Template:M intro design mark-up the last deal

When JC was but a young eaglet he had his first crisis encounter with the General Counsel of an investment bank.

General Counsel, as we all know, are a source of infinite wisdom, metis, pragmatism and robust creativity. No formal legal problem is so intractable that a good GC can’t confect a way out of it.

We had a problem, boss, and we weren’t sure what to do.

The GC scratched his chin thoughtfully for a minute, then fixed JC with the stare of the Infinitely Wise and asked, “well, what did we do last time this happened?”

Tempates as a source of clutter

It is axiomatic that a commercial legal contract is eighty per cent boilerplate. That being the case, it stands to reason that preparing one is largely a formal and tedious occupation. No one wants to be drafting counterparts clauses out of clear blue sky on blank paper.

It is also generally true that most contracts are by and large like ones that have been done before. Since an existing contract has, by definition, crossed some threshold of approval, and responsibility for that approval lies with someone else, the buttocractic oath leads those creating new contracts to start with an existing one.

There is a short-term productivity advantage to this as well: it is much less trouble to mark up an existing template and much easier for counterparts to review the delta by means of a redline.

These are more or less axioms. But so is this: all contracts contain bluster, confusion, positional posturing and guff.

Templates as “accountability sinks”

Contracts with any significant lineage — and that is most of them —will thus be riven with the scar tissue of past battles whose combatants no-one now remembers, pock-marked with the bulletholes of tendentious negotiation stances, client red lines and peculiar accounting conditions that made little sense at the time and for which no-one can remember the rationale now.

These scars and fossil traces have a habit of surviving in templates in a way that innocuous, or, God forbid, useful legal terms do not.

Seen this way, a legal template — which may have an owner — usually a junior lawyer assigned “formal responsibility” for it who has neither mandate nor gravitas to improve it, and who inherited this role from someone else now departed, at whose door any problems can be laid — but will certainly not have a single author — is a classic accountability sink. No-one is responsible, let alone incentivised, to correct things that are already there.

The eternal trade-off

Therefore the modern eagle is almost always presented with a choice: do the minimum damage to the crappy template we are currently using, notwithstanding its errors, misconceptions and emotional baggage, and get this deal across the line now and maybe fix the template later, or spend time fixing the template, reengineering its form and substance to clear out errors and confusions in the draft now, ask everyone to read it, and thus save time later as it will be a better template to base future deals on.

Invariably lawyers will opt for the path of least, short term resistance. (Remember, they can’t be blamed for a template they did not create)

Buck this trend, brave eagles of the law. Have some professional pride. Get it right. Take, and ask of your negotiating counterparts, a small amount of effort now to avoid a lot of confusion, ennui and at the limit risk later.

You will always be wanting to whip up the next deal as quickly as possible. There is never a good time to sort the template out. The “short-term” versus “long-term” trade-off will always be the same.

Take the medicine; don’t put up with a chronic condition.