Gizmo pelmanism

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The Devil’s Advocate

The legal contract landscape yesterday

In which the curmudgeonly old sod puts the world to rights.

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The little dongly things I am concerned with are the external power adaptors which laptops, palmtops, cassette recorders[1] and other incredibly necessary gizmos need to step down the mains AC supply from either 120v or 240v to 6v DC. Or 4.5v DC. Or 9v DC. Or 12v DC. At 500 mA. Or 300 mA. Or 1200 mA. They have positive tips and negative sleeves on their plugs, unless they have negative tips and positive sleeves.

By the time you multiply all these together you end up with a major industry which exists, so far as I can tell, to fill my cupboards with little dongly things none of which I can ever positively identify without playing gizmo pelmanism.

Now why is this? Well, there’s one theory, which is that just as Xerox is really in the business of selling toner cartridges, Sony is really in the little dongly power-supply business.

Another possible reason is that it is sheer blinding idiocy. It couldn’t possibly be that could it?

— Douglas Adams (1994)

Gizmo pelmanism” is such a beautiful concept. It could describe much of modern legal practice.

In much the same vein, W. Edwards Deming writes[2] about the value to the whole system of commoditised public standards: railway gauges; fork-lift pallets, containers — standards which, once everyone adopts them, just make the whole world’s life easier. No single solution is perfect — undoubtedly some advantages accrue to having wide gauges, and some to having narrow gauges, but neither confers as much net benefit as having everyone on the same gauge. Once there is critical mass, the incentives point only one way.

Standardisation by regulation

But how to achieve the necessary critical mass? One way is regulation: it might aggravate laissez-faire purists, who would say regulation shouldn’t be necessary, but it does work. The dear old European Union has long been a standard-bearer: the internal market, the “four freedoms”,[3] and, well, a public common standard for phone chargers in 2009.[4] This change, whcih came over strong objections from Apple[5] boosted the move towards the USB-C standard. Suddenly, up to a given wattage, you can plug any device in anywhere, and it works.

Apple seems to have survived and, I dare say, thrived notwithstanding.

Netting pelmanism

Other opportunities lie yet on the table. How much more efficient, cheap, straight-forward and standardised would trading documentation be if the Basel Committee on Bank Supervision itself obtained legal opinions on master trading agreements, and published them, and the agreements they related to, to all financial institutions as a technical standard? How much more influence would Basel have over the legal standards in a given jurisdiction than does ISDA?

“You may have capital relief from close-out netting if you execute this agreement, on these terms, to these counterparty types in these jurisdictions.”

Boilerplate as “gizmo pelmanism”

The JC humbly submits, with the same unmediated gut instinct that propels many of his strongest convictions, that those who try to build proprietary interfaces out of touch-points that should be common — nodes, intersection points on a distributed network, utility crossings where everyone (bar a gate-keeping rent-seeker) would benefit from transit without friction — deserve a place in the stockade where we can all pelt them with cabbage.

To be sure, trying to impose a toll gate can be a self-imposed stockade anyway (remember Betamax?) — but not always: for Apple vendors who dominate their markets, proprietary formats survive, even those which wilfully interpose friction (DVD region encoding!) and thrive. At all of our costs. Even the dominant vendors’.

Emergent standardisation?

But shouldn’t the unmediated forces of competition work so that common standards emerge by themselves? If not, why not? What incentives are at play that prevent it? Our nascent view: the modern notion that “utility text” has commercial value as intellectual property leaves us all — including the owner — poorer, as we spend our days playing Gizmo pelmanism with each other and not listening to each other’s Walkmans. Walkmen. Walkpersons. And, really — are you really charging £900 an hour for your superior boilerplate?

Where commerce has worked this way, helped by the enlightened unselfishness of people like Tim Berners-Lee[6] and Jimmy Wales[7] staggering things have come about. Where it has not — and we are bound to note legal practice as being such a place — everyone remains mired in complication, chaos, cost, delay and, above all, tedium. Imagine if a contract were a universal API for all commerce. This is what it should be: a contract is a transfer: it is a connection point between two nodes on a network. Why are we so far from the end-to-end principle?

You can put this down in good part to anticompetitive instincts: regulatory and sociological barriers to entry to the legal profession — the Law Society’s and the Bar Association’s very raison d’etre is to maintain the stance that legal practice is ineffable. ISDA claims intellectual property in what should be — surely is — a common public utility. But it benefits no-one should extract rent from boilerplate — much less pay it.

The information revolution has enabled our “drift to complicatedness” — with that drift, a view has congealed in the collective that the resulting “legal technology” that we can now so easily generate somehow has intrinsic value — is proprietary, deserving of commercial protection. but is it not better to see good market-standard contractual terms as a common interface between market participants: a public utility that enables business to get done with minimal friction? Contract technology should not proprietary; rather contracts — agreements made out of contract technology — may be confidential. To confuse a contractual confidence with a proprietary right in intellectual property comprising the contract is to make a category error.

This is our challenge: to overcome our ingrained instinct to regard the quotidian tools of our trade assomehow special. For we do not add value with our boilerplate. So here is our wishful prayer of hearty success to the OneNDA project. A standardised NDA might seem a small step for an open-source start up but, in spirit, a giant leap for eagle-kind?

Set your loved ones free, legal eagles: contributing to a common fund allows the wisdom of the crowd to winnow down and fitness-select the best terms for everyone: stop claiming false propriety over common public standards.

No more gizmo pelmanism.

See also

References

  1. Adams died a while a go now, may he rest in peace.
  2. The Essential Deming, ed. Joyce Orsini, Ch. 7.
  3. Remind me why did the UK leave again?
  4. press release here.
  5. What the EU mandate for a common smartphone charger meansApple Insider
  6. The World Wide Internet.
  7. WikiMedia.