Some Thoughts on “Bloomberg Law: Corporate Transactions”

Last week I noticed this post on Dewey B Strategic about Bloomberg BNA’s new product “Bloomberg Law: Corporate Transactions. (Gotta love the colon, which gives it an action-movie-sequel vibe.) For Bloomberg BNA’s own announcement, go here.

I’ll let you find out for yourselves exactly what’s on offer, but here’s the gist of it, according to Bloomberg BNA:

The new Bloomberg BNA product includes Draft Analyzer, a patented technology that helps attorneys find precedents, provides language for agreements and compare documents; Deal Analytics, which enables attorneys to search Bloomberg LP data for public and private mergers and acquisitions, filtering them by size, industry, advisers, fees and other criteria; and In Practice, a set of checklists, timelines, sample forms and clauses to guide attorneys through the transaction process.

Well, excuse me if I can’t work up much enthusiasm for this. I say that without even having seen a demo.

Corporate Transactions does what other comparable products do: it digests and makes accessible to you the contracts in the SEC’s EDGAR system and Bloomberg’s own database, and it offers a bunch of canned analysis. In some contexts it’s helpful to be able to find out quickly what others are doing in comparable deals. But when it comes to determining what to say in your contracts and how to say it, the problem is that what’s in any deals database is inevitably one big mess. Because traditional contract language is dysfunctional, you have a giant garbage-in, garbage-out problem of the sort I wrote about in this 2011 post. And you can expect that the canned analysis offered by Corporate Transactions mirrors that dysfunction, making it equally suspect.

But Bloomberg BNA has William Henderson vouching for this sort of approach:

William Henderson, a professor at Indiana University’s Maurer School of Law who studies the legal profession, said that the new product ties into a broader shift taking place in the digital era, with legal processes such as the drafting of contracts becoming easier and faster to complete. With contracts, “we used to get paid to dicker and complain and litigate over non-standard terms,” said Henderson. “Once everything goes standard, there’s a lot less to argue about, and that changes the legal industry pretty dramatically.”

The standardization of contractual language could have a major impact on the legal profession, Henderson said. The Bloomberg product, he said, could save time and reduce ambiguity in contracts, “which is all good, but a little of an anathema to the firm’s billing model.”

“You can actually begin to digitize contracts in ways that reduce transaction costs dramatically,” Henderson said. Litigation costs will also decline, because there will be fewer disputes when the meaning of the contractual language has all been decided, he argued.

Sure, “standard” is good. But for “standard” to be worth anything, you have to start with “quality,” and you’re never going to get to “quality” rummaging around in the great flea market that is EDGAR and comparable databases. Quality requires strong editorial control of the sort that is absent from Corporate Transactions.

I’m not sure how familiar Henderson is with contracts, beyond being an observer of the legal market. I was particularly puzzled by his reference to a time when “the meaning of the contractual language has all been decided.” For three reasons, that’s not how it works:

First, in a contract you express the deal as clearly as you can. Only if the contract is confusing or fails to address something and the parties are sufficiently unhappy do you get litigation. So courts only see a small part of contract language.

Second, what a court has to say about a bit of confusing contract language depends on the circumstances of the dispute, not to mention how sharp the judge is, so different courts say different things about the same bit of contract language, and over time courts in a given jurisdiction might say different things about the same bit of contract language. That’s why the same phrases—for example, best efforts and its variants—keep cropping up in litigation. There’s no basis for assuming that one fine day harmony will prevail and all uncertainty will have been resolved.

And third, the key to clear contract language isn’t the old canard about “tested” contract language—that you should parrot confusing language based on the meaning attributed to it by a court in litigation. Instead, you should go out of your way to avoid confusing contract language.

I’m sure that Bloomberg Law: Corporate Transactions will find a market. Me, I serve a different market, namely those people and organizations for whom the starting point of the contract process is contracts that optimally address the organization’s needs and do so using clear and concise contract language. Technology plays a role here, too, by giving users access to customized and annotated templates that contain optimal language.

But I acknowledge that the market is such that currently there exists no generally available curated set of quality automated templates. So I don’t fault anyone for using Bloomberg Law: Corporate Transactions. My main point is that one should realize the limitations of all products that are based on mining the dysfunction out there.


Contract-Automation Clearinghouse is where I put my posts on contract automation and related topics. My regular blog is at Adams on Contract Drafting.