Weagree accepted nomination for Innovating Justice

Weagree has gratefully accepted its Innovating Justice Award nomination as an outstanding example of innovation in the legal sector.

We have accepted the nomination and provided Innovating Justice, the organisation responsible for the grant, with the following answers to their questionnaire.

If you’re interested, you can download the PDF of the questionnaire.

Questionnaire related to the nomination for the

     Innovating Justice Award 2011

of

     Weagree (Accelerated contract drafting)

under the subtitle

Weagree offers a contract assembly software solution combined with contract drafting services.

Weagree’s solution or innovation can be summarised as follows:

Weagree’s contract assembly software application (the “Weagree Wizard”) accelerates the creation of contracts. The Weagree Wizard enables a fully automated creation of tailor-made agreements and other documents (based on your own or Weagree’s models and templates) by processing an extremely user-friendly Q&A. The powerful Q&A-function enables a user to assemble simple or complex contracts of high quality expeditiously, in the own house style.
The Weagree Wizard also contains a knowledge management functionality. This feature enables a legal counsel to maintain individual contract clauses, for exceptional cases not covered in the regular template or for inserting in a first draft contract received from the other party.

Drafting an agreement is one thing; writing crystal clear, accurate, consistent and without ambiguities is something else. Because Weagree has broad contract drafting experience of the highest level, the proposition of Weagree is not merely a software application. Weagree’s drafting and practical experience lifts the quality level provided by legal counsel to a breakthrough service level and ensures the effectiveness of the Weagree Wizard.

Weagree’s proposition:
(a)   accelerates the time required to draft a tailor-made contract;
(b)   reduces a legal counsel’s response time;
(c)   dramatically increases productivity;
(d)   reduces the transaction cycle;
(e)   anchors individual counsel’s know how (model contract clauses) in the organization;
(f)    improves compliance with corporate contracting requirements;
(g)   minimizes the risk of errors in first draft contracts; and
(h)   catalyses a legal department’s contract upgrading efforts.

1.             Can you briefly describe the innovation, the problem it tries to solve and why it is necessary?

The innovation is twofold:
(a)   a contract assembly software application (the “Weagree Wizard”) for creating simple or the most complex agreements;
(b)   an effective process-design for an efficient creation of (your) model contracts, supported by first class contract drafting services according to contract drafting conventions (reflected in an online book on all aspects of contract drafting).

2.             What makes your innovation unique?

Weagree’s solution combines a highly innovative software solution with an intimate knowledge of the legal contracting practice (based on experience in premier European law firms).

Not merely legal support service
The innovation must be distinguished from legal support services:
(a)   Weagree has broad experience in the day-to-day practice of multinational enterprises: this requires an essentially different approach as regards ordinary-course-of-business contracts, as opposed to agreements drafted and negotiated by premier law firms (in which Weagree’s founder has also worked);
(b)   Weagree developed a framework for drafting and maintaining model contracts. In practice, it appears that Weagree’s project-oriented approach has not been adopted in law firms or enterprises. This approach, as simple as it is, aims at putting first things first (working towards quick results) and at establishing a robust framework ascertaining consistency amongst all of a company’s model contracts. The framework consists of contract drafting conventions both on an abstract level (on two A4 pages) and is elaborated in the online reference guide (of 340 pages).
Since 1993, Willem Wiggers (founder of Weagree) is an active member of the Groupe de travail contrats internationaux (GTCI), an international working group on international contracts, composed of partners of European law firms, senior legal counsel of multinationals and law school professors, for discussing the law and the reality of selected types of contract clauses.

Not merely a software application
The innovation must be distinguished from other ‘contract creation’ software applications:
(i)    it incorporates all particularities as applied in the legal practice of premier law firms (the level of detail in the quality of generated contracts is without precedents);
(ii)   the Weagree Wizard is flexible (can be adapted to the personal desires of each user);
(iii)   the application uses state-of-the-art technology (it is web-based, ready for cloud computing) and communicates with software applications commonly used in large enterprizes and law firms (e.g. document management system, workflow, CRM).

Weagree’s experience in legal practice must not be underestimated in view of the implementation phase: an important success factor for implementing and using the Weagree Wizard is the quality of the Q&A that is built in together with a contract. An effective setup of the Q&A of a contract template is largely driven by the underlying business case and avoids overly ‘legalistic’ questions.

3.             What triggered the development of the innovation?

The Weagree Wizard has been developed after a brainstorm session between the head of the legal department of a major Dutch multinational (Royal DSM) and Willem Wiggers (founder of Weagree), who wondered how a worldwide upgrade of the ordinary course of business contracts could be done effectively, in a sustainable, yet efficient manner.

The presumed first step would be the (project-group-steered) process of establishing the model contract wording; the second and final step would be to insert the contracts into a centrally managed, user-friendly and intelligent database. This database should prevent that ‘no-one’ is willing to further upgrade or amend the models in the future or that everyone does so for him or herself (e.g. because the upgrading process is time-consuming and burdensome, because the then-current standard is widespread in the personal folders of the organisation and practically impossible to replace). In order to be successful, the database (now the Weagree Wizard) should be faster than ordinary copy-pasting of a contract, and be user-friendly (the application’s ‘interaction design’ had to be attractive and encouraging for technology-averse lawyers).
Reality showed that the first step (i.e. establishing a set of model contracts) should preferably be preceded by the second step (i.e. first implement the Weagree Wizard and then be encouraged to upgrade the model contracts).

4.             Which persons and organisations were involved in the development and what role did they play?

The Weagree Wizard is a result of the input of many people. Its functionalities have been developed by Weagree in collaboration with a software development company. The interaction design of the Weagree Wizard (i.e. the steps towards creating a contract and the components on the application’s webpages) has been developed by Weagree in collaboration with its communication and design firm and a group of test users. The business proposition was developed with a strategic sourcing director employed in the high-tech industry. The pricing model was developed in collaboration with Weagree’s launching customer. The first leads to potential customers were provided by Voxius, the legal headhunting agency that assigned Willem Wiggers to Royal DSM, Royal Philips Electronics, NXP and Civolution. Many personal friends of Willem Wiggers have contributed in various ways to the successes of Weagree.

Weagree’s launching customer, ASML, has been playing a major (testing and funding) role in the development of the Weagree Wizard. The members of ASML’s legal department actively promoted the Weagree Wizard to potential other licensees and to their internal clients: discussing and further developing the Q&A-functionalities related to their core model contracts, leading to an expansion of Weagree’s license and the development of additional functionalities.

The contract drafting experience is based on Willem Wiggers’ having been associated with Allen & Overy Amsterdam, and having been contracted by Royal DSM, Linklaters, Royal Philips Electronics, NXP, Q8, Civolution, AkzoNobel and ASML. Willem is a member of the Groupe de travail contrats internationaux (GTCI, a working group on international contract practice), and has contributed to the European Common Core of European Private Law (participating in the working group on Unexpected circumstances[1]). He is the sole editor of International Commercial Law – Source materials[2] author of Drafting contracts – techniques, best practice rules and recommendations related to contract drafting[3].

5.             What kind of resistance have you met and how have you overcome that?

Potential customers seek certainty (do not want to be first-mover) before crossing a chasm to an innovative product that is not yet proven-product. The resistance appeared to be driven by:
(a)   wrong prioritisation of prerequisites: incorrect belief that first the own model contracts need to be upgraded before inserting them in the Weagree Wizard (thereby misjudging that the opposite is true: the actual use of the Weagree Wizard is rather a key incentive to speed up the process of upgrading model contracts);
(b)   insufficient sense of urgency:

  1. a failing belief that there is a problem to be resolved at all (i.e. complaints of lack of productivity, responsiveness or compliance are absent or the business people in an organisation simply avoid (critical and non-critical) legal support);
  2. a failing vision on the future;
  3. failing competitive incentives: there are no clear market forces necessitating the adoption of the innovation;

(d)   little risk appetite regarding the business proposition (regardless of the innovative promise);
(e)   the availability of inferior ‘comparative’ products or services in the market (a few large multinationals did step into such inferior solution but stopped it after bad experiences, such as lack of knowledge of legal practice or unreliable promises);
(f)    uncertainties about implementation impact (both in timing, costs and organisational efforts) and cynicism about change management success in the own organisation;
(g)   costs (wait until the product price decreases or competitors show up);
(h)   incomplete proposition: the adjacent supportive services required to achieve the full promise are not (yet) available or present; and
(i)    reluctance to contract with a small start-up company (backed by a person with no track record in the business).

6.             How did you make the goals realistic and attainable, and at what time will which quick wins be available?

Regarding the Weagree Wizard
After defining the main specifications and features, we started investing time and efforts in the interaction design and the look & feel of the Weagree Wizard. We believed that convincing a lawyer to acquire a license, required that the software application is extremely user-friendly. User-friendly means that (a) the user experience should be remarkable, (b) a user should have a strong sense of being in control of each step in the contract drafting process, and (c) the actual use should be simple. This implied that the prototype had to be simple and yet contain the key functionalities (and not much more). Subsequently, with the first user-experiences, we were able to define functionalities for a second release, making the Weagree Wizard suitable for large organisations.

Regarding the contract drafting services
After having been closely involved in model contract upgrading processes at Allen & Overy, Royal DSM, NXP and Q8, it became clear that selling the proposition of contract drafting would be improved by the publication of a book on contract drafting. As an initial step to such publication (is agreed to be published the forthcoming months) we had an excerpt printed in a luxury style: a nice-to-have booklet of 110 pages.

Initially, we offered a pilot at no charge with supporting services at low cost. This investment turned out to be extremely promising and led to the customer ‘going all the way’ and gradually becoming convinced that the risk involved proved zero and the return on investment was far beyond expectations.

Book and weblog on contract drafting
To establish authority as contract drafting expert, Willem Wiggers wrote a book “Drafting contracts – techniques, best practice rules and recommendations related to contract drafting” which is accessible on the Weagree website and to be published with Kluwer (Spring/Summer 2011). Furthermore, Weagree hosts an (on average: weekly) weblog on drafting contracts: the hundredth blog post appeared in November 2010 (two years after the first one).

7.             Will the innovation have an effect on other organisations in the chain and if that is the case, how will it affect them?

The innovation will fundamentally change the business model of law firms and legal professionals: clients will seek cost reduction on the contract drafting work related to M&A and financing transactions (including the closing of each such transaction). For such a cost reduction, a contract assembly software solution is a prerequisite. Law firms may more and more need to provide services at fixed price (and work on the quality of their know-how and automate part of their drafting processes).

Law firms can grant their clients access to their portal of the Weagree Wizard, enabling the client to create all day-to-day contracts (or term sheets) based on the know-how of that law firm. Large clients will even require access to such a service.

Users of a contract assembly solution with high quality contracts are enabled to deliver their services more expeditiously and at higher quality level (their work will change: stupid copy-paste work disappears, the focus can shift to the things that matter).

8.             How was the development funded and what were reasons for the financing organisation?

The development of the key functionalities of the innovation was funded by Weagree’s sole shareholder personally.

Several important adjacent functionalities were funded out of license fees and development fees (NRE’s) paid by licensees. The latter group was willing to fund on the basis of their (largely proven) belief that the innovation is a major cost-saver.

9.             Can you name 3 to 5 properties of the innovation that are most essential to making it work?

a)   excellent knowledge of the contracting practice of a legal department or law firm;
(b)   high priority for user experience (both the interaction design and the look & feel);
(c)   excellent contract drafting skills;
(d)   flexibility of the software to the personal needs of the user groups and state-of-the-art software technology.

10.          How do you measure whether it is a successful innovation?

The success is visible in the continuous and rigorous expansion by licensees of their license to various corporate departments and business units and in their requests to develop certain specific (yet sustainable) functionalities. Such success includes the expansion of the Weagree Wizard license by a law firm to its clients (i.e. clients getting access to contract templates made available by the law firm).

The success is audible from the abundance of compliments about Weagree coming from persons who are not directly or personally involved in the use of the Weagree Wizard (hearsay).

The success is eventually perceptible in the personal satisfaction of the people involved.

11.           How many people or organisations will benefit from this innovation now?

The innovation is licensed to ASML, a top-tier Euronext AEX and Nasdaq listed company, which seeks to extend the license to an increasing number of internal departments and their suppliers (including their US law firm).

The software part of the innovation is currently used by an online service provider for delivery of low-priced contracts (e.g. 7 euro for high quality tailor-made contracts). The proposition is targeted at a completely different market: SME’s and law firms smaller than (say) ten fee earners. Potentially, this service helps each individual person who needs a contract (or wishes a check-list reference for a contract received from someone else).

12.           How many people or organisations could benefit from this innovation today and in the future (scaling-up)?

Everyone who needs a contract can benefit from Weagree’s innovation. This includes each company, each law firm, each governmental body and any other organisation, as well as individuals.

The benefits are not limited to the creation of contracts but can be extended to other complex forms and documents (e.g. quotations and tender documents).

13.           Can you quantify the financial benefits? (Cost savings, additional income or otherwise)

The financial benefits have several dimensions, each linked to the type of goal achieved:
(a)   as regards time saving for preparing a first draft contract:

  1. financial benefits are between €14,000 and €18,000 per legal counsel per year (depending on salary levels and overhead employment costs) or even up to €42,000 per year, if temporary external support is hired;
  2. €50,000 or a great multiple of that amount for a law firm per closing of an M&A- or financing transaction or a corporate reorganisation.

It must be noted that most companies will not cash in these amounts but nevertheless achieve a greater productivity and time to dedicate to things that matter.
(b)   as regards the response time (productivity) of the legal department: a greater chance of obtaining more business by being faster than competitors (e.g. 1 per cent of the entire enterprise’s turnover by being more customer-oriented?);
(c)   as regards higher quality of the contracts (i.e. the availability of errorless contracts, which are not the result of the latest-similar deal): a significant part of the amounts referred to under (a);
(d)   as regards better compliance with contracting requirements (i.e. as regards a better contractual coverage against operational risks and less disputes about “what applies” as a consequence of considerably more contracts being in place): part of the amounts paid in connection with settlement of damages or disputes;
(e)   as regards the effectiveness of contract upgrading work (and anchoring an individual counsel’s know-how): the availability of model contracts and useful templates and contract clauses cannot be expressed in an amount (but are presumably very significant on the long run).

The above amounts are net amounts, after taking into account the costs of a license under the Weagree Wizard.

14.           Is the innovation financially viable and sustainable and if yes – how?

Yes. The innovation will remain sustainable by continuously investing in product development; improvement of the product and the quality of supporting services.

15.           Can or will the innovation be used internationally and how will you overcome cultural differences?

The innovation is already used internationally. Cultural differences play a small role (if any) in the European context: contracting practices are very similar all over Europe (including, to a lesser extent, the UK). Cultural differences do play a role compared with US legal practice. As regards the presentation of a contract, functionality is being developed in order to overcome this by one push of a button. After all, it is eventually the customer who determines which contract language is used in a contract and what a generated contract must look like.

Cultural differences that are not supported are the Arabic, Chinese, Japanese and languages that affect the product itself (e.g. text written from left to right affect the user interface).

16.           What lessons did you learn along the way that could be useful to others?

Crucial are:
(a)   commitment, reliability and authenticity of the persons involved in the innovation;
(b)   focus on a well-defined and narrow-scoped business proposition (refuse out-of-focus requests);
(c)   priority on developing and positioning the product quality (and not aim at quick profits);
(d)   belief in the own proposition and its sustainability.

Reluctance to enter into a license or to use Weagree’s services requires that a first step is reduced as much as possible (but still adds value).

[1]               Contribution included in: Ewoud Hondius & Hans Christoph Grigoleit, Unexpected Circumstances in European Contract Law, Cambridge University Press, 2011 (714 p.).
[2]               International Commercial Law – Source materials, Kluwer Law International, 2nd rev. ed. 2007 (738 p.).
[3]               Drafting contracts – techniques, best practice rules and recommendations related to contract drafting Kluwer, forthcoming (in print) (332 p.).

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