13 May 2019

Kill all the legalese: How to achieve plain language legal contracts

Published on 13 May 2019

Words are the weapons of choice for lawyers. Legal documents are the most tangible form of a lawyer’s value for clients. Why then, are lawyers so wedded to legalese? Does ambiguous language genuinely allow for one party to gain advantage over another? Or does it simply make the obligations of both parties unclear?

Perhaps size is perception – the longer and more complex the document, the more valuable it may seem to a client. Insights explores the growing push for plain language drafting across government and legal services, and how committing to killing legalese could help lawyers provide a more valuable service.

The Case for Clarity

Plain language drafting is nothing new. President Nixon called for “layman’s terms” to be used in the Federal Register as early as 1972. Successive presidents made similar orders, with President Obama most recently signing the Plain Writing Act to promote “clear government communication that the public can understand and use.” In 2016, the Australian Office of Parliamentary Counsel published a Plain English Manual “encouraging the use of plain language in legislation.”

For the law to be followed, its meaning must be immediately apparent or easily discerned. This is as true in private law dealings as it is with public law enactments. There is a strong case for ending deliberately obfuscating legalese, not least because it undoes the adversarial nature of legal drafting, and is more likely to avoid future disputes.

Getting Agreements Signed, Not Revised

“A contract should not take countless hours to negotiate,” Shawn Burton, general counsel of GE Aviation’s Business & General Aviation and Integrated Systems told Harvard Business Review. “Business leaders should not have to call an attorney to interpret an agreement that they are expected to administer. We should live in a world where contracts are written in accessible language – where potential business partners can sit down over a short lunch without their lawyers and read, truly understand, and feel comfortable signing a contract. A world where disputes caused by ambiguity disappear.”

To realise this vision, Shawn proposed an ambitious undertaking – to create a contract that a high schooler could understand with no further context or explanation.

An experiment with GE’s General Counsel

When Shawn assumed leadership of GE Aviation’s digital-services unit in 2013, he was presented with an immediate problem. GE Aviation now comprised of three formerly separate digital-services businesses, each selling similar services, while using vastly different and highly complex legal contracts.

“The complexity of the contracts was making negotiations drag on for months, frustrating prospective customers,” explained Shawn. “Rather than pursuing new opportunities, capturing new business, and delivering world-class digital solutions, the sales team was spending most of its time debating archaic contract language.”

It was a significant undertaking, involving seven contracts, with an average length of 25 pages - the longest was 54 pages. Recitals were lengthy and included extensive definitions – one contract featured 33 definitions packed into two pages. Legalese was simply getting in the way of doing business.

The solution was simple: one plain English contract a high schooler could understand, which still protected GE’s interests.

Unlearning how to write like a lawyer

A plain-language team was founded and sent to a multi-day offsite. Sales, engineering, product support and legal team members were included. The team had two goals: (1) acquire a thorough understanding of services provided, and (2) identify their operational risks. Too often, legal teams drafted defensive clauses without ever stopping to consult those involved in creating, selling or supporting the product.

“The off-site was a success,” said Shawn. “Next the legal team started drawing up the contract, beginning from scratch. No templates. No ‘sample’ clauses. No use of or reference to the existing contracts. We started simply typing on a blank sheet of paper, focusing only on the covered services and the risks we’d identified.”

The process took a month. Draft one was five pages and didn’t contain a single ‘heretofore’ or ‘forthwith.’ Gone were the recitals, definitions or jargon. Active voice and short, clear sentences ruled throughout.

This was then vetted by an external firm, which challenged GE’s in-house legal team to refine the contract while remaining committed to plain language.

Contracts that resolve disputes sooner

“Customers love it,” said Shawn. “The head of sales at the time charactised it as a ‘true paradigm shift in contracts and language.’”

Australian lawyer Nick Brodribb, legal counsel at Qantas Airways, commented: “Australian lawyers have for a long time been dealing with turgid and redundant language crammed into U.S. legal contracts. Plain English should save time on the front end of a transaction, which allows the business to get into the project quickly, to manage it more easily, and potentially to resolve disputes sooner.”

Keen to adopt plain language drafting? Consider the right metrics for success. For Shawn, this was all about speed.

“There is a real allure to a one-page contract or a contract that has fewer than x number of words,” said Shawn. “Page and word counts should drop, but speed should be the priority. If negotiation time stays the same or goes up, nobody will care how long the agreement is. A negotiation-time metric forces you to focus on what really matters: understandability.”