Contract templates.
They’re fantastic. They save time! They’re efficient!
So…let’s ditch them for something different.
Let’s use Zero-Based Drafting.
Templates are Great
Let’s get the obvious stuff out of the way first. Templates are wonderful and have a ton of benefits:
● Time and cost efficiency. Contract templates save time, money, and effort.
● Consistency across agreements. Through consistency, templates standardize terms, reduce rogue deviations, and eliminate confusion.
● Checklists on steroids. Templates ensure that you won’t omit crucial items. They’re checklists with built-in comprehensiveness to ensure nothing will be missed or forgotten.
● Easier contract management. Templates are easier to organize, store, retrieve, and analyze. They let you manage contracts at scale.
● Simplified negotiation process. Templates serve as solid starting points for negotiations, and standardized format builds familiarity that can streamline negotiations.
But Templates are Holding you Back
At the same time, templates are holding you back. Why? For all their benefits, templates have some drawbacks:
● They stunt your drafting and analytical skills. Because they’re mostly done-for-you, templates prevent you from thinking critically and drafting intentionally.
● They impair your judgment. Templates don’t force you to develop your own independent judgment.
● They suppress your creativity. Templates let you think you can stand on the shoulders of giants and just change the parties’ names, but as a result, they shut down your creativity and the possibility that you - yes, you - can improve the template.
● They crush your confidence. When you rely on templates, you’ll eventually find yourself unable to draft without them. Before cell phones, you knew everybody’s phone number. Now, you probably don’t even know your parents’ phone numbers. Templates lead you down the same path.
● They stagnant growth. Templates rob you of the opportunity to improve the document. What motivation is there to improve yesterday’s template?
Fortunately, there is a solution.
Ditch the templates and try Zero-Based Drafting.
Zero-Based Drafting
Zero-Based Drafting is inspired by zero-based budgeting.
Zero-Based Budgeting is a financial strategy in which you start from zero and only add an expense when it can be justified. Just because an expense was justified once does not mean it is justified again. You have to keep justifying it.
You start with 0.
Zero-Based Drafting works similarly.
Zero-Based Drafting means starting with a blank page instead of a template. It means building each agreement from the ground up. It means drafting a clause when it can be justified, not because it was included in a template.
You draft from 0.
Benefits of Zero-Based Drafting
Zero-Based Drafting offers numerous benefits that go beyond just creating a single contract:
● Deep Understanding. You'll gain insight into why each clause exists and how it relates to the overall agreement.
● Customization. Your contracts will be better tailored to each specific transaction rather than relying on a one-size-fits-all template.
● Improved Problem-Solving. As you draft from scratch, you'll naturally anticipate potential issues and draft proactively to address them.
● Confidence. You'll develop greater confidence in your drafting abilities, learning to rely less on templates and trusting your own judgment more.
● Better Negotiations. Your understanding of each clause and its purpose will help you negotiate better, as you’ll be better able to explain and justify clauses that your counterparty redlines.
● Continuous Improvement. Each contract becomes a learning opportunity, allowing you to refine your skills and stay current with legal developments and best practices.
Who can benefit from Zero-Based Drafting?
Zero-Based Drafting can work for anybody.
● If you want to improve your drafting skills, Zero-Based Drafting can help by forcing you to draft from 0 rather than recycling a template.
● If you want to quickly develop working knowledge with an unfamiliar contract type, Zero-Based Drafting will help you identify the issues and figure out what clauses are needed and why.
● If you’re a young lawyer or contract professional, Zero-Based Drafting will help you build practical contract drafting skills you’ll never get through templates alone.
Templates can be helpful, but they can’t provide the benefits of Zero-Based Drafting.
Zero-Based Drafting: How to do it
Here’s how to use Zero-Based Drafting:
Start with a blank page.
This part can seem scary and intimidating.
A blank page is scary because it conjures up writer’s block. But writer’s block is only scary because you don’t know what to say or where to start.
Fortunately, contracts provide an easy answer to those questions.
Write the title.
The best way to confront the blank page is to title the contract.
Put the title at the top, centered, in bold letters. “Mutual Non Disclosure Agreement.” That’s it. Now you’re rolling.
And before you think this a meaningless step, consider how the title sets the tone for the rest of the agreement. For example, for an NDA, do you include the word “mutual”? Is “nondisclosure” better than “confidentiality”?
These are all relatively minor decisions, but it’s better that you make the decisions rather than whoever happened to draft whatever template you may otherwise choose.
Consider also how valuable thinking about these issues are for newer lawyers and contract professionals. Many lawyers graduate law school without having ever drafted or even seen an actual contract. What better way to solve for this lack of experience? Confront it directly. With Zero-Based Drafting, newer lawyers and contract professionals are forced to think about a contract’s most basic elements and draft them from the ground up.
Draft the introductory paragraph.
As with the title, this paragraph seems easy.
With a template, you probably just need to change the party’s names and descriptions. But as with the title, there are worthwhile decisions to be made here.
When you draft this paragraph by scratch, you’ll find plenty of decisions to make. You may want to define the agreement itself. It is usually called the “Agreement,” but if you’re tempted to use it as an acronym (eg, “NDA”), you’ll have the chance to consider whether an acronym is clear or confusing for your reader.
You’ll then have to consider how to identify the parties. Do you want to use a term based on the party’s name or their role? For example, “ABC” or “Licensor”?
You’ll also have to make your first stylistic choice, which is how to identify defined terms. Bold? Italics? Underline? Some of those? All? That choice reflects a drafter’s style, so don’t outsource it to a template.
Again, it is not that these are significant decisions, but rather that they are decisions that should be made by the drafter and not outsourced uncritically to a template.
Draft the recitals/background section.
“Buyer wishes to buy, and seller wishes to sell…”
Instead of copying generic language, the drafter can think critically about what background information is truly relevant, how this information supports the contract's purpose, and what level of detail is appropriate. Why are these parties entering into this contract?
This is the drafter’s chance to tell the story of the agreement.
Create a checklist.
For the next step, you may be tempted to (finally) start drafting some clauses (or perhaps copying and pasting some clauses from a template).
Don’t.
Instead, make a checklist.
Just start listing clauses or concepts you think should be addressed in the agreement. Don’t worry about the correct names or putting them in a particular order. Don’t second-guess yourself and delete something after you just wrote it down.
At this point, you just want to identify the concepts you think are important. You’ll have time later to go back and rename, reorder, combine, and cull them.
This step helps you identify key concepts without getting bogged down in details, visualize the relationship between different clauses, and decide what to include or exclude based on the specific transaction.
And if you want to consult a template here, go ahead. But just focus on the section headers - don’t start copying and pasting. Remember: you just want to create the checklist.
One way to understand the value of this step is to think about the types of contracts you know very well compared with those you don’t.
For example, if you work with SaaS agreements frequently, you could easily create a checklist of 10+ clauses without even looking at a template. But could you, for example, do the same for a commercial lease agreement? This thought experiment shows that you don’t really know a particular type of contract until you can create a checklist without a template.
Zero-Based Drafting can help you develop that expertise.
Create the signature block.
Creating a signature block is an underrated exercise.
Practically speaking, the signature block may be the only part of the entire contract that a signatory actually reads or interacts with through signing. Creating the signature block asks you to consider the enforceability of the contract while also viewing the contracting process itself through the signatory’s perspective.
The signature block is the heart of the contract, so don’t surrender it to a template just because it is easy.
Filling in the Skeleton: Bottom-Up Drafting
Congrats, you now have a skeleton agreement.
You have the bookends. Title, introduction, and background at the front and signature block at the back. And a checklist of clauses and concepts in the middle.
You've already done more critical thinking about this specific agreement than you would have if you'd started with a template.
Now comes the counterintuitive part.
Instead of starting at the top, start at the bottom and work your way up. Start with the boilerplate. This is bottom-up drafting.
Start with boilerplate clauses that cover concepts like amendment, waiver, notice, governing law, dispute resolution, assignment, and entire agreement.
Yes, these are some of the easiest clauses to pull from a template. They’re simple, relatively standard across most contract types, and aren’t usually deal-breakers.
But this is exactly why Zero-Based Drafting has you start drafting these clauses first:
● It forces you to focus on less-complicated, single-issue clauses. This allows you to think critically about each issue as you draft from scratch.
● You build and reinforce general drafting skills, as these clauses often apply across various transactions. The more you draft them from scratch, the better you'll understand their nuances.
● You get in more “drafting reps.” Each time you draft a clause, you figure out the best way to think about and draft that particular concept. For example, once you’ve drafted dozens of assignment clauses, you’ll have a strong sense of what makes an assignment clause good or bad.
The Home Stretch: Tackling Core Provisions
It’s finally time to get to the meat of the agreement: the core provisions.
At this point, don’t be afraid to consult templates and a clause library. Once you hit the core provisions, you’ll know what to look for in a template and you’ll be better able to evaluate whether the clauses you’re consulting are good or not.
Alternatively, if you want to draft the core provisions from scratch, you should be well-positioned to do so. You’ve already built the rest of the agreement from scratch. And you’ve already thought deeply about the core issues.
Either way, through Zero-Based Drafting, you’re on your way to drafting a contract that’s better than any template you’re likely to find.
Conclusion
If you want to elevate your drafting, don’t reach for a template. Fire up that blank page and try Zero-Based Drafting.
Nate is the Director, Contracts with Oncology Nursing Society (ONS), where he handles all commercial contracting matters, as well as intellectual property, insurance, facilities, and legal operations. Prior to joining ONS, Nate was in private legal practice, concentrating in corporate and transactional law, intellectual property, and commercial litigation.