This is the second of two posts that compare template drafting with transactional drafting.
If you missed Part 1, by template drafting, I mean the process of creating the template contracts and standard terms that are used as the starting point for most transactions. Transactional drafting, on the other hand, describes the process of adapting and editing contracts for a specific deal, which will almost always rely on a template of sorts.
In Part 1, I compared the broader impact of template drafting versus transactional drafting. Here, I want to focus on how the approach to each can differ; or, perhaps more to the point, how they probably should differ even though, in practice, that remains the exception rather than the rule.
A Different Approach
Let’s begin with a quick list of some differences between template drafting and transactional drafting:
| Template Drafting | Transactional Drafting | |
| Purpose and Context | Improve Every Contract | Get the Deal Done |
| Scope | All Use Cases | Specific Deal |
| Contract Language | Optimise (clear and concise) | Good Enough (work with existing style) |
| Information Design | Optimise (consider different users and use cases) | Low Priority (use what’s there) |
| People Involved | All Key Users and Decision Makers | Individual Deal Team |
| Timeline | Planned Project | Rushed |
| Technology | Enables Use of Technology | End User of Technology (maybe) |
I won’t work through each of these. Hopefully most are self-explanatory (if fairly caricatured). Instead, I’ll tease out some of the key themes.
Taking a Step Back
By its nature, transactional drafting is focussed on the specifics of a deal and is generally done under time pressure. Template drafting, on the other hand, offers the opportunity to take a step back and think about the wider context across multiple deals. That can involve creating content to cover a range of different scenarios (and planning what those might be). But beyond the nuts and bolts, it’s also an opportunity to think more broadly about the purpose of the contract outside the immediate pressure of individual transactions.
In the midst of most transactions – particularly the drafting and negotiation phase – the purpose of the exercise tends to be seen as protecting and maximising the client’s position. But what I find interesting is how often, in practice, even that can be influenced by whatever contract terms have been adopted as the starting point for the deal (i.e. the contract template).
When I was a transactional lawyer, I seemed to regularly find myself negotiating points which, if they hadn’t been in the contract in the first place, almost certainly wouldn’t have been raised (either by me or the other party). The challenge, of course, is that once you start reading any document, it’s difficult to unsee what you’ve just seen, so every contract template creates a set of anchor points which define how discussions may play out. And sometimes, that’s just as much about the general tone of the contract as it is about the technicalities of what the words mean.
As a result, contract templates become filters that affect how people view the underlying purpose of the contracts they work on, as well as their role in negotiating them. Which isn’t a surprise when you think that a template is essentially a list of what someone, at some point, felt was important to say; and if someone else thought it was important, then it’s probably safest to assume it’s important too, right? And anyway, I’ve got to get this deal through by the end of the quarter, so now’s not the time to start rebuilding the foundations of the house that I’m trying to move in to, thanks very much.
But…
Hopefully, maybe, if and when you do get a chance to look at your contract templates, you will have a bit more space to consider the broader aspects of what they’re trying to achieve. And for me, there’s two sides to that coin.
The first is considering the purpose of the contract as whole, which is about much more than just documents and should also be about setting up clear, compliant and fair relationships.
The other is considering how the contract template itself can help achieve those wider aims – or at the very least, not get in the way of them.
As much as anything, then, it’s about approaching the job of template drafting with a different mindset to transactional drafting. And once you start doing that, it also impacts how you go about the task.
Delivering as a Project
If you’re developing a contract template, in my experience it helps to treat the job as a planned project; by which I mostly mean (in this context) taking a phased approach and not just launching into editing words. What that looks like in practice can vary, because templates vary and not all of them need to be lengthy projects or overthought. But, it typically means starting with a ‘discovery’ phase to identify use cases, capture requirements and so on. Then moving into a planning or ‘design’ phase. And only then, moving into ‘delivery’ mode to create the new content.
Just the act of thinking about it in this way – even for small jobs – helps prompt a shift into the template drafting mindset, rather than the very different way in which lawyers typically tackle transactional drafting (for good reasons).
As I’ve said, transactions are usually done under time pressure, so any drafting is relatively rushed, narrowly focussed, and is only a smaller part of a bigger project: i.e. getting the deal done. In that context, it makes sense to launch straight into the drafting because that’s essentially what the job is for the deal.
The trouble comes when lawyers, mostly through the habit of doing transactions, often want to take the same approach to template drafting – i.e. to find a starter document and get straight into adapting it.
Treating template drafting as a phased project can help break out of these habits. And the planning process itself can help ensure you give yourself enough time to achieve your aims; bearing in mind that the work of simplifying and optimising contract templates will generally need more time and thought than just another bit of transactional drafting. Which leads nicely to the next theme.
Optimising
It’ll be obvious from the table above that I think template drafting is – or should be – about optimising the template, not just creating something to tick a box. If nothing else, because it’s your opportunity to achieve all the benefits of creating a better template, as described in Part 1.
Optimising might include:
- optimising the content to make sure its relevant and fair;
- optimising the language to make it clear and concise;
- optimising the structure and (visual) design so it’s easy to use and navigate; and
- creating content in a way that supports the use of technology and your contracting process.
And, before any of that, a big part of the process should be ensuring that, at the outset, you’ve carefully considered what templates (and supporting content) you actually need, rather than being led by what you currently happen to use.
On the whole, these tasks aren’t priorities, or even a factor, at the point of doing a transaction. Of course, in an ideal world, all contract drafting should be clear and concise – and too much of it isn’t. But, once you’re preparing a contract for a deal, you generally have to work with the grain of the template you’re using and no-one is going to thank you (or pay you) to start rewriting and redesigning the whole thing.
Which leads me on to some final thoughts about why this whole idea of distinguishing between template drafting and transactional drafting can, I think, be useful to hold in mind.
What mode are you in?
I stumbled on the idea of ‘template drafting vs transactional drafting’ when preparing some training on plain language drafting for colleagues, all of whom are primarily transactional and advisory lawyers. I realised that quite a few of the points I planned to make were only really relevant if you’re writing a document from scratch; or at least, when you have much more control over how the document is ordered and formatted, as well as the general style of the language. That very much isn’t the case for most transactional drafting, where remaining consistent with whatever template you’re using is both pragmatic and appropriate (within reason)[i].
So, it dawned on me that it would be helpful to acknowledge and label these differences. For starters, it helps stop lawyers feeling too defensive or judged about having to deal with sub-optimal contract documents all the time when doing transactions. But on the flip side, it also helps land the point that (I hope), that when you do get involved in developing a template, there’s a range of additional aspects to consider – and, dare I say it, skills to develop. Which means it can be helpful – especially for lawyers – to ask themselves: what mode am I in?
And for what it’s worth, that works both ways. As someone who’s constantly trying to optimise templates these days, I’m conscious that I occasionally need to suppress that side of my brain when engaging in some more ad hoc transactional drafting, where satisficing is generally more appropriate than optimising.
A positive feedback loop
On a related note, it can also be helpful for those who create templates and standard terms to stay connected with transactional work and how they are used day-to-day. It’s one reason why I value being surrounded by colleagues engaged in contract negotiations or wrestling with some more weird and wonderful contracts. I‘m also heavily influenced by my experience as an in-house lawyer. It helps ground some of this highfalutin talk of ‘purpose’ and ‘design’ in the realities of regular contracting.
But again, that should work both ways. One of the challenges of transactional drafting is that it’s generally piecemeal and siloed from much of the rest of the contracting process (including lots of the other people involved in managing contracts). So, it helps to create and maintain a positive feedback loop[ii].
It’s not just about drafting
It’s probably obvious by now, that one of the key differences between template drafting and transactional drafting is that the process of optimising templates is actually about much more than just the drafting (in the narrow sense of what’s written on the page). And, in many ways, that’s the main reason for making the comparison at all.
For most lawyers, contract drafting is just contract drafting. And the way in which it’s taught (if at all) and learnt (on the job) is in the context of doing transactions. That means it can be difficult to shift habits and mindsets when the time comes to do the important work of optimising templates and standard terms. But hopefully, having labels to distinguish between template drafting and transactional drafting can, in some small way, help with that.
PostScript
A few quick follow-up thoughts for the really committed!
Template Drafting is Not Better. To reiterate what I said at the end of Part 1, none of this is intended to suggest that template drafting is better than transactional drafting; just that it’s helpful to acknowledge the differences between them.
Design Thinking, Contract Design and All That. I’m aware that many aspects of what I’ve labelled template drafting others might describe as design thinking or service design or contract design or legal design or [add other labels here]. I’ve deliberately not used those terms here for a few reasons. Mostly it’s because, given that the whole point has been to make a comparison with everyday transactional drafting, it’s helpful to use template drafting as a handy shorthand. Also, the audience for this is primarily lawyers who are used to using the language of ‘drafting’.
What About GenAI?! From my experience of using GenAI (mostly ChatGPT and MS CoPilot so far), my working theory is that it’s going to have a much bigger impact on transactional drafting than template drafting (in the sense of having more practical and positive use cases). This is because transactional drafting is, by its nature, focussed on doing more discrete and targeted writing tasks. So, for example: generating a specific clause for a deal; amending a clause to reflect a negotiated position; or comparing clauses against approved playbook positions. For those types of directed tasks, GenAI could do a good job of doing what a human might do, but quicker.
Template drafting, on the other hand, benefits from human experience and engagement with what should be said and why, as well as wider thinking about users, systems, design and so on. And crucially, doing that well relies on carefully creating and curating (structured) content that is grounded in purpose and not just, in effect, copied and pasted from what has gone before. Which is not to say that GenAI tools can’t be helpful in the process of template drafting – perhaps to accelerate guided editing, help identify gaps, support research and so on. But in the end, a lot of the problems with contracting stem for the rushed and fairly-unthinking regurgitation of old contracts. And the solution to those problems probably isn’t going to come from quickly outsourcing the thinking to a machine that’s dependent on regurgitating content from old contracts.
[i] When I look back at the training I received on contract drafting during my legal qualifications (which was virtually nil), much of the focus was on how important it was to make sure you followed the ‘precedent’ you were given. That included: making sure you used defined terms that were consistent; and making sure your approach to using commas matched (?!). Some of that is very important. I was always slightly baffled by the comma/no-comma thing.
[ii] I’m very conscious, by the way, that in many walks of (legal) life, those who have long been responsible for developing and maintaining ‘precedent’ contracts may be even more detached from everyday contracting. I’m thinking, for example, of the more traditional roles of professional support lawyer that exist in lots of firms; or those who maintain resources for the big legal publishers like Thomson Reuters and Lexis Nexis. That has probably had an influence on template drafting being seen over the years as: (a) a back-office task; and (b) an exercise that’s more grounded in legal correctness (where PSLs are genuine experts) than it is a broader sense of purpose.