Ideas
Is standardisation more valuable than open source legal content, or vice versa?
Is standardisation flying in the face of adoption?
One argument that’s been heard throughout oneNDA is that the ‘standardisation’ element of the initiative which has been highlighted over and above the ‘open source’ element of the project, is in fact hindering its value because contracts are just too hard to completely standardise and lawyers will always want freedom of authorship. We’ve heard various voices out there saying that actually, the main value of oneNDA is that it's open source - unlike most of the legal content out there.
Here's an illustration by one of the oneNDA commentators on why standardisation is problematic:
Our view is, and always has been, that even if there are 15 standards, that’s better than 20 million different templates. Also, standardisation has been extremely successful in other areas of the law (ISDA, Construction, SCCs etc) - oneNDA is the application of the same principles to a commercial law 'horizontal' rather than an industry specific 'vertical'. We think the reason this hasn't happened before (or has happened but with less success) is that there is no one association or body driving standards or better ways of working for the general commercial legal landscape - which is why a community approach was so suitable. Standards are in fact a staple in other industries like the software or hardware manufacturing world. Law, on the other hand, is severely lacking.
One of the criticisms the project has faced, is that oneNDA prohibits changes other than those that are expressly allowed in the variables section (we're calling this 'hard standardisation'). Some people have said that had they been able to add just one little thing, they'd be in a position to adopt it immediately. We have always questioned whether this is in fact true or whether we'd actually be deterring the people who agree that standardisation is the way forward and have adopted oneNDA on the basis that it's non-negotiable.
The original objective of oneNDA was to reduce negotiations and therefore time and cost expended on these documents that add little to no value by getting everyone to agree on one NDA. Our paramount objective therefore was standardisation with open source being a side-element that we thought was required in order to increase adoption. We thought a paywall would reduce the number of people that would adopt the standard and I am certain it would.
Hard standardisation vs soft standardisation
The value of hard standardisation (having a non-negotiable document) is that if we're all on the same standard, we save ourselves a load of time and money by not negotiating silly points that no one really cares about.
The barrier hard standardisation creates, is that often companies will have a genuine need to make a change because it is substantial and can have a significant impact. We've never argued that this wasn't a valid use case but what we've said is that if you change oneNDA, you can no longer call it 'oneNDA' and that having a standard that works for 80-90% of the instances in which one needs an NDA is a huge improvement to the current way we work where we use different templates for 100% of the transactions we enter into.
However, having to have one non-negotiable standard that you use 80-90% of the time and having to have a separate template that you are allowed to change to cover the other 10-20% of your use cases, creates an operational problem for legal teams who want to streamline their operations or use automation tools to facilitate their agreements, as it requires them to have at least two template NDAs on their system.
So the question is, would a document that allows both parties to start from the same starting point but allows changes (soft standardisation), ultimately add more value in the long run? Or would it erode the 'magic' of oneNDA which is that everyone knows where they stand and if they use the document, they can guarantee their deal will be concluded in minutes? We want to know your thoughts.
Measuring success
This now opens up a second thread of deep philosophical musings within the realms of the standardisation movement, which is how we measure success. The paramount objective of the initiative has always been to save time and cost negotiating by agreeing to the same template. There are a few success criteria, each of which comes with its own challenges:
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Cost and time saving: success is ultimately measured by how much cost and time oneNDA has saved for companies. But this is a really hard metric to measure without direct input from its adopters. One way to get this is to spend (significant) resource on gathering this information directly from the adopters, although in many instances, adopters don't have the data to compare the 'before and after' considering legal ops is a relatively nascent function and CLMs are only just about going mainstream.
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Adoption: adoption is another way of measuring success, but again, that relies on people telling us whether they’ve adopted it. And even if someone says they have adopted it, it's not really a measure of how much time and money they're saving as it could be that counterparties aren't accepting it, or companies have said they've adopted it without actually rolling it out.
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Use: another way is to measure how much the document is being used as well as how the document is being used, whether there are pushbacks on certain clauses that we could then use to iterate on the document and make it better. However, this option requires tech and obliging everyone to use our tech to facilitate oneNDA would itself reduce use. We wanted this document to be tech agnostic so anyone could use it and the CLMs of the world could also host it without concern in order to increase adoption. We thought about releasing oneNDA as an API that CLMs call when a user wishes to send it out but from our research, we've found that many CLMs are not geared up for this.
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Downloads: finally, the loosest way of measuring success is number of downloads. However, this doesn’t actually demonstrate that oneNDA has an impact - only that it’s had interest.
Conclusion: None of the above metrics are perfect. In fact, these are all very challenging and difficult problems to solve. For now, we've concluded that a mixture of adoption and downloads are the best options as these two metrics strike a balance between feasibility of gathering the data and producing a meaningful metric. Do you agree that these two KPIs are the most suitable or do you have a better idea?
I'd love to hear your thoughts on the above. If you have any ideas, please share. This is all new and we need to be open about our challenges and invite feedback if we're really going to change the way we contract, so help us find our way.
Electra
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Hi Electra! (Full disclosure: I'm one of the online commentators referred to in the OP)
Hard standardisation vs Soft standardisation: As you've already mentioned, what you are doing here (hard standardisation) is novel, and I don't think we have any real evidence of which way works better.
So it isn't surprising that there are a variety of approaches. Even within the "open source" world, with the GPL and the Elastic License: (1) Restricting someone's freedom to use free software isn't bad per se and can promote use instead, and (2) there isn't a settled approach on how to do "open source".
If it were up to me personally, I think there is "magic" in the oneNDA name, and much of that would be lost if changes were allowed willy nilly and without the involvement of yourself and your community.
Measuring success: I think adoption and use are worthwhile and sensible KPIs. I wanted to add one more which I hope you'd consider seriously -- user happiness. I think it's a tall order to convince everyone to use oneNDA, so for the people who are already convinced about oneNDA, I hope you can continue to keep us engaged and excited about the project.
The bottom line: Thanks for making oneNDA available for the rest of us!
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Ang Hou Fu thank you so much for your comments, I very much appreciate you taking the time to share your thoughts. Super helpful and thought provoking stuff!
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Hi Electra, nice post and good aim here i.e. to measure the impact of standardisation.
I believe Downloads and Adoption may be the easiest ways to measure the impact of standardisation but eventually usage and therefore the impact of it in terms of cost savings would be best. There are a couple of startups out there who could help gather some usage data I think.-
Hans Paul Pizzinini thanks for this. Any suggestions on who can help with data gathering would be very much appreciated.
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I had high hopes about oneNDA initially. I got buy-in from management, trained our team, and created some internal and external documentation to help with adoption. However:
- We now have to make changes (e.g., in the DocuSign template) to adapt to version 2;
- Most of the links used in our documentation no longer work after the migration to Claustack;
- We have yet to convince a single counterparty to use oneNDA; and
- Without counterparty buy-in, oneNDA just becomes a distraction and ends up taking more time than if we had just started with one party's form and gone through the typical redlining process.
At this point I have to conclude that oneNDA (or maybe any "hard" standard) is another nice experiment whose time has not yet come. Given the lack of success we've had, I don't see the value in spending time to fix our oneNDA documentation. I really hate to say this, because I do think the concept has great value, but I don't yet see enough lawyers who are willing to give up a degree of control -- even when the current process is clearly inefficient and generally not adding value.
As to "soft" standardization, I suspect that effort will face similar hurdles. Not only do you still have the challenge of getting counterparties to agree to use the soft form, but you are likely not eliminating the review and negotiation step either. Without widespread adoption, it also may make the problem worse.
The problem may be that too many lawyers still think they are the smartest person in the room when it comes to something as common as a routine NDA. The answer may be in getting business people to tell their lawyers they no longer want them to waste time on something as (usually) insignificant as an NDA.
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David Munn Well, of course, the day after I posted this we did find a counterparty willing to use V2 of oneNDA and it went very smoothly.
They had initially sent us their form of one-way NDA, so I do consider this a win for standardization. -
David Munn hey, and thanks for your comments. I'd be keen to understand how you went about rolling oneNDA out to your teams and what context is provided to the third parties when you share it with them.
One of the comments we've had consistently from our adopters is that third parties are in fact very open to oneNDA and specifically, more open to our adopters' house NDAs as it's a neutral, market standard that isn't drafted in the sender's benefit. What specifically are the issues you're facing with it and what are the pushbacks you're getting?
Noted on your comments re broken links - we'll be reinstating the oneNDA website to avoid this happening in future.
Re v2, there is no need for you to adopt it if you don't want to although it does contain fixes which were reported over the course of 6 months so it is an improved version and therefore likelier to be accepted by the other side.
Great to hear about your recent success also! May that be the first of many!
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Electra Japonas I think we did a fairly robust rollout using oneNDA-provided materials and additional communications I created for people to use for different scenarios. We also did a Zoom meeting to roll it out internally. I think it's going to take some time to get people comfortable with pushing back when a potential customer says they'll send us their form of NDA. For the sales people it's just easier for them to say we'll review the other party's form, and they don't realize how much additional work that creates. I need to get them to understand that we want oneNDA to be the default. We may have to experiment with some incentives to help in adoption.
I do plan to move to v2. However, with v1 we were able to have a pre-signed version that a counterparty could download and sign. Because v2 includes a date field, I'm not sure we can have a pre-signed version, so that's another thing I need to think through.
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