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Plain English - Organise: Difference between revisions
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It is easier to start with something genuinely awful, like a Linklaters MTN Programme or something like that. But it would probably work as well if you are starting with a fresh piece of paper. | It is easier to start with something genuinely awful, like a Linklaters MTN Programme or something like that. But it would probably work as well if you are starting with a fresh piece of paper. | ||
=== Order === | == Organise ===== Order === | ||
'''Client-centric''': Structure your document to be as ''[[persuasive]]'' as possible. Persuasive to who? The client. You do not need to persuade ''your own risk department'' to sign your own document.<ref>OK this is not necessarily true, but you ''should not need to''.</ref> You ''do'' need to persuade the customer to sign it. Therefore: | '''Client-centric''': Structure your document to be as ''[[persuasive]]'' as possible. Persuasive to who? The client. You do not need to persuade ''your own risk department'' to sign your own document.<ref>OK this is not necessarily true, but you ''should not need to''.</ref> You ''do'' need to persuade the customer to sign it. Therefore: | ||
* '''Fun stuff first''': Put terms that are most important to the client first. What are you going to do for the customer? What are the customer’s key benefits? What are its objectives? Get this in first. Make the customer’s first reaction, when it sees the draft, “YES!” Tick! Make its ''second'' reaction also a TICK! ''Have the customer thinking happy thoughts about you and this document''. | * '''Fun stuff first''': Put terms that are most important to the client first. What are you going to do for the customer? What are the customer’s key benefits? What are its objectives? Get this in first. Make the customer’s first reaction, when it sees the draft, “YES!” Tick! Make its ''second'' reaction also a TICK! ''Have the customer thinking happy thoughts about you and this document''. | ||
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* '''Font''': choose an easy-to-read font. Fortunately, UBS house font Frutiger 45 light is excellent, so use it. | * '''Font''': choose an easy-to-read font. Fortunately, UBS house font Frutiger 45 light is excellent, so use it. | ||
* '''Paragraphs''': Format your paragraphs to have extra space at the end. 6pt is usually enough. | * '''Paragraphs''': Format your paragraphs to have extra space at the end. 6pt is usually enough. | ||
* '''Columns''': Consider putting longer standard terms documents into columns. Yes, that requires being a ninja at MS Word, but shorter lines of text are easier to read. It also forces you to keep paragraphs shorter. | |||
=== Break it down into manageable pieces === | == Deconstruct ===== Break it down into manageable pieces === | ||
Break into sub-paragraphs. Breaking a long paragraph into a shorter one exposes its logic to a skim-reader, and makes it far easier to navigate. And may expose that the tortured logic is not really necessary. For example: | Break into sub-paragraphs. Breaking a long paragraph into a shorter one exposes its logic to a skim-reader, and makes it far easier to navigate. And may expose that the tortured logic is not really necessary. For example: | ||
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''<small>Such subordination could significantly reduce the amount of available proceeds receivable by the Noteholders following the liquidation of the Collateral or on an enforcement of the Security.</small>''}} | ''<small>Such subordination could significantly reduce the amount of available proceeds receivable by the Noteholders following the liquidation of the Collateral or on an enforcement of the Security.</small>''}} | ||
Now no-one in their right might would claim this | Now no-one in their right might would claim this is elegant drafting, but at least you can see its ''shape''. Notice, too, that as you break it up you start to see its flaws: its punctuation is inconsistent. They forgot to peg out ''Hedge Counterparty amounts'' and ''Vendor amounts''. And notice, too how, as a [[legal eagle]], you are drawn into it, like a moth too a lamp, parsing the elements, at the back of your mind wondering “''how can I fiddle with this to somehow make it better?''” | ||
So, consider this: | So, consider this: | ||
{{subtable| | {{subtable| | ||
''<small>Before you are paid your Redemption Amount under the Notes the Issuer must first settle any liabilities it owes that rank ahead of payment obligations under the Notes, including amounts it owes the Trustee and Note services providers and its tax liabilities. This may reduce how much you ultimately receive under the Notes.</small>''}} | ''<small>Before you are paid your Redemption Amount under the Notes the Issuer must first settle any liabilities it owes that rank ahead of payment obligations under the Notes, including amounts it owes the Trustee and Note services providers and its tax liabilities. This may reduce how much you ultimately receive under the Notes.</small>''}} | ||
Note here that patient reduction reveals that the tortured logic ''was not needed at all''. You didn’t need to break out seven categories of thing, or even mention them. The principle is simple: you don’t get paid until all the contractors have been paid. The order, and the itemisation, doesn’t matter.<ref>To be sure, the order of priorities may matter a great deal to those different classes of contractor, but this is a Note prospectus. ''This is not designed for them''. The contracts will make this clear.</ref> | |||
=== Create a logical structure === | |||
For longer documents, break your document into sections and subsections (not just clauses) and set them out clearly, on separate pages. Make it as easy as possible to navigate. The discipline of putting a superstructure over your agreement will help you uncover redundancies and contradictions. | |||
=== | === Separate the boilerplate from the negotiated terms === | ||
Don’t mix up the [[Boilerplate|dull stuff]] that you have to have because — well, everyone ''knows'' you have to have it — from the vital economic stuff that makes the contract tick, and over which prolonged jousting is inevitable. Why? Because if you don’t you can be guaranteed some dreary fusspot on the other side will launch into a broadside on your standard form custody terms to no obvious end other than his own parochial victory. Don’t invite him in to do that. | |||
For frequently-negotiated standard forms, consider putting your standard terms in an entirely different document from the frequently-negotiated economic and legal terms, and having the customer agreement as a termsheet style “Elections” document.<ref>For a good example of a “general terms” approach, see UBS’s [www.ubs.com/gfsterms GFS Suite]).</ref> This has a number of practical advantages once the document is in live: | |||
* It is simple to see a given customer’s deviations from the standard, because they are listed in the Elections document. There is no ploughing through a 60 page scanned .pdf from 2002 wondering what the standard was, and what bits of it were amended. | * It is simple to see a given customer’s deviations from the standard, because they are listed in the Elections document. There is no ploughing through a 60 page scanned .pdf from 2002 wondering what the standard was, and what bits of it were amended. | ||
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{{sa}} | {{sa}} | ||
*[[Purpose]] | *[[Purpose]] — why a legal contract does different things and different times for different constituencies. | ||
{{ref}} | {{ref}} | ||