A Manual of Style for Compliance

I’ve seen some poorly drafted compliance policies. The source of the problem is usually that they were written by lawyers, for lawyers. That is good when it comes to defending your firm against a lawsuit. But it’s a bad thing if the policy does not clearly tell the employees what they can do and what they can’t do.

This problem has been running through the legal industry for years. The Securities and Exchange Commission even published A Plain English Handbook: How to Create Clear SEC Disclosure Documents. The SEC was hoping a non-lawyer could read a corporate filing. There is still little hope of that five years later.

I don’t think it’s the fault of law schools. Like many young lawyers, I was taught in law school to avoid most of the archaic legalisms and to write in a manner closer to plain English.

But for most young lawyers, that writing style is discarded as they start practicing as a junior associates. You quickly realize that you need to write in way that pleases the partner or senior associate you are working for. You are in no position to tell the more senior lawyer that the contract would be better with less legalese and more plain English. You are responsible for one little piece of the transaction. Whatever you draft or edit needs to look and read like the rest. That means lots of legalese.

As you gain experience, you get more direct contact with clients and take the next step of writing to please the client. But clients don’t like having their forms changed. That implies that something was wrong with the old forms. Clients generally don’t want to pay for a lawyer to re-draft the form that they had already paid to have drafted years ago. They especially do not want to pay for style changes or removal of legalese.

Eventually you become senior enough that you can start making changes, but it’s generally on the fringes. You may get a bespoke agreement to draft that is not based on a precedent or form. You don’t have the free time to recreate the form documents to remove the legalese and adopt a more sensible legal writing style.

Ken Adams advocates a more sensible approach to contract drafting. I’m not sure when I became a fan of Ken’s thoughts on contract drafting. It was probably during some wasted time arguing over whether a contract performance standard should have “reasonable efforts”, “best efforts“, or “commercially reasonable best efforts”. I studied his approach and tried using some of his well-reasoned and well-researched approaches. But it was mostly at the fringes.

Now that I have left corporate law to join the world of compliance, there are still many useful aspects of his thoughts on contract drafting that apply to compliance. When he offered me a review copy of his latest, A Manual of Style for Contract Drafting, I thought it would useful to look at his style approach in the context of compliance.

There are lots of lessons in the book for compliance professionals who are tasked with drafting policies and procedures. There is the obvious lesson of not using a dollar word to do a “nickel’s worth of work.” Policies and procedures need to be clearly written and easy to understand. You want to avoid the problem that could lead to a law suit. You don;t want to have to rely on a lawyer for interpretation.

For compliance, you probably don’t need to spend much time in Chapter 8 exploring “reasonable efforts and its variants.” Here’s the spoiler: U.S. courts have overwhelmingly rejected the notion that best efforts represents a more onerous standard than reasonable efforts.

Chapter 12 is full of great lessons on syntactic ambiguity that will improve your policies. While there are a few chapters that are applicable only to contracts, the bulk of the book has lessons applicable to drafting policies and procedures.

Many lawyers will disagree with some (or many) of the approaches that Ken proposes. His substantive positions are backed up by legal research and grammar expertise. It’s hard to argue with facts

My biggest disagreement is on a style approach. I prefer more depth to my numbering scheme. Ken stops at the second level. You can see that approach in the layout of  A Manual of Style for Contract Drafting. Each paragraph is numbered. But with the flat numbering, concepts appear scattered. For example I would have preferred the MCSD enumeration scheme to be section 4.53, with each of the paragraphs discussing the scheme to be 4.53.1, 4.53.2, …, instead of 4.53, 4.54.

Even if you don’t adopt Ken’s approach you should at least learn about the substance behind the approach. You can purchase A Manual of Style for Contract Drafting from the American Bar Association.