out at Baker Donelson to all of its attorneys.
You start by pasting text into the tool. The tool compares your language against
public EDGAR documents. It shows you additions and variations from your text. One
really valuable feature is the ability to drill down into language specifically
drafted by a specific law firm.
Strengths
& Weaknesses
Exemplify can help you review specific
language, but will likely not help you develop your own knowledge management
standards or products.
One benefit is that it is not hosted. No
IT resources are required. Attorney training has been very limited, less than
10 minutes. Junior associates and senior shareholders alike have taken to it in
certain practice areas that can leverage EDGAR documents.
Exemplify is a startup, a new company,
another potential weakness.
New
Tool: KM Standards
Gillies: KM
Standards (formerly kiiac) works with a specific set of documents that a
law firm submits rather than a vast set of publicly filed documents. If you
"feed" it 65 documents, it will generate a standard set of clauses
and lets you compare a given document to that set. It graphically indicates the
degree of agreement between your (or opposing counsel's) draft and the
standard. For instance a "legal
remedies" clause might be completely novel or different, indicated by a
small red bar next to that clause. KM Standards also indicates clauses that
*don't* appear in your agreement but that appear in most other agreements of
that type.
KM Standards can be used to develop a
checklist of essential elements of an agreement. Checklist development normally
is a process of polling a certain set of lawyers. Lawyers tend to remember and
flag specific issues that arose during various deals. One module shows the
frequency of occurence of various clauses.
Strengths
& Weaknesses
It can be used to generate contract
standards or model agreements much more quickly than was possible before. KM
Standards can compare many more agreements and clauses than lawyers can handle
individually. The benchmarking and checklist creation modules are very
helpful.
KM Standards is also web based. KM
Standards can be, however, hosted on a firm's servers. It has a much more
complicated user interface than Exemplify (for instance).
KM Standards has comparable risk
reduction benefits to Exemplify. The tool has continuously been improved
for the two years that Mr. Gillies has been using it. The "base documents" can be
exported to Word but it does not generate properly formatted drafts.
Each template is a standalone document;
KM Standards does not generate a clause bank or library.
Abraham: Exemplify and KM Standards do different
things. There is some overlap but they
do very different things.
What is the business case for the new tools?
Williams: Build out the exact business problem. Clients
are asking for more efficiency and want their lawyers to produce commoditized
or semi-commoditized documents faster. Define the problem in terms of specific
requirements rather than generally "we need help drafting."
Feature requirements desired might
include drafting time reduction, partner review time reduction, increase
negotiation leverage, minimal cost, low attorney training, and updated
content.
Show scenario planning for getting tool
1, tool 2, or no tool.
Make a business case by how it will
affect attorneys day-to-day. Break down
a "day in the life." Identify
how the functions they are performing today will change with the new tool. For instance, how would benchmarking
provisions against a market standard change?
Attorneys will cringe simply on being presented with a new tool. Sell it
to them with respect to particular tasks with which the tool can help.
Comparing
The Tools
Where Exemplify "comes with"
the EDGAR collection, KM Standards requires private collection, or also can
leverage documents collected from EDGAR.
Mr. Gillies mentioned that one issue
with a private collection using KM Standards is the possibility of ethical
walls or confidentiality agreements limiting which attorneys at the firm might
be able to access certain agreements.
Exemplify does not keep or cache the
language that you paste in to the tool.
KM Standards is provided sample agreements and you need to rely on an
NDA.
Where Exemplify targets individual
clauses, KM Standards starts by analyzing whole documents. KM Standards does a little more and is
correspondingly more complex.
Williams: Exemplify "is a benchmarking tool"
primarily. Its key function is to aid analysis and drafting of specific
clauses. It can also reduce risks of
repetitive document drafting, at low cost and resource demands.
Exemplify requires minimal KM team
support. KM Standards will typically
require some KM support, depending on which features you intend to use.
Gillies: KM Standards allows one to quickly identify
the "most standard" model for starting a draft. The more detailed analysis is required, the
more KM support may be required.
The key value proposition was improving
the KM team's ability to generate precedents.
Abraham: Highlights Ken Adams's blog Adams on Contract Drafting and two
Cassels Brock resources on drafting
tips and style
guides. Gillies highlights
Butterick's Typography
for Lawyers book as a means to improve drafting for clients not just other
lawyers.
How
can you measure the purported improvements in efficiency, risk management, and
quality?
The panel kindly took my question, posed
through the webinar Q&A.
Gillies: He's reviewed readability (Word tests) on KM
Standard-produced documents, and has found that readability scores tend to be
quite a bit higher.
Abraham: You could develop risk reduction assessment by visualizing the degree of variance initially within a firm's document collection "before" standards implementation and "after."
Williams:
They will compare time entries for time taken
to draft certain matters for drafting at six months in.
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