ILTA KM Webinar "An Insider's Guide to New Corporate Drafting Tools"

ILTA KM Webinar "An Insider's Guide to New Corporate Drafting Tools"

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:

· V. Mary Abraham of Above and Beyond KM

· 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. 

 They've found that Exemplify generates great efficiencies because it cuts down on reviews of public documents to determine "what's market."  Comparing against market also reduces risk.

 It's best when it's used to analyze one provision at a time. Pasting in multiple provisions is possible but doesn't work well when used extensively. 

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. 

Litigation Knowledge Management Sample Filing & Retrieval

A question was posed on the semi-private ILTA listserve this week that asked the KM peer group for assistance with folder structures that litigators have "actually used" for filing KM sample materials, presumably in folders or by document types in a document management system.  With the submitter's permission, I'm addressing that question here as well.

I can't say I've had too many positive experiences with expecting / asking lawyers to file or folder materials for KM purposes in any folder structure. This type of activity is outside their workflow, and inevitably the materials you get are very limited, quickly go stale, and / or are not referred to later.  Attorneys simply have too little motivation to routinely and successfully carry out this activity, in normal circumstances. My opinion is, if you had a detailed enough taxonomy of papers to be helpful in finding or browsing work product, it would inevitably be too complex and difficult to use from a filing perspective. In other words, it's generally not worth it and won't work (not to be too negative!)

I've taken two approaches to the "sample litigation papers" need. The one most comparable to what you are thinking of took all of the pleadings from a half-dozen cases, and grouped them in case timeline order by the most commonly used types of papers, at the following level of detail:

A. Initial Pleadings

1. Complaints (link)
2. Answers (link)
3. Replies (i.e., in response to counterclaim, not a reply brief)

B. Response to Complaint

1. Preliminary Injunction--Motion
2. Preliminary Injunction--Memorandum in Support or Opposition
3. etc. etc.

The documents were organized and displayed on our SharePoint portal via a SharePoint list. The purpose of this system is not to provide the "best" samples of particular types of papers, but to provide less experienced practitioners (such associates and paralegals) with a basic understanding of what the types of papers contain and look like.

For more substantive drafting and legal research purposes, we use document search and retrieval tool West KM, which has the huge advantages of A) automatically drawing on all of the litigation documents saved to the document management system and B) having its own automated document categorization engine. It also supplies case validation signals, and lets attorneys locate firm work product based on case and statutory authority cited in that material, which is a huge time-saver. The major effort required once it's set up is on user training and adoption.

If you don't have West KM or a comparable product such as Lexis Search Advantage, another approach you might want to consider is setting up "canned" searches of your document management system. iManage actually has fairly sophisticated capabilities in this regard, although they aren't as user-friendly as one might hope. Modern enterprise search tools also typically provide canned search capability, which can also obviate the need for lawyer filing.