Contracts and Fast Food

I love a good home cooked meal. Fresh ingredients and loosely followed recipes mean that no two meals are ever identical. Flavors, textures and intensities always vary. Fast food is the opposite - any Big Mac that you order anywhere in the world will be virtually identical. You always know exactly what you're going to get. And Hilton (Conrad rather than his great-granddaughter Paris) applied the same principal to his chain of hotels.

What's this got to do with contracts? Contracts should be more like fast food than home cooking. You're striving for consistency, quality and repeatability - uncontrolled variation from agreement to agreement is undesirable as it inevitably exposes risk.

These ideas are articulated in George Ritzer's book, "The McDonaldization of Society." Ritzer's premise is that society is becoming more and more rationalized. The four essential components of McDonaldization apply equally to what we strive to achieve with our contracts:

Efficiency - the optimal way to get the job done. For fast food chains this is getting customers from hungry to feeling satisfied as rapidly as possible and then moving them on. For contracts, efficiency means minimizing draft, negotiation and approval times.

Quantification - knowing how long things take and how much they cost. It's hard to improve your processes without something measurable. Fast food chains know exactly how long every step in their processes takes - usually to the second. Every step in the contract life-cycle needs to be understood and quantified in order to improve and rate its efficiency.

Control - having strong, well established processes and using technology over manual labor wherever and whenever possible. There is no place for originality or creativity.

Predictability - achieving the same quality product every single time. Automation facilitates predictability both for fast food and contract production.

So how do your contracts compare to fast food? Are your agreements always consistent and up to date or are they more like a homemade souffle - sometimes amazing but sometimes a flop?

This post was authored by Exari CTO, Justin Lipton.

MS Word Patent Infringement: Is Your Document Assembly Investment At Risk?

We've been getting asked one question with increasing regularity over the past couple of months. How is Exari affected by Microsoft Word's patent infringement?

SHORT ANSWER
We're not affected at all.

Exari is platform-independent and did not use Word's 'Custom XML' feature. By design, our architecture is 'Word-compatible' but not 'Word-dependent'. This enables us to simplify complex document logic and provide users with visibility into their contracts in ways that Word-based systems simply can't.

LONG ANSWER
On December 22 2009 a US federal appeals court upheld a finding that Microsoft Word's 'Custom XML' feature - described in quasi-layman's terms here - infringed the patent of a Canadian software company. As a result, Microsoft was required to pay US$290 million in damages and remove Custom XML from new copies of Word sold in the US from January 11 2010 onwards.

For the vast majority of Word users the patent infringement is a non-issue. Microsoft immediately removed what they describe as a "little used feature" from the offending products. XML guru, Tim Bray, provides a good explanation of why most people will be completely unaffected.

But...
One area that has been deeply affected is document assembly. Microsystems, developer of the D3 document assembly system, has already had to pull it's product from the market:

"Microsystems announced it will discontinue development of D3 [its document assembly tool] and Legal TemplatesPlus as a result of Microsoft's decision to remove Custom XML code from Office...

Microsystems evaluated various alternatives including redeveloping both products, but determined a feature equivalency could not be attained with the technologies and methodologies available today and the development work would likely result in an overall inferior solution for customers."

Different Word-based document assembly systems will be affected in different ways. (Systems that don't rely on Word for automating templates are unaffected by the patent infringement). As the D3 situation illustrates, systems that embraced Custom XML are now effectively unusable.

The question is where this leaves other Word-based systems. Those that rely exclusively on bookmarks, field codes, macros, etc. should be OK. For those claiming XML support it's unclear. (Hopefully users of those systems are covered by well drafted IP indemnities.)

However, there's a bigger problem for the Word-dependent systems that don't rely on Word's Custom XML feature. As Microsystems explains in their statement -- Using Word-based approaches that don't leverage Custom XML will "likely result in an overall inferior solution for customers."

Conclusion
When it comes to selecting a document assembly system, you should go for one that's Word-compatible but not Word-dependent. Exari's platform-independent approach means it's business as usual for our customers. For everyone else, be sure to contact your document assembly vendor.

Anatomy of a Document Assembly Blog

A colleague recently shared this wordle of The Exari Blog and it got me thinking. As the de facto editor of the blog, it contained information that I found very interesting. For one thing, it reaffirmed to me that we are sticking to the issues we think most interest our readers – please correct me if I’m wrong.

"Word Documents" and "numbering" jump off the page, and since these are the underpinnings of legal document assembly efforts, were not surprising to see. Prominent themes included document automation, contracts, risk, and other ideas that you would also expect from a document assembly blog. But there were some other interesting insights. For example, why is Martin the only author to appear, when in fact Andrew is the most prolific?

Clearly we are writing a lot about Microsoft Word, and those posts tend to be well read, especially The "Word Styling" Ward of the Asylum and The Perils of MS Word. Then there are the more provocative posts which tend to be written by Jamie. We know people enjoy them, but they are also particularly well read since like Death by Laptop and How to Waste $34 Billion in Homeland Security they are referenced in Wikipedia.

So getting back to Martin. Why was he the only author to appear? Perhaps because his posts are the sexiest? Please tell us which type of post you most like to see here. We’d love your suggestions for topics, or if you prefer to write it yourself, invite you to guest author a post. You can share your ideas in the comments below, or contact me here. Thanks for reading. And thanks to Jeremy for the Wordle!

Numbers Don't Lie

THE RESULTS
The 2009 results of the AM LAW 100 describes a scenario of double digit revenue decreases for the majority of firms. The good news is that revenue per partner and profit per partner did not fall at the same precipitous rate. The bad news is that these measures were largely managed primarily through headcount reduction, compensation cuts, and fewer lawyers achieving partnership status. Adding to this bad news is the emergence of the alternative fee revenue model, the pressure on law departments to cut their external legal spend, and a general downturn in the economy.

THE BOOM BUST CYCLE
Law firms can choose to try to manage the boom-bust cycle by their traditional means; controlling headcount and compensation. Yet managing human capital is not the same as adding more machine capacity to an assembly line or more memory capacity in a computer; changes in headcount create disruption in the form of lack of continuity with clients and colleagues, not to mention training and cultural issues.

THE LEGAL ASSEMBLY LINE
A core process in delivering legal services is assembling data from various sources, making sense of it, and codifying it into a finished product such as a contract or some other legal document. Raw data can flow from case management systems, knowledge management systems, other inside and outside sources, and from the human capital within a firm. The finished product often then flows to various approvers and ultimately into a repository or case management system. Thus the “assembly line” for delivering legal services includes people, systems, and raw materials which can all benefit from the use of technology.

THE SOLUTION
Top performing companies have adopted technology as a permanent way to manage costs, create efficiency, and improve speed. For law firms, document assembly technology enables the construction of a contract or document to move from a purely manual environment to an automated environment and, much like the assembly line did for manufacturing, document assembly enables the production of more finished contracts per unit of labor and improved quality.

BENEFITS TO LAW FIRM EMPLOYEES
Document assembly technology enables current employees to take on more work in a more intelligent way, creating more time to work on higher value legal issues. This heightens employee morale and creates a more stable and predictive cost structure. Also, the use of technology contributes to a firm’s ability to stay competitive, to improve the profitability of various legal business processes, or perhaps even dominate various areas of the law; especially where the production of high volumes of predictable yet complex documents is required.

In these uncertain times, using technology will help law firms mitigate the boom/bust hiring cycles and provide permanent efficiency, quality, and employee morale boosting benefits. Do you agree?

This post was authored by Lowell Moritz, Exari VP of Account Management.