It’s very common to categorise contracts as either B2C (business-to-consumer) or B2B (business-to-business).

I’d like to introduce another category: L2L contracts, or lawyer-to-lawyer contracts.

I’ll admit straight away that I’m not using ‘L2L’ in quite the same way as ‘B2C’ or ‘B2B’ are typically used – but there are strong parallels (as I’ll come to).

Normally, the terms B2C and B2B describe the type of parties that enter into a contract. So, a B2B contract is one between two businesses, whereas a B2C contract is one between a business on one side and a consumer on the other.

(In this context, a ‘consumer’ generally means an individual who’s buying something for their personal use – although the law does create some grey areas for very small businesses.) 

What do I mean by L2L?

When I use L2L, I don’t mean a contract between two lawyers, or two law firms. I’m using it to describe the people who are primarily involved in preparing and agreeing the contract. Through that lens, an L2L contract becomes one where it’s lawyers that lead the process of writing, reading, negotiating and finalising the contract documents on both sides.

Others may be involved, but typically they won’t engage directly with the contract terms. Instead, they’ll rely on their lawyers to create a summary, or they’ll just read specific sections that a lawyer has flagged as important or unusual.

This means that it’s lawyers who will be the main – if not the only – audience for L2L contracts. Or, to put it another way, it’s lawyers who are the key ‘users’ of the contract documents; and lawyers who have the greatest interest in how they are written and used.

What’s this got to do with B2C and B2B contracts?

You may be thinking: “hang on, aren’t lots of B2B contracts created and agreed by lawyers?”.

Well, yes. The vast majority of L2L contracts – as I’m using the term – will be B2B contracts in the more traditional sense of a contract between two businesses.  The reverse isn’t true, though. Lots of B2B contracts are agreed every day without lawyers involved. And this is where it becomes helpful to be able to distinguish between L2L contracts – where lawyers largely run the show – and contracts where lawyers have little or no involvement. 

To do that, it’s helpful to start thinking of B2C and B2B in a similar way to how I’m using L2L. In other words, to focus on the individuals involved in the contract process, rather than the organisations they work for. When you do that, the ‘B’ starts to represent a business person (or group of people) that will lead on finalising a contract with little support from a lawyer.

Why does it matter? 

That question could probably sustain a few PHDs, but let me try and capture a some thoughts that originally prompted this post. I may pull harder on these threads in future.

A (growing) cultural divide

It’s no great insight to point out that lawyers tend to write contracts in a way that is, er, lawyerly. They also format and structure documents in a particularly legal way, which adds more barriers to entry.

Lawyers are trained and conditioned to use a legal style, which not only becomes familiar, but actually becomes easier for them to use. It’s a sort of code where words and phrases develop common meanings.

Some of this is not just OK, it can be positive. And the same sort of thing happens in other walks of life. Doctors talk doctor. Accountants talk accountant.

The problems come when someone who’s not a lawyer (or used to working with legal documents) needs to read and understand a contract. The obvious example being a consumer that struggles to read online terms and conditions – or, more likely, just ignores them.

Legal language can be hard to follow for anyone who’s not used to reading it. The trouble is, it’s also hard for those who are used to reading it to stop writing it. And that’s because lawyers typically learn their craft in a culture of L2L contracts.

Now, if you’re a lawyer who’s used to communicating with other lawyers, why would it be a problem to adopt a legal style? And if your ultimate worry is the potential scrutiny of a judge (the lawyerly-ist of lawyers) is it actually a bad thing if you don’t? Then again, should that be your ultimate worry?

There’s a lot to unpack there (I wasn’t joking about the PHDs); but the broader point I wanted to highlight is the growing cultural gap I see between those who work almost exclusively with L2L contracts and those who work in the ever-developing world of B2B and B2C contracts (as I’m using those terms).

It’s fair to say that B2C contracts have always been seen as a bit ‘other’ – with extra layers of regulation that apply to protect consumers. That’s one of the reasons the terms B2C and B2B came to exist. Perhaps more interesting, though, is the growing divide between L2L contracts and other B2B contracts. These have generally coexisted on the same land mass, but I sense that their tectonic plates are starting to drift apart.

I see a number of trends contributing to this – and together, they have the potential to raise some quite profound questions about how we all – but particularly lawyers – write, interpret and think about contracts more broadly.  

The times they are a-changing

Here’s a very quick run through some of those trends; some of which aren’t especially new.

Increasing regulation of consumer contracts

There’s an increasing library of laws and regulations that attempt to tackle the problem of contracts being impenetrable to consumers. These laws put the onus on service providers to make their contracts clear and accessible.

There’s plenty of examples, but to pick a couple from Europe and the UK:

• the EU Consumer Rights Directive 2011^[i] includes obligations on businesses to provide consumers with information in a ‘clear and comprehensible manner’ (Article 5) and ‘in plain, intelligible language’ (Article 7);

• the UK Ofcom General Conditions – which apply to businesses that provide internet and telephone services in the UK^[ii] – include an obligation to provide consumers with a short contract summary setting out key contract information (Condition 1.5)^[iii].

These types of regulation are creating a growing band of lawyers who have had to grapple with how to write contracts for a consumer audience.

These B2C content lawyers remain a relatively niche group. From my experience, they’re more likely to work in-house for consumer businesses, rather than in law firms. And generally, they are having to (re)learn and self-teach the art of writing contracts for consumers because, on the whole, their legal training is likely to have happened in L2L environments with all the engrained cultural baggage that bestows. (More on this later.)

The rise of contract design

Alongside the rise of consumer laws – and perhaps, in part, because of them – there is now an emerging (but still small) group of dedicated ‘contract designers’ or ‘legal designers’ who are working to improve how contracts communicate complex information. (I talk more about contract designers in this post.)

Some are (or were) lawyers that now self-style as designers. A few come from other design backgrounds. This reflects, I think, a small but significant step towards acknowledging that the communication of ‘legal’ information to those who aren’t lawyers is not something that lawyers are well placed to do alone.   

Naturally, a lot of the work of contract designers has revolved around B2C contracts, but it’s impacting business contracts too.

The rise of the Cloud and standard terms (the ‘consumerisation’ of business terms)

With the rise of the internet, more and more business services are provided online. In this world, the shift towards Cloud-based service models – like software-as-a-service (SaaS) or infrastructure-as-a-service (IaaS) – is near total.

These services are normally built as standard products, with a one-size-fits-all approach. And what’s true of the technology is also true of the way it’s sold.

Cloud-based products are typically offered with standard online terms and conditions that are non-negotiable (unless you happen to be a mega-customer; but even then, the scope for negotiation is limited). If that sounds like the way consumer products are sold, it’s because it is. And the consumerisation of Cloud services doesn’t end there.

Despite there being less regulation that dictates how business contracts must be written, businesses are increasingly recognising that, if you’re going to try to impose non-negotiable contracts, it helps to make them simple, clear and balanced. To that end, more online contracts are eschewing the traditional language and format of business contracts and targeting a more plain-language approach. You can see this, for example, with the evolution of Google’s Terms of Service. Gone are the numbered clauses and formal titles, to be replaced with friendlier headings like ‘What you can expect from us’ and ‘What we expect from you’ (to give just a very small flavour).

As with consumer contracts, the lawyers at the coal face of this work are more likely to work in-house for the businesses that sell the products. This is partly because it helps to have a good insider knowledge of the business and the products to do the job well. And it’s also because, for mega-corps like Google, it can be an evergreen task – like painting the Forth Bridge – which makes it harder to outsource.

The rise of self-service (the ‘de-lawyerfication’ of contract documents)

The previous trends have largely focussed on non-negotiable online contracts, but this next one is starting to affect a much broader range of B2B contracts too.

The last decade has seen huge amounts of attention and investment focussed on streamlining how contracts are agreed and managed. There’s plenty of drivers for this, but the obvious ones – it won’t surprise you to hear – are reducing time and cost.  

One way of achieving those aims is to reduce dependencies on lawyers wherever you can (and where appropriate). To achieve that, it helps to start creating contracts that business people can use with little or no support from lawyers. Or, to put it another way, it helps to deliberately start creating B2B contracts instead of L2L contracts. And so, very slowly, this is starting to happen.

Creating B2B contracts ‘by design’ involves various things, but to give you a flavour, it can include:-

• Balance. Creating contracts that target a reasonable starting point (to limit lawyers getting dragged into unnecessary negotiations).

• Simplicity. Writing contracts in plain language (to stop people feeling like they need a law degree to read them and so passing responsibility back to lawyers).

• Targeting. Separating contracts into different parts that reflect the relevant users (to stop lawyers getting dragged into issues that don’t need their input).

• Flexibility. Developing flexible content that can be adapted for different scenarios, often through the use of technology (to help business users self-serve without input from lawyers).

I could go on, but it’s worth reflecting on a couple of those points; particularly the significance of targeting.    

Contracts are not one thing

If you want to create contracts that are less lawyer-centric, an important step is to start thinking of contracts as a collection of different issues or themes that need to be covered, rather than as single, monolithic documents. This allows you to identify which areas really need input from lawyers; and if so, what that involvement should look like.

In this sense, the distinction between L2L contracts and B2B contracts doesn’t just apply to contracts as a whole. It’s also a helpful way to think about the different parts of a contract – especially for larger contracts that are typically made up of multiple documents or sections.

Once you start thinking of contracts as ‘L2L issues’ and ‘B2B issues’, you can begin to create each bit of content with the relevant audience in mind; bearing in mind, here, that there is no such thing as a generic businessperson. Instead, contracts will typically need to address a range of different audiences and topics, such as financial, technical, operational and more^[iv].

It’s not about making lawyers extinct

I should say at this point that none of this is an argument for cutting lawyers out of every contract process, or to say that L2L contracts are inherently worse than B2B contracts.

Despite the name, most B2C and B2B contracts are, and should continue to be, written with the involvement of lawyers. In fact, I’d argue that it’s especially important that lawyers are involved in developing B2C and B2B contracts because, by definition, once they’re released into the wild it’s less likely that lawyers will be directly involved again (unless there’s a problem or dispute). That makes it all-the-more vital that they’re built on legally solid foundations.       

But of course, this creates a tension. For all the reasons I’ve flagged, there’s a certain irony to the argument that lawyers should be involved in creating contracts designed for lawyers not to be involved in!^[v]  Not because they’re incapable of it (in theory), but because, in practice, everything about the way lawyers write contracts is still so grounded in an L2L culture.

“Is there a precedent for this?”

I’ve already mentioned that, from my experience, most lawyers at the forefront of creating more accessible B2C and B2B contracts work in-house, not in law firms. There’s good reasons for this. But there’s also some not-so-good ones driving it too. 

As it stands, if you want the support of a law firm to create more accessible and plain-language contract content you’ll face some hurdles. A big one is that most law firms won’t have ready-at-hand resources to do it well (yet).

So much of the way contracts are written is based on reusing existing content. Lawyers rely heavily on precedent (or template) wording created by others. Many argue that this is for sound legal reasons; to ensure that the content they’re using is ‘tried and tested’ and reflects the latest legal developments. And whilst there’s some truth to that, it’s overplayed. The main reason why content is forever reused is a very practical one: it’s by far the quickest and easiest – and by extension, the cheapest – way to generate new contracts.  This, more than anything else, is why the traditional legal style persists.

The challenge for anyone wanting to adopt a different style is that they face the prospect of doing something that’s likely to be slower and harder – and by extension, more expensive – at least until such time as there’s easy and widespread access to suitable resources to reuse.

Over time, that may start to happen as prevailing styles evolve, but it won’t happen very fast – especially for L2L contracts. What’s more, the whole notion of creating contracts designed for specific audiences and use-cases raises some questions about how the use of legal precedent itself will evolve.

“Should there be a precedent for this?”

One benefit of the traditional contract format is that it lends itself to relatively simple reuse.

Contracts are typically made up of separate clauses (or sections), which are grouped together and ordered using numbered paragraphs. This structure naturally compartmentalises the content into relatively consistent building blocks that can be ‘copied and pasted’ between documents.   

There’s now a range of alternative styles and formats being adopted, particularly for online terms and conditions^[vi].

One example is to recraft contracts as a list of FAQs, with simple questions and answers. This has the benefit of naturally reframing the focus towards what the reader needs to know, rather than an assortment of issues that the writer feels they need to list. When done well, it can certainly create a much ‘friendlier’ and easier read. But the result isn’t so suited to recycling. For one thing, the text generally takes on a less structured and more freeform style (see again, Google’s Terms of Service).

This problem of building barriers to reuse becomes even more of an issue for contracts that don’t just rely on text, but also include imagery and other graphical elements. All of which leads me to a wider point.

By its nature, creating more targeted and accessible content will often involve focussing on the particular, rather than the generic; whether that’s a particular audience, particular product, particular industry, particular ‘house style’ or a combination of all those and more. In this sense, the exercise reflects a shift towards the more bespoke. And to do that well suggests that to start with what’s been used many times before is to do it ‘wrong’.

But at a macro level, that’s not without its trade-offs. There’s the practical problem of constantly reinventing the wheel: it’s inefficient. But that will be compounded even further if contracts stop adopting the generally recognised shape of a circle and we move toward a world of triangles, diamonds, stars and beyond.  

If I’m right, for example, that it’s currently in-house lawyers who are leading the way (largely through necessity) with creating more accessible B2B and B2C contracts, this is something we may see more of. Whilst in-house lawyers have the benefit of being embedded in their own businesses, they’re also more likely to work in silos. This could create a negative feedback loop that makes it harder to develop new and better common standards, and instead, just drives the constant creation of ‘new’.   

And so, we hit another tension. On the one hand, greater accessibility and usability can be helped by purposely adapting and targeting content for particular audiences and contexts. But on the other hand, developing shared understanding (and ways of working) is also supported by, and grounded in, what’s widely known and familiar.

The questions is: familiar to who?

Which brings us back to where we started: the distinction between L2L, B2B and B2C contracts. It also, I think, flushes out another dimension to it.

Mind The Gap

In the first part of this article, I introduced the idea of L2L contracts by focussing on the different audiences for contracts – or in other words, the various end users who will (or should) read and understand the contracts once they’ve been created.

The second part has naturally veered towards the question of who creates contracts – and how they do it.

When you think about it, this division underpins so many of the issues I’ve raised. In particular, the challenges that can arise when those who create contracts are different to the primary audience.

In the land of L2L contracts, this problem rarely presents itself because the creators and the users are lawyers. That means the issue is unlikely even to occur to the lawyers involved. And in many ways, it’s the very fact of this ‘not occurring’ that is the problem.

For B2C and B2B contracts – as I’m using those terms – there is a difference between creator and audience. The primary audience won’t be lawyers, but the contracts are still normally created by them. And in many ways, it’s the fact that this difference is now being recognised more widely that’s driving change in various quarters – whether that’s being prompted by push-factors, like regulation, or pull-factors, like efficiency.

For B2C contracts, the fact that there’s a difference is obvious. (Perhaps it’s slightly more of a mindset shift to think in these terms for B2B contracts.) Nonetheless, even when the distinction has been staring lawyers in the face, historically, it has had little impact on how they write contracts. On the whole, it remains very lawyer-centric.

I’d argue that has more to do with the practicalities of how contracts are created and used (by lawyers) than it has to do with any wilful desire to make them inaccessible. And that means that, if we want to improve contracts more generally – particularly in ways that move beyond the bespoke reach of the artisans – it’ll always be important to find ways to reflect and address those practicalities; to wrestle with the ‘realpolitik’ of it all, if you like.

Perhaps another way of saying this is: lawyers are key stakeholders too. Even for B2C and B2B contracts, in their role as creators – as well as advisors, and potentially litigators and adjudicators – lawyers remain important users of contract content and resources. So, to improve contracts at scale, it’s not enough just to say ‘focus more on the end users’ without considering the ‘needs’ of the creators too.    

A key aspect of this will always be about finding ways to evolve general practice through awareness, training, resources and so on. A rising tide lifts all boats and all that.

But also, perhaps an increasingly important aspect should be to recognise that not all contract lawyers are (or should be) the same. In the same way that there are different audiences for contracts – and it’s becoming more common to acknowledge that – all this is likely to drive, and require, different skillsets amongst lawyers (including being able to work with other collaborators).

Earlier in this article I used the phrase ‘B2C content lawyers’ as a way of describing those who focus on creating legal content for consumers. Maybe the phrase ‘B2B content lawyers’ could also be used in future. To a greater or lesser extent, these categories already exist (or are emerging), but there is power in giving things a name and recognising specialist skills; not least because it helps to develop communities of practice and support – and in time, potentially, common content and resources.

It does raise the question, though: if we start to see ‘breakaway’ areas of practice for B2C and B2B content lawyers, what does that mean for those L2L lawyers for whom, frankly, all of this is a long way off their radar.  

The untouched land of pedigree L2L contracts

The idea for this article – and the whole notion of L2L contracts – came to me when speaking with a colleague who had trained and worked (until recently) as a project finance lawyer; an area that’s very much an L2L environment. Because of this, they were almost entirely unaware of the trends I’ve mentioned here. And this showed in the way they drafted contracts. Which is not to say that it was ‘bad’ or ‘wrong’. In fact, I imagine that for every contract they’d worked on in their career, their style was appropriate. If they had suddenly adopted a wholly different style, that may have been more ‘wrong’ in the context in which they operated.

But then the two of us found ourselves working together in a different context.

Our task was to turn a sale of goods and support contract (for high-value equipment) from an L2L contract into more of a B2B contract. The aim was to create a template that could be used by a sales team with little or no input from lawyers, as well as to reduce unnecessary negotiation and help deals get done more quickly. In this sense, it was a project that fell squarely within the final trend I described above.  

As we worked together, I realised that lots of the ideas and techniques that had become familiar to me (because it was part of my job to focus on them) were alien to my colleague. We were both lawyers with lots of experience of working with business-to-business contracts (in the traditional sense), but our approaches were quite different.  

It struck me how so many lawyers are still completely insulated from changes happening elsewhere in the industry. That’s entirely understandable when you consider that they work  exclusively in L2L environments that will often have their own sets of industry standard contracts and relatively closed communities of lawyers. Why would they be aware?

This triggered the thought about L2L contracts and the importance of recognising it as a distinct category. Not so that we can all point and moan about how antiquated and inaccessible they are for those without legal experience. But to acknowledge that, both for good reasons and bad, L2L contracts (with their particular styles, formats and ways of working) will persist in areas of practice that are relatively self-contained and where there’s less impetus to change. That includes areas like project finance, corporate finance and mergers and acquisitions (to name a few), which are all heavily lawyered.

And if that’s true – whilst, at the same time, other areas of practice are picking up the pace of change – it’s helpful to be able to find ways to distinguish and describe what’s going on around us, as well as to consider the potential consequences.

Mind The Overlaps

As I come to a close – and reflecting briefly on the theme of consequences – I think there’s one area that raises particularly interesting questions, and it’s slightly counterintuitive. It’s easy to focus on the differences between B2C, B2B and L2L contracts. But for me, the bigger questions lie in the areas of similarity – or the ‘overlaps’.

All contracts include details that are specific to the particular context; things like the pricing and product descriptions. As a general rule, these topics are more likely to fall into the bucket of ‘B2C issues’ or ‘B2B issues’, which can more easily be separated from the ‘legal’ ones and targeted at different audiences. And because they tend to be more context specific, it matters less that different types of contract may deal with them in different ways.

Alongside that content, virtually every contract (of whatever category) will also cover a common set of issues that are generally thought of as being more ‘legal’ – partly because they tend to sit in the main body of the terms and conditions, which are often dismissed as the lawyers’ domain. I’m thinking particularly of important topics like limitations of liability and warranties.

A lot of disputes that reach a court end up focussing on these sections, because they can have a big impact on the parties’ liability^[vii]. That means there’s a lot of scrutiny on how they are written. It’s not uncommon for judges to conclude that very specific words must be used to exclude some types of liability – especially if it could affect a consumer or a small business that doesn’t have easy access to legal advice.

But that approach may have some unintended consequences; particularly where it’s driven by a desire to protect ‘Davids’ (those without lawyers) from ‘Goliaths’ (those with lawyers). Insisting on very specific language – which, in practice, can become quite technical and confusing if you’re not a lawyer – risks driving a dependency on lawyers to try and make sure the ‘right’ words are used.

That’s a key reason why lawyers are so much more comfortable using the ‘tried and tested’ formulas for these types of common clauses, whatever the type of contract. It feels hard to move away from the familiar ‘L2L’ language, even if they know they’re writing for, say, a consumer audience.  And it’s also why limitation of liability clauses often look remarkably similar across L2L, B2B and B2C contracts.

With this in mind, B2C and B2B content lawyers face a conundrum. It will often feel like they have to look (or write) in two directions at once: one way towards the day-to-day audience of consumers and business people; and the other towards the potential legal audience of a judge, that is so influenced by past legal precedent.

It’s easy to say that there shouldn’t be a difference; that if something is written clearly and in plain language, it should be good enough for any type of contract. I agree, in principle. It’s hard not to. And I sincerely hope the speed of evolution will increase across the whole spectrum of contracts. But, because L2L contracts will continue to exist, while emerging pockets of practice are developing around B2C and B2B contracts, the reality could be a growing divide, in terms of language, formats, precedents and more. That could trigger all sorts of practical and legal questions, particularly for those issues that sit at the centre of the Venn diagram of different contract types.

Final thoughts

It’s not lost on me, that there’s an irony to introducing a ‘new’ category of contracts called L2L, when really, it still reflects the dominant style of most contracts. Perhaps it’s precisely because it’s so dominant that it hasn’t been labelled as such before. Those in the majority rarely feel the need to label themselves.   

I’m also conscious that it would be easy to read this article and overestimate the pace of change. Nothing in the world of contracts moves that fast. But then again, sometimes smaller changes go unnoticed until you have a reason to look for them, or a tipping point is reached – especially when we all have our own echo chambers.

Since I had the idea, I’ve found the notion of L2L – alongside B2B and B2C – to be a helpful way to process lots of the emerging practice and issues I see around me as a contract improvement consultant. I hope it might help others too.

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[i] Directive 2011/83/EU of the European Parliament and the Council of 25 October 2011 on consumer rights [2011] Official Journal L 304/64

[ii] The Ofcom General Conditions are heavily influenced by EU legislation. In particular, the European Electronic Communications Code, officially known as: Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code.

[iii] Ofcom’s guidance for this obligation includes some really quite specific requirements about how the contract summaries should be prepared. For example, summaries provided in hard copy should be no more than a single side of A4, in portrait format and with a font size of at least 10 points (although, there are various caveats).  As stated above, the guidance – and the underlying obligation itself – are both heavily based on EU law. See, in particular: Commission Implementing Regulation (EU) 2019/2243 establishing a template for the contract summary to be used by providers of publicly available electronic communications services pursuant to Directive (EU) 2018/1972 of the European Parliament and of the Council

[iv] For an interesting example of this being done in practice, listen to this podcast episode, in which I interview Rustum Rau (Legal Director, BT) about the work his team has done to digitise contracts at BT Group.

[v] Sorry if you had to read that sentence three times!

[vi] If you’re interested, I’d encourage you to have a look at World CC’s Contract Design Pattern Library, which was created with the support of Stefania Passera and Helena Haapio.

[vii] As a lawyer based in the UK, I’ve no doubt that this section is biased towards the approach of the English courts and common law jurisdictions more generally.