You’ve spent every last painstaking second of Gladwell’s proverbial 10,000 hours becoming a half way decent contract attorney when it hits you: most of that time was not working on contracts at all - it was wasted squinting at documents on a computer screen and playing mental games such as the old “what isn’t here that should be?” and everyone’s favorite “at least they brought me in at the last second when I could really make a difference”.

Well fellow squires and future magistrates - I say no more! What if… just stay with me now… what if we had programmatic contract negotiations?

There is no possible way I am the first to think of this, and its only for sheer ignorance that I can’t point to the real inventor (and intentional ignorance in the form of not even googling before writing this) but…what if instead of pushing redlines back and forth with Sharon, the parties started the contract negotiation with a blank template that includes nothing except immaterial boilerplate.

Nearly every issue ever written into a contract has been thought of already (conceptually anyway).

So - A database could be created that includes every category of normal contract sections (i.e.. scope of work, compensation, term and termination, indemnity and insurance, and so on… each a “Contract Category”). There would be a primary Contract Category of standard commercial terms and many secondary Contract Categories based on the subject matter of the underlying transaction. Within the database, each and every Contract Category would have 3, 5, or 7 available provisions (any odd number), with each provision including a score range of favorability for each party. For example, if there are 3 indemnity provisions, the most mutually fair and agreeable provision is scored 0, the provision most favorable to the seller is scored +1, and the provision most favorable to the Buyer is scored -1.

Back to real life: Buyer and Seller decide to transact, and so their lawyers meet and confer. First, they agree on key parameters: (i) each party would select all of the primary and secondary (subject matter specific) categories it finds important, and (ii) the number of options within each Contract Category is agreed upon - it will be the same number of options for every category. Now a full roster of Contract Categories is generated. That was the big bang and we have the universe!

Note - Least Cost Avoider application here or at Negotiation Points below? (or both?) Depends on if the parties can agree about where the risk even lies within the contract. However, some concepts on their face include more risk for one party over the other, and the most efficient outcome is for LCA to be applied any time risk profiles become clear on a particular Contract Category.

Next, the parties would stipulate as to the Contract Categories they do not care about, and any such mutually agreeable poopoo’d Contract Categories would have provisions with a score of 0 populated into the template, alongside the immaterial boilerplate. Then for Contract Categories where one party does care and the other does not, the corresponding scored provision gets populated (in the example of 3 options; (-1) for Buyer and (+1) for Seller).

Note - The weighted provisions get plugged into the template but these do NOT count towards the score below. Note - does this create perverse incentives to lie? (Yay we are building……).

Now it gets fun. Each party would receive a roster of the remaining Contract Categories (the “Key Negotiation Points” or “KNPs” for short). Each party would then rank the KNPs in order of relative importance to such party (for example: ordering by 1 through X, where 1 = the party’s most important issue and X = the total number of KNPs, and the higher number would equate to lesser importance to such party). Once each party has completed its own order of KNPs, both parties’ order-scores for each KNP are combined and divided by two to arrive at the “Order of Negotiation” (or magnitude). Ties are resolved in favor of the KNP that receives the lowest single party order-score (for example, if two KNPs are tied at a combined order score of 8, and one was ranked 4,4 whereas the other was ranked 2,6 - the 2,6 KNP would prevail for Order of Negotiation purposes.

IDEA 1: Each Party would then receive a number of tokens equal to 2*X.

IDEA 2:

[UNDER CONSTRUCTION - IF YOU READ THIS FAR YOU ARE FARTHER THAN YOU WERE SUPPOSED TO BE. JEEZ GIVE ME A DAY OR TWO AND THE WORM WILL BE FINISHED YOU EARLY BIRD. ITS LATE AND I AM TIRED AND NEED TO GET SOME SLEEP!! :-) ]

I hear you screaming through the screen - what lawyer worth a tenth of an hour of their billable time would ever agree to do something that would cut down on billables?!?! Such madness!!

Well for this one - I’d rather be in the mountains or on a golf course instead of wondering why the customer’s paper is so dreadfully archaic and one sided (watching the minutes tick away late on a Thursday night……)

You’ve spent every last painstaking second of Gladwell’s proverbial 10,000 hours becoming a half way decent contract attorney when it hits you: most of that time was not working on contracts at all - it was wasted squinting at documents on a computer screen and playing mental games such as the old “what isn’t here that should be?” and everyone’s favorite “at least they brought me in at the last second when I could really make a difference”.

Well fellow squires and future magistrates - I say no more! What if… just stay with me now… what if we had programmatic contract negotiations?

There is no possible way I am the first to think of this, and its only for sheer ignorance that I can’t point to the real inventor (and intentional ignorance in the form of not even googling before writing this) but…what if instead of pushing redlines back and forth with Sharon, the parties started the contract negotiation with a blank template that includes nothing except immaterial boilerplate.

Nearly every issue ever written into a contract has been thought of already (conceptually anyway).

So - A database could be created that includes every category of normal contract sections (i.e.. scope of work, compensation, term and termination, indemnity and insurance, and so on… each a “Contract Category”). There would be a primary Contract Category of standard commercial terms and many secondary Contract Categories based on the subject matter of the underlying transaction. Within the database, each and every Contract Category would have 3, 5, or 7 available provisions (any odd number), with each provision including a score range of favorability for each party. For example, if there are 3 indemnity provisions, the most mutually fair and agreeable provision is scored 0, the provision most favorable to the seller is scored +1, and the provision most favorable to the Buyer is scored -1.

Back to real life: Buyer and Seller decide to transact, and so their lawyers meet and confer. First, they agree on key parameters: (i) each party would select all of the primary and secondary (subject matter specific) categories it finds important, and (ii) the number of options within each Contract Category is agreed upon - it will be the same number of options for every category. Now a full roster of Contract Categories is generated. That was the big bang and we have the universe!

Note - Least Cost Avoider application here or at Negotiation Points below? (or both?) Depends on if the parties can agree about where the risk even lies within the contract. However, some concepts on their face include more risk for one party over the other, and the most efficient outcome is for LCA to be applied any time risk profiles become clear on a particular Contract Category.

Next, the parties would stipulate as to the Contract Categories they do not care about, and any such mutually agreeable poopoo’d Contract Categories would have provisions with a score of 0 populated into the template, alongside the immaterial boilerplate. Then for Contract Categories where one party does care and the other does not, the corresponding scored provision gets populated (in the example of 3 options; (-1) for Buyer and (+1) for Seller).

Note - The weighted provisions get plugged into the template but these do NOT count towards the score below. Note - does this create perverse incentives to lie? (Yay we are building……).

Now it gets fun. Each party would receive a roster of the remaining Contract Categories (the “Key Negotiation Points” or “KNPs” for short). Each party would then rank the KNPs in order of relative importance to such party (for example: ordering by 1 through X, where 1 = the party’s most important issue and X = the total number of KNPs, and the higher number would equate to lesser importance to such party). Once each party has completed its own order of KNPs, both parties’ order-scores for each KNP are combined and divided by two to arrive at the “Order of Negotiation” (or magnitude). Ties are resolved in favor of the KNP that receives the lowest single party order-score (for example, if two KNPs are tied at a combined order score of 8, and one was ranked 4,4 whereas the other was ranked 2,6 - the 2,6 KNP would prevail for Order of Negotiation purposes.

IDEA 1: Each Party would then receive a number of tokens equal to 2*X.

IDEA 2:

[UNDER CONSTRUCTION - IF YOU READ THIS FAR YOU ARE FARTHER THAN YOU WERE SUPPOSED TO BE. JEEZ GIVE ME A DAY OR TWO AND THE WORM WILL BE FINISHED YOU EARLY BIRD. ITS LATE AND I AM TIRED AND NEED TO GET SOME SLEEP!! :-) ]

I hear you screaming through the screen - what lawyer worth a tenth of an hour of their billable time would ever agree to do something that would cut down on billables?!?! Such madness!!

Well for this one - I’d rather be in the mountains or on a golf course instead of wondering why the customer’s paper is so dreadfully archaic and one sided (watching the minutes tick away late on a Thursday night……)