Friday, February 21, 2014
Kingsley Martin of KM Standards gave a luncheon address on "The Emergence of Contracts Standards and Its Future Impact on Legal Education." He introduced us to some very impressive technology that can greatly increase the efficiency with which practicing attorneys review standard agreements. Here's what it looked like:
This technology enables an attorney to review a new document, say a merger agreement, by comparing it to a database of say 15 similar documents. It immediately identifies the provisions that are similar to those found in the database, those found in the new document and not in the database, and those not found in the new document but common in other, similar agreements. An attorney can then quickly pinpoint what is missing from the document and might need to be added and what unusual provisions might regard careful scrutiny.
More particularly, the technology can also use the database to identify the most common language used in standard provisions and also variations in standard provisions so that one can see the range of how parties work out standard terms and pick out the language that is best suited for a particular deal.
The steps are to identify the unitary elements of standard form agreements, identify the clauses components and then draft clauses in clear, standard English. Ultimately, Martin thinks that such the technology can help attorneys negotiate optimal terms. For example, if you are trying to find optimal compensation in an employment agreement at a public company, you could go on to EDGAR and get all the filings that disclose compensation terms. The parties then should be able to discern from the data an appropriate compensation package.
How might this affect teaching? He thinks his basic contracts clauses could be reduced to playing cards. One might then run various simulations with students (or one could just choose to characterize the exercise as a "game" that they students "play"). The students can then choose and negotiate using the various cards and see if they can work out a satisfactory deal. Or they may not be able to achieve a satisfactory deal through the use of common terms, and then the challenge is to see if they can draft unique language suitable to their ends.
Anyone interested in seeing what the cards might look like can check them out here.