In my years reviewing so many of commercial bank loan agreements for large to mid-market corporate transactions, one truth stood out: roughly 80% of the provisions across these documents expressed the same concepts, yet they did so in maddeningly different ways. Each agreement, despite its superficial uniqueness, was a linguistic snowflake — distinct in form but identical in substance. This realization wasn’t just an observation; it was a revelation about the inefficiency baked into the legal industry’s approach to contract drafting.
The consequences of this variability are staggering. Because every loan agreement uses bespoke phrasing to articulate boilerplate ideas—like representations, warranties, or covenants—each document demands a fresh, meticulous review. Thousands of people-hours are spent decoding these redundant variations, with clients footing the bill for what amounts to a legal Tower of Babel. Law firms profit, but at what cost? Bloated expenses, drafting errors born from unnecessary complexity, and the quiet burnout of lawyers and clients navigating this self-inflicted chaos.
This inefficiency isn’t unique to loan agreements. I’d wager it permeates other lengthy commercial and financial contracts—think lease agreements, merger documents, or securities offerings. The legal profession has long fetishized artisanal drafting, treating every contract as a handcrafted masterpiece. But here’s the heresy: it’s time to standardize. The commercial banking industry—and indeed, all sectors relying on complex agreements—should adopt uniform language for the duplicative 90% of provisions, reserving bespoke drafting for the rare cases where it’s truly warranted. Counsel should be barred from tweaking standardized clauses without a compelling, client-driven reason. The result? Lower costs, fewer mistakes, and a collective sigh of relief from deal-weary stakeholders.
This isn’t just a practical suggestion; it’s a philosophical shift. The legal world clings to the myth that high-stakes transactions demand fully customized contracts, as if standardization betrays the client’s interests. I call nonsense on that. Virtually every drafter starts with a precedent—some prior deal’s document, dusted off and repurposed. The “custom” contract is a mirage; it’s a remix, not a reinvention. Yet, lawyers persist in treating their lightly revised precedents as sacred, proffering them as “very special” opening salvos in negotiations. The process devolves into a tedious game of redlining, where hours are squandered reconciling stylistic quirks rather than resolving substantive differences. Standardization would cut through this noise, letting negotiators focus on what matters: the deal’s unique terms.
And let’s bury another sacred cow: the so-called “drafting initiative.” The idea that supplying the first draft gives you a strategic edge—like planting a flag on unclaimed territory—is a relic of ego-driven lawyering. In practice, it’s a hollow victory. The other side’s counsel will inevitably counter with their own precedent, and the dance of revisions begins anew. The real winners in this charade are the billable hours, not the clients. A standardized starting point neutralizes this posturing, leveling the field and accelerating consensus.
Beyond efficiency, there’s a deeper insight here: standardization could elevate trust and clarity in commercial relationships. In a world of uniform provisions, parties could rely on shared understanding, reducing the paranoia that every unfamiliar phrase hides a trap. Imagine a future where contract disputes focus less on ambiguous wording and more on genuine intent—an outcome that benefits courts, clients, and the legal system’s battered reputation.
Critics might argue that standardization stifles creativity or flexibility. But artisanal drafting isn’t about brilliance; it’s about inertia. True innovation lies in crafting the 10% of a contract that defines the deal’s soul—its bespoke risks, rewards, and contingencies—not in rewording a force majeure clause for the hundredth time. And for those rare cases where standard language falls short, exceptions can be carved out, justified by necessity, not whim.
The tech world offers a compelling analogy: “Write once, run everywhere.” Software developers embraced reusable code libraries decades ago, slashing development time and bugs. Law lags behind, trapped in a pre-industrial mindset where every contract must be forged from scratch. It’s time to catch up. Standardize the mundane, liberate the exceptional, and redefine what it means to serve clients well. The savings in time, cost, and sanity would be revolutionary—and the legal profession might just rediscover its purpose in the process.