Building and Maintaining a Precedents Collection – Part 1: Getting Started

Building and maintaining a precedents collection presents many challenges but the benefits of success are multiple. In my posting from last June, the architect of the Gowlings precedent collection, Graeme Coffin, outlined what the process is at his firm. But undertaking this initiative is one of the biggest challenges that any practitioner, whether practising solo or in a firm or working in-house, faces. I therefore propose to treat this topic in a series of postings so as to discuss the issues in some depth and offer some suggestions.

Benefits. The benefits of creating a good quality, comprehensive precedents collection are self-evident to most lawyers, the main ones being improved knowledge management, better client service, and better quality content.

Knowledge management. Keeping and reusing knowledge gained from previous, similar matters is, of course, one of the key benefits of such an initiative. If you have not yet taken any systematized knowledge management initiative in your practice, this would be an ideal place to start. If you have already started down this road, you will want to ensure that this initiative dovetails appropriately with your other projects.

Better client service. Among other things, having access to good quality precedents provides faster turnaround by

• enabling quicker access to proper starting document,
• avoiding the need to spend time eliminating client-specific details and clauses from similar previous document before starting work, and
• providing an improved ability to delegate creation of first draft to more junior colleague (if applicable).

Better quality content. As the quality of your precedent collection rises, as it necessarily will when you adopt a focused, informed approach to precedents, the quality of the every agreement that you produce for your clients will rise as well. Simply having a checklist of the key elements of a particular agreement will, for example, ensure that you will have reviewed and reflected on each of those substantive elements in preparing your agreement.

Better training for younger lawyers. Even if you are not able to spend the time to properly annotate your precedents, younger lawyers on your team will benefit from reviewing good quality precedents rather than reviewing matter-specific agreements and trying to essentially retrofit their analysis by trying to determine which clauses might be matter-specific and which ones might be standard, essential clauses.

Challenges. The challenges to simply creating such a collection (to say nothing of the even greater challenge of maintaining it, once created) are many. The following are the three main challenges.

Devoting the necessary time. The development of a single precedent, even by one person, let alone by committee, is an extremely time-consuming activity. This is usually the greatest stumbling block to such an initiative, namely finding the (non-billable) time that one or more lawyers can devote to preparing an appropriate first draft.

The time spent on drafting is in most cases greater than necessary because of a failure to have first established a proper project management plan. In my experience, few of these initiatives are conducted in accordance with project management principles, and suffer accordingly.

Ensuring the substance covers all necessary topics. It is crucial that each precedent contains all the substantive clauses that such an agreement must contain, contains all appropriate alternative clauses, and does not include any unnecessary clauses.

This means that it must be prepared, or at a minimum, reviewed and approved, by a subject matter expert (SME) in the particular substantive area of law. The particular SME may, however, not have the necessary time to devote to a proper review, and so a draft prepared by other colleagues may well languish until the SME is finally able to provide comments.

The issue becomes more complicated if two or more SMEs need to review the draft for approval, since they will sometimes (often?) have conflicting ideas as to what substance should be included and how particular clauses should be worded.

Gaining consensus as to substance. If your colleagues prepare or review similar documents, it is important, in order to maximize the benefits, to get their buy-in to ensure that, once these precedents that have been developed, they will use them. But, as noted in the previous paragraphs, different lawyers often have varying ways of approaching and presenting the same content, and there is a natural tendency to prefer what one knows best. Each user, therefore, will tend to prefer the form and content of his or her own personal preferences. Overcoming this tendency is a necessary but immensely difficult task.

Ensuring “horizontal” consistency. It is crucial that your agreements have what I would term “horizontal” consistency. If SMEs in five different practice areas prepare precedents in each of their specialties, you will likely find that common clauses are drafted differently. You may well find, for example, that the Governing law clause appears in five different versions. Ensuring this consistency is very time-consuming but pays huge dividends over time.

What you will need is a general editor, who is charged with the responsibility of ensuring this “horizontal” consistency. He or she will make the final determination as to the “approved” wording of, for example, the Governing law clause. The advantage of this approach is that, once you have settled on the standard wording of your various boilerplate clauses, the task of those drafting subsequent agreements will be easier, as they will already have the framework in place and will need to focus only on the substantive clauses that are unique to their particular agreement.

Threshold issues. To create a successful precedent generation initiative, it is necessary at the outset to address certain fundamental issues, the first being, what do you want to do? What are your goals?

It may seem self-evident, but different people involved may well have different objectives. This is a project, and hence, as noted above, you will need to adopt a proper project management approach to ensure that all team members and stakeholders understand, and buy into, the clearly defined goals that have been established.

Where to start? The next key question is, where do you start? The answer will of course reflect your particular needs. The recommended best practice is to choose an agreement that is used regularly but is not too lengthy. Many precedent initiatives have foundered simply because the lawyers started with too complex a document. (A 100+ page asset purchase agreement is not the place to start!)

The fewer “moving parts” there are in your first document, the quicker the first draft can be generated. In my experience, the NDA is a logical starting point, as it frequently used by lawyers in many, if not most, of the different areas of the firm or law department.

Need for consultation. It is important that the first document generated from your initiative gets buy-in from your colleagues. You cannot afford to produce a less than first-rate document for your first publication. Lawyers are notoriously critical and, justly or not, will conclude that if the first document does not meet their quality standards, then none of the later ones will either, and your initiative will be dead before it has even really started.

You must ensure, therefore, you consult with others in the preparation of your first agreement, to help ensure buy-in.

In my next posting, I will discuss the contract maturity model, as a way of providing a framework for approaching your precedent initiative. I welcome any comments you may have.