Automated contracts, free legal documents and the singularity

I wrote about the coming legal practice singularity recently. Legal practice is changing rapidly and the prospect of a sufficiently advanced artificial intelligence to start taking over many legal research and similar tasks is fascinating. Unfortunately for many lawyers the wait may not be quite as long as it may take for such artificial intelligence to arrive on the scene.

Lawyers are accustomed to services that offer standard contracts for reduced prices. Some retailers and bookstores have been selling common agreements like leases and powers of attorney for quite some time now and there are a number of online options too, including Law Unlocked which was pointed out to me today. The next step is a site which promises a DIY solution which should scare lawyers who rely on legal documents themselves for their fee income.

Desktop Lawyer offers a self-service option to customers whereby they can have fairly complex agreements like shareholders agreements prepared for them by answering a series of questions. The process is apparently so dynamic that you actually see the document take shape as you work through the questions. The end result is a document that goes beyond the current "one size fits all" model because the service's users will be able to download a fairly customised agreement that better suits their specific needs. This is unlikely to be the end of the road for the technology and we will likely see more and more advanced solutions that will replace lawyers whose focus is document production as an end in itself. In other words, the market for "search and replace" precedents will give way to these sorts of smarter and more cost effective solutions.

This likely future touches on my thoughts about the current legal services model and the very real need for lawyers to rethink the value proposition in their work. The days of value being based on time or documents are just about over and lawyers who can't adapt will struggle to survive. The value in legal services is in lawyers' knowledge of the law and how to use the law to develop appropriate and effective legal frameworks for clients. The documents reflecting or embodying those frameworks are worth about as much as the paper they are printed on.

In keeping with this emerging reality, I am rethinking what my clients will be charged for going forward. We will start removing documents as line items in our invoices and effectively treat them as free. Documents we produce for our clients will be released to those clients under a Creative Commons license to enable clients to make more flexible use of those documents and I am working on a service for clients which will effectively release fairly standard documents to participating clients as a value add at no charge for the documents themselves. I am still working on the parameters of this pseudo-open source approach to legal practice and will ensure that important considerations like client confidentiality and custom legal frameworks are adequately protected but the days of charging for relatively standard legal documents are coming to an end.

Website terms and conditions are surprisingly complex

Website terms and conditions are pretty tough to do properly. They are on just about every website you come across on the Web and are so prevalent that it is easy to take them for granted and also assume that they are all pretty much the same. Often how a website terms and conditions (I'll refer to them as "website terms" for the rest of this post) is drafted is a matter of personal style but a lot of thought and planning goes into a well drafted website terms.

Lawyers have different approaches to website terms. Some will look for seemingly complete website terms on the Web or in precedent libraries, change the names and details and push it out to their clients. Other lawyers will spend more time on a website terms and prepare a set of website terms that are at least prepared with the client's business in mind. Yet another group of lawyers will take a more involved approach which may include:

• taking more detailed instructions from the client about the client's business and what the website is intended to do;
• carefully consider the risks that could arise;
• carefully consider the various pieces of legislation and third party terms and conditions the website terms will have to comply with or take into account; and
• prepare website terms which establish a sound legal framework for the website and its proposed activities.

Leaving aside website terms' content, the way website terms are presented is also fairly important. Paper-based legal documents are frequently formatted using multi-level paragraph numbering because those paragraph numbers are the most convenient referencing system on paper. Clauses often refer to each other and lawyers need a convenient way to refer to parts of the document. Its just easier to refer to "clause 3.4.2" than it is to refer to "the clause that sets out the exception to the duration clause".

When it comes to website terms and conditions, the multi-level numbering convention still works (although it is probably a pain for developers to convert these documents into a website friendly format) but the result is often a fairly intimidating block of text. Three good examples of this sort of website terms are the Zappon, Times Live and Facebook website terms:

Zappon:


Times Live:


Facebook:

Another approach to website terms is to dispense with multi-level paragraph numbering. An example of this approach is the Foursquare website terms:

Both of these approaches have merit. A couple formatting issues affect readability (usability experts can probably cite a dozen more): the effect of multi-level numbering on the document's apparent density, line spacing and the font used. In the Zappon website terms the multi-level numbering and line spacing make the text look pretty dense and not terribly enticing. On the other hand, the Times Live website terms (very possibly prepared by the same legal team) also uses multi-level numbering and is better spaced. The Times Live website terms are far easier to read than the Zappon website terms. The Facebook terms sit in between the Times Live and Zappon website terms.

On the other hand, the Foursquare terms dispense with multi-level numbering in favour of a simpler document structure (I tend to prefer this approach myself). The challenge with this approach is the loss of an easy paragraph referencing system with multi-level numbering presents. The solution is to use hyperlinks instead, the Web's referencing system. Although the basic layout makes the Foursquare website terms easier to read, the font detracts from that. The Zappon terms have a similar issue. This may be a personal preference but I find non-serif fonts to be much more readable that serif fonts when it comes to website terms. The Facebook and Times Live website terms use non-serif fonts. I have spent a little time reading about fonts in legal documents and while I just barely scratched the surface, it is a pretty interesting topic.

So why all the talk about readability? Website terms are contracts between website visitors and the website proprietor. Just as the Consumer Protection Act requires that contracts be drafted in plain language to make them more accessible and intelligible, formatting website terms to make them more readable achieves a similar objective. Website terms, when they deal with all the legal issues they need to deal with, are lengthy documents but they are important documents. If a visitor is immediately put off by the website terms' formatting, the visitor will be that much less inclined to read the document which will contain terms he or should really should read. The end result is that the website terms will not do what they are supposed to do.

This discussion may seem pretty abstract but it becomes pretty important in the context of consumer protection imperatives like the plain language requirement. It is also important from a contractual perspective. A contract should be clear and readable if it is to adequately support the agreement between the parties to it. Everyone should understand their rights and obligations and a dense body of text with numbered paragraphs renders the document virtually inaccessible.

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Image credit: Manuscript by Muffet, licensed CC BY 2.0

Plain language complexities in contracts

As you probably know by now, the Consumer Protection Act mandates contracts written in plain language. That means al that legal jargon few people understand should be removed and replaced with more straightforward language that the average person can understand, not just multi-lingual lawyers with a strong grasp of conversational Latin, Old English and Dutch. While we can all appreciate the value of plan language in a document as complex as a contract, actually writing a contract in plain language and still dealing with all the issues you need to deal with in a contract isn't always that easy.

One of my clients asked me to take a look at a set of clauses in an agreement I prepared for the client a little while ago. The clauses are designed to limit my client's liability and were the latest iteration of the liability limitation clauses I used in my contracts (lawyers frequently have precedent banks where they store old precedents and examples of contracts and documents - more often than not any documents your lawyer prepares for you is based on precedents in your lawyer's precedent bank). Like many lawyers, I improve clauses I use in contracts almost on an ongoing basis. Each agreement I prepare for a client typically represents the latest wording and structure that I am using. The clause in question looked a little like this:

1. LIABILITY
1. Disclaimers and limitation of liability
1. The Customer agrees that Acme is unable to, and is not required to, guarantee a particular result or set of results.
2. The Customer agrees that Acme shall not be liable in respect of any loss or damage caused by or arising from the unavailability of, any interruption to the Services.
3. The Customer further agrees that –
1. under no circumstances whatsoever, including as a result of Acme’s negligent acts or omissions or those of its servants, agents or contractors or other persons for whom in law Acme may be liable, shall Acme or its servants, agents or contractors or other persons for whom in law Acme may be liable (in whose favour this constitutes a stipulatio alteri or stipulation for another), be liable for any direct, indirect, extrinsic, special, penal, punitive, exemplary or consequential loss, damage or damages of any kind whatsoever or howsoever caused (whether arising under contract, delict or otherwise or as a violation of any Party’s intellectual property rights and whether the loss was actually foreseen or reasonably foreseeable), including but not limited to any loss of profits, loss of revenue, loss of operation time, corruption or loss of information or data and/or loss of contracts sustained by the Customer, the Customer’s directors, servants, dealers or Customers, resulting from the performance or availability of the Services.
2. no claims or legal action arising out of, or related to, the Services or this Agreement may be brought by the Customer more than 1 year after the cause of action relating to such claim or legal action arose.
2. Indemnity
1. The Customer hereby indemnifies Acme and its officers, directors, employees, servants, agents or contractors or other persons for whom in law Acme may be liable (in whose favour this constitutes a stipulatio alteri or stipulation for another) from any loss, damage, damages, liability, claim, expenses, costs orders or demand due to or arising out of or for:
1. any violation of any Party’s intellectual property rights including, but not limited to, copyright, trade mark and/or patents; and/or
2. breach of privacy as a result of the collection and/or processing of personal information (as defined in the Promotion of Access to Information Act, No. 2 of 2000) by the Customer, its directors, employees, agents, suppliers, contractors or service providers; and/or
3. defamation or slander; and/or
4. any loss or damage arising out of or in connection with an act or omission of the Customer in connection with the Services or facilities provided by Acme to the Customer.

These clauses cover quite a bit of ground and are intended to curtail Acme's liability to the point where any potential liability for harm suffered by something other than gross negligence (you can't contract your way out of liability for gross negligence) or wilful misconduct should be pretty limited. The immediate problem with the clause is that it really isn't very easy for the average person to understand on a first or second reading and that prejudices usability quite a bit. Adding to this, the Consumer Protection Act requires companies dealing with consumers to highlight these sorts of clauses and when you factor in the plain language requirements, these clauses need to be intelligible to the average person. Unfortunately it isn't, despite it being a fairly good attempt at achieving their objective.

I took a look at this clause yesterday afternoon and thought there had to be a better way to achieve the clauses' objective of limiting my client's liability while keeping the clauses written in as plain language as is possible. When it comes to plain language, there is always going to be a tension between using efficient and effective language and writing the clauses as simply as is possible to make the clauses intelligible to the average person. That is not easy at all. One reason is that many of the terms lawyers use are almost shorthand for fairly complex concepts with a lot of legal development behind them. Ditching the terminology would require us to explain the concepts in sufficient detail to retain the effect of the clause and not detract from that effect by diluting the language with terminology that is too simplistic. I suppose its analogous to watering down the jet fuel to a point where people can handle it safely but at the risk of negating its value as propellant in the jet.

So I sat down with this complicated set of clauses and reworked them over the course of a couple hours. The process involved looking closely at what each element of the clauses was intended to achieve, the legal implications of those clauses and considering whether there was a way to achieve the same effect without blurred vision and headaches. This is one of the versions we (I collaborated with one of my colleagues) came up with:


1. LIABILITY
1. Disclaimers and limitation of liability
1. The Customer agrees that Acme is unable to, and is not required to, guarantee a particular result or set of results pursuant to the provisions of this Agreement.
2. The Customer agrees that neither Acme or Acme's Associates shall be liable to the Customer in respect of any loss, damage or damages, howsoever caused and howsoever arising, as a result of anything done by Acme pursuant to the provisions of, or in furtherance of this Agreement.
3. In addition to Clause 1.1.2, no action or proceedings arising out of, or related to, the Services and/or this Agreement may be instituted against Acme by the Customer more than 1 year after the cause of action relating to such claim or legal action arose.
2. Indemnity
1. The Customer hereby indemnifies Acme and Acme's Associates from and against any loss, damage, liability, claim, expense, costs orders or demands which may be suffered by or may arise as a result of anything done by the Customer, save as a result of Acme's unlawful conduct, wilful misconduct and/or gross negligence.

The difference is pretty stark although the question now becomes whether this revision has the desired effect: protecting my client and limiting its potential liability as much as the original clause while improving the clause's legibility and intelligibility.

I think the revision does achieve what I set out to achieve but we lawyers can't afford to rest on our upholstery. The law changes pretty quickly and so do drafting conventions. We have to keep iterating with our contract language or we risk falling foul of legal requirements like plain language requirements or opening holes in our clauses' contractual protections. This sort of work is ongoing and I think it also reveals how seemingly plain language requirements are not always easily met.

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Photo credit: Contract by nyello8, licensed CC BY 2.0