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Category: PB User-friendly contracts

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User-friendly Contracts Policy Brief

HiiL POLICY BRIEF

User Friendly Contracts

March 22, 2022
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Contracts are essential tools for enabling cooperation between people.  Although legal professionals are comfortable with such documents, most people find contracts difficult to understand. A growing group of scholars and innovators is trying to make contracting a more positive experience. They are developing user-friendly contracts that are fair and transparent and help people to better understand their rights and obligations. 

Two types of contract practices have emerged from their efforts: online contracting and visual, simplified and plain language contracts.  Their starting point is the user, who may be illiterate, speak a different language or just lacks the time to read a lengthy document. Paradigms behind this new development in the field of contracts include proactive law, responsive law, people law, legal design and people-centred justice. 

In this policy brief, we seek to answer the question

“How might we increase access to justice for people by scaling and improving user-friendly contracts?”

Our objective is to identify critical success factors for organisations providing user-friendly contracts that are involved in scaling and improving the quality of service delivery. 

To scale the usage of these contracts, there is a need to market the idea and its underlying vision. Online support for contracting is already taking off. Regulatory bodies need to validate the legal enforceability of visual contracts which can increase the confidence of individuals, small businesses and legal professionals in using them. As a next step, we expect user-friendly contracts to embrace principles of relational contracting to further strengthen the relationship between contracting parties. 

1. A Better Contracting Experience

Contracts between two parties outline roles and responsibilities, mode of communication and dispute resolution methods between the parties. They also provide for contingency planning, timelines and financial obligations. Lawyers draft contracts using standard or previously tested forms, clauses and templates. They try to ensure that the interests of their clients are protected by providing solutions for all contingencies, even if they are unlikely, and by making the contract enforceable and binding and unambiguous [1].

Although legal professionals are comfortable with such documents, people find such contracts lengthy, unclear and filled with jargon or legalese [2]. Research on how people experience contracts reveals that people feel alienated by contracts, assuming that the text will be interpreted literally, that parties will be obligated to perform their duties and that by signing the contract they are giving away their rights. They overlook that contracts, and contract law, can also protect them [3].

A growing group of scholars and innovators is trying to make contracts a more positive experience. They are developing user-friendly contracts that are fair and transparent and help people to better understand their rights and obligations. In doing so,  they want to safeguard fundamental relationships – at work, about money, between family members. They believe that the contracting process can facilitate better understanding between the contracting parties and improve their relationship. Their starting point is the user, who may be illiterate, speak a different language or just lacks the time to read a lengthy document. Paradigms behind this new development in the field of contracts include proactive law, responsive law, people law and legal design. 

At HiiL, we see this trend of user-friendly contracts as a promising avenue towards people-centred justice. Working from Sustainable Development Goal 16.3 – ensure equal access to justice for all – people-centred justice is a pathway to strengthen justice systems. It puts people and the outcomes people need at the centre, not institutions nor existing procedures. Of the service delivery models that deliver people-centred justice services, user-friendly contracts stand out prominently. We call them a gamechanger, when we are looking for service delivery models that are scalable, sustainable, affordable and effective.

1.1 Online contracting

User-friendly contracts encompasses online contracting, plain language contracting, simplified and comic or visual contracts. Online contracting helps individuals and small businesses in accessing legal documents such as wills, uncontested divorce documents, power of attorney and privacy statements, terms of use, sales agreements and employment contracts. Users can customise the online templates according to their own needs, and have their agreements checked by a lawyer. These contracts are more affordable than the contracts drafted by law firms. Many of the platforms that provide online contracting also allow users to store the documents, sign them digitally and collaborate with contracting parties and team members in drafting contracts. They allow small and medium scale enterprises to register their business and trademarks, apply for patents and also connect them with vetted lawyers if they want legal advice. Some examples of companies providing automated contracts are LegalZoom in the USA, VakilSearch in India, Avodocs in Ukraine/USA and DIYLaw and LawPadi in Nigeria [4]. As the examples above suggest, user-friendly contracts have been developed primarily by private companies in both low income and high income countries. In terms of funding, online contracting has received support from venture capitalists or private equity as in the case of LegalZoom and VakilSearch [5]. In high income countries, they can face barriers in the form of opposition from lawyers and bar associations as they question the legal enforceability of contracts that are automated or not drafted by lawyers themselves. In low income countries, online contracting companies are struggling to replicate the scale their counterparts achieved in high income countries.

1.2 Visual, plain language and simplified contracting

Examples of simplified, plain language and visual contracts are Visual Contracts in the Netherlands and Creative Contracts in South Africa. Visualisation in contracts ‘refers to adding flowcharts, icons, timelines, images, matrices to highlight, clarify and explain the content [7].  So far, visual contracts have been used to develop employment contracts, forms of informed consent for medical procedures and non-disclosure agreements [8]. The main advantage of these contracts is that they make rights, obligations and terms and conditions easy to understand for the contracting parties and therefore facilitate better relationships between contracting parties.

Along with visuals, contractual terms are written using plain language unlike traditional contracts that are filled with legalese which everyday people cannot understand. It entails breaking down long sentences into shorter sentences, replacing archaic and Latin words with words that are understood by the public and other such measures. Proponents of the plain English language movement argue that laws are primarily meant to address the needs of ordinary people, and not lawyers and judges. So they should be drafted in a way that they are ‘fully intelligible’ to their primary users. The UK, USA, Australia, Canada and other English speaking countries have already begun using plain language to draft legislations and government forms [9].

Simplified contracts refer to removal of irrelevant clauses and inserting terms which are fair and balanced for both parties. The objective of simplifying contracts is to meet the needs and requirements of both parties to the contract and help them arrive at an agreement swiftly.

Visual, simplified and plain language contracts are a relatively recent addition to the field of contract design. Creative Contracts from South Africa that crafts contracts in the form of a comic, has received funding from HiiL’s Justice Accelerator as well as corporate clients [10]. Plain language and simplified contracts that facilitate relationships between contracting parties have been developed by in-house legal departments of companies such as General Electric and non-profit organisations such as World Commerce and Contracting [11]. However, both visual contracts and plain language, simplified contracts are yet to be accepted by legal professionals across the globe.

In this policy brief, we seek to answer the question “How might we increase access to justice for people by scaling and improving user-friendly contracts?” Our objective is to identify critical success factors for organisations providing user-friendly contracts in scaling and improving the quality of service delivery. Justice workers can use this policy brief to understand ‘what works’ when trying to scale user-friendly contracts and improve the quality of justice that they deliver. We use the examples of DIY Law in Nigeria, Creative Contracts in South Africa, World Commerce and Contracting in the UK and Avodocs in Ukraine to identify the critical success factors and connect these experiences to state of the art on these factors in the research literature.

In sharing this knowledge, we hope to make justice accessible, affordable and effective for our ultimate beneficiaries — the people.

1.3 Methodology

To answer the question “How to scale user-friendly contracts to increase access to justice?”, we formed a working group of external experts. To guide the discussions with working group members, we identified the following design questions:

  • How might we improve the effectiveness of user-friendly contracts?
  • How might we support user-friendly contracts with standardisation and tools?
  • How might we develop the enabling environment for user-friendly contracts?
  • How might we make user-friendly contracts affordable and sustainable?
  • How might we build user-friendly contracts into a scalable operation?
  • How might we market a user-friendly contract delivery model?

The working group engaged with these design questions and from this dialogue emerged the critical success factors that can help in scaling user-friendly contracts.

To select members for the group, we identified six experts representing diverse demographics and expertise (innovators, policymakers, investors, legal professionals, civil society) from within and outside HiiL’s network.

They are:

We organised six roundtable discussions between June 2021 to February 2022 to facilitate the conversations on the design questions among the experts. 

This policy brief summarises the findings of the roundtable discussions and lessons learnt from experiences of working group members and other innovators in setting up user-friendly contracts including: 

2.Critical Success Factors

In the sections below, we identified five critical success factors based on discussions with working group members and examples of and to scale user-friendly contracts that emerged from the conversations during the roundtables. We also include main takeaways from the cases that we worked on with support from the members of the working group.

2.1 Optimising the user-experience

The approach of preventive law or proactive law towards legal problems is, as the name suggests, to prevent problems from arising and achieve desirable outcomes for all parties involved. Both paradigms look beyond risk management and focus on providing clarity on rights and obligations. Legal Design which emerged from proactive or preventive law improves legal communication by providing services and products that are user-friendly. A combination of law and design thinking, it offers tools and methods to make legal documents transparent and user-centred [12].

The working group members, too, believe that user-centred design of legal documents or contracts is essential in scaling them and improving their quality. However, as of now, lawyers do not have the tools or infrastructure to develop visual contracts. Legal research databases that lawyers generally use are not programmed to highlight visuals as a result of which lawyers find it challenging to locate examples of suitable visualisations. Form books, another resource that lawyers fall back on, also do not provide examples of visualisations. The softwares that lawyers use is not equipped to produce sophisticated visuals. Most importantly, lawyers do not have the skill sets to visualise information or to literally draw [13].

To create the infrastructure necessary to develop visual, simplified contracts, we have developed the following insights along with the working group members:

  • Currently, a majority of the contracts are prepared and executed by the law firms. While there are efforts made to involve graphic designers to improve the readability of the contracts, it is largely limited to improving visual appeal of the contracts by changing colours, layout, font and logos. More far reaching changes are needed instead. Law firms need to take a multidisciplinary approach to developing contracts. This includes collaborating with information designers and graphic designers while developing content of the contracts to make them easy to read through use of plain language as far as possible. This way, the information designer can help in layering and visualising information.
  • Apart from collaborating with information designers when crafting contracts, legal professionals and businesses can also be trained in using tools and techniques that are essential in creating visual, simplified and plain language contracts. World Commerce and Contracting is one such organisation that organises workshops to provide training in crafting visual, simplified, plain language contracts. The contract design pattern library developed by the organisation contains templates which users can take inspiration from when designing contracts [14]. Templates that can guide in organising information, designing layout of the document, using the right visuals such as icons, flowcharts, tables can be developed for ease of use and scale. This is one of the best practices in the field and should be utilised for replication across organisations.
  • Another approach towards optimising user-experience is garnering feedback of users and improving the contract or service delivery model based on the feedback. Literature indicates platforms providing online contracts have conducted surveys and focus-group discussions to identify contracts users need most. They also follow an iterative process where they test their product with a small group of users and improve the design of the product based on feedback [15]. The experience of Avodocs also indicates that developing a prototype of an online contract and then testing it with end users is essential to improving the quality of the product and platform.
    In the case of visual contracts, simplified and plain language contracts, the experience of WCC and Creative Contracts suggests providers have difficulty with user testing as they are third party suppliers of a product and do not interact with end-users. However, experts agree that user testing is essential to improve the design of simplified, visual and plain language contracts as well.
  • Besides creating the necessary infrastructure, experts also suggest that the approach of online contracting towards developing user-friendly contracts also needs to change. Currently, online contracts use templates of contracts that contain standardised clauses and legal language. These templates are vetted by lawyers which users can customise to suit their needs. Since online contracts are derived from traditional contracts, they pose the same challenges to users as traditional contracts do, except that they are more affordable than traditional, lawyer-drafted contracts. To achieve user-friendliness in its true sense, online contracting companies need to shift from using templates of traditional contracts to developing visual, simplified and plain language contracts.

2.2 Showing and optimising the benefits for client companies

The clients who purchase simplified, plain language and visual contracts are often large companies who offer contracts to their employees, suppliers and customers. The benefits derived by employees, suppliers and customers from user-friendly contracts are obvious in the sense that they understand their rights and obligations better.  But the benefits to client companies who develop and purchase user-friendly contracts have not been demonstrated [16]. To get more companies interested in user-friendly contracts, experts suggest developing a value proposition of these contracts for client companies.

To develop a value proposition for client companies, we have developed the following insights along with the working group members:

  • Studies have shown that companies such as Shell and General Electric report a reduction in negotiation time, fewer revisions to the contract and a high number of accepted terms and conditions when using simplified, visual and plain language contracts in place of traditional contracts [17]. Monitoring and measuring such outcomes using specific indicators can provide strong incentives to the client companies. These indicators, namely change in time required to negotiate a contract with the other party, the number of revisions made by the other contracting parties and the number of accepted terms and conditions can help the providers of user-friendly contracts to demonstrate benefits to client companies.
  • Aurecon in Australia offers comic employment contracts to its employees based in Australia, New Zealand, Asia, South Africa and the Middle East. “Sometimes with contracts it feels like we sign it without really understanding it because it's too complex - we wanted to take that away because that's not a great way of starting an employment relationship...It's got to be built on trust from day one. We're not trying to hide anything in our employment contracts" explains Aurecon’s Chief People’s Officer [18].
  • There are also companies that actively support corporate social responsibility, or are more conscious about fostering stakeholder relationships. For such companies, a value proposition on social benefits of user-friendly contracts is easier to offer. To demonstrate social benefits, the lived experience of the end-users of the contract can also be documented. For instance, a video made on Comic Contracts shows that cocoa farm workers who could not properly read or write felt empowered when their employment contracts were designed in the form of a comic, as they understood the contract independently, without the need for any assistance [19].
  • More rigorous evidence of the benefits of user-friendly contracts can also be generated by conducting in-depth interviews with end-users to examine how they benefited from the contract. The outcomes that user-friendly contracts can deliver can also be monitored using the following indicators: 1) change in percentage of people who understood the terms, conditions, duties and rights described in the contract 2) change in percentage of people who understood the complete contract.

2.3 Changing the mindset of lawyers and companies on contracting

Lawyers prefer to rely on long-established standard contract terms, language, formats and precedent documents. The use of visuals in contracts is not widely prevalent.  The law school curriculum does not introduce the students to principles of legal design thinking or re-imagining the way contracting can be carried out. Law schools teach students how to draft a contract and use case laws but they do not train students on how to visualise information [20]. While plain language is comparatively more commonly utilised in the justice sector, legalese is still the norm for drafting of the contracts in the majority of the legal world. Discussions with working group members indicate that legal and business professionals are averse to removing standard clauses in contracts [21].

A part of this is also the awareness challenge. Many a times, legal professionals and businesses are unaware of visual, simplified, plain language contracts [22]. To increase the usage of user-friendly contracts, it is essential to change the mindset of legal professionals. To that end, we have developed the following insights along with the working group members:

  • Scale the messaging/marketing to ensure better uptake of user-friendly contracts. This can be done with the help of use cases, emphasising how the private and public sectors embrace change. One such example is usage of visuals in the form of flowcharts, tables replacing long paragraphs, irrelevant clauses and legalese [23]. Another example is that of the Government of Indonesia which has adopted simplified, visual contracts in its procurement process [24].
  • Make allies with lawyers who work in top law firms and other influential figures in the legal profession. If influential figures promote and use simplified, visual and plain language contracts, others will be encouraged to follow suit.

2.4 Developing a sustainable financial model

Previous research conducted by HiiL indicates that user-friendly contracts can adopt two types of pricing models. One, where the company charges a fixed fee differentiated per type of product and two, where the company offers contracts for a subscription fee. Companies offering online contracts usually charge a subscription fee such as LegalZoom in the USA and LawPath in Australia [25]. In case of contracts that are visual, simplified or presented in plain language, client companies request consultants/consulting companies to craft the contract. Insights from case studies and discussions with working group members indicate that:

  • Market mechanism provides an avenue for developing a sustainable revenue model for creators of user-friendly contracts. For platforms that provide document automation as well as for those providing services of creating simplified contracts through the use of visuals and plain language, businesses and corporations are the primary customers. Having said that, in many cases, the ultimate user or beneficiary is an individual who is the other contracting party. A model which is business to business (B to B) is often a starting point for the private providers. Over time, innovators move to a business to customer model (B to C). Having differential price points for businesses and individual consumers can help in finding financially sustainable growth. This in turn, creates the capacity to provide affordable contracts to everyday people.
  • Providers of document automation platforms that are able to systematically scale their ventures often work with a model enabling the customers to access a set number of documents free of charge. Customers with higher demands in terms of number of documents as well as advanced features like team collaboration on the document, electronic storage and signature can be charged on the subscription model.

2.5 A supportive regulatory environment

Providing user-friendly contracts remains an area of expertise for private providers and the regulatory barriers are not as significant as experienced in some of the other gamechanger categories. The barrier to overcome is that of slower adoption and integration by the legal fraternity in general. Having said that, there are still some regulatory impediments to overcome. LegalZoom, a leading provider of user-friendly contracts in the USA, has had to fight the legal provisions that only lawyers are allowed to provide legal advice. It was challenged by the American Bar Association in multiple jurisdictions [26].However, as the platform gained popularity among people, bar associations made space for the providers of user-friendly contracts to operate, provided that customers be informed by the private providers that such contracts are not equivalent to legal advice of lawyers [27].

Over a period of time, several online contracting platforms have emerged in high income countries which indicates that the regulatory environment has not posed a challenge to their services. However, the demand for online contracts in low income countries is relatively small. People still prefer to obtain contracts from lawyers indicating the need for a change in the mind-set of people as well as legal professionals.

As for simplified, visual and plain language contracts, they are still in the nascent stages of market adoption. Most legal professionals or bar associations have so far not commented on their enforceability so there is uncertainty among legal professionals and the business community about their enforceability. However, Australia’s former High Court Chief Justice Robert French stated at a conference hosted by the University of Western Australia in 2017 that there was “no reason in principle why pictorial contracts explained orally or supplemented textually or contextually could not be enforceable in the same way as any other contract” [28].  Despite this remark in support of visual contracts, developers of visual contracts often find themselves facing questions around legal enforceability.

The support of regulatory bodies in the form of an enabling regulatory environment is essential in scaling user-friendly contracts. To create this enabling environment, we have developed the following insights along with the working group members:

  • Following the example of Robert French, the former Chief Justice of Australia, clarifying the question around legal enforceability of visual and plain language contracts by judges can help bring the necessary validity and formal sanction for easier adoption.
  • To encourage lawyers to adopt user-friendly contracts, the formal justice system may consider making them mandatory as was done in the case of mediation in several countries. Otherwise, despite a small percentage of lawyers taking up user-friendly contracts, they will not proliferate among the majority as the latter will focus on risks attached to the same.
  • Law enforcement agencies or regulatory bodies can play an important role by building disincentives for using cumbersome contracts that are difficult to understand for people. This can compel legal professionals to adopt user-friendly contracts more easily.
  • The 2021 Courts (Civil and Criminal Justice) Reform Bill in Singapore provides for removing archaic language in contract documents and replacing it with plain language [29]. Similar initiatives have been taken in the UK, USA, Australia, and Canada [30]. If the justice systems across the world can make similar shifts to using plain language, significant strides can be made in developing a shared movement for adoption of user-friendly contracts.
  • Law schools can be one of the key stakeholders in inculcating the necessary mindset for replacing unnecessary legalese with more accessible language. Incorporating design thinking and exposing newer approaches in law like the proactive law practices to students who are legal professionals of the future can increase awareness about the benefits of user-friendly contracts. This can also equip the students with the necessary skills to design visual, simplified and plain language contracts.

3. Outlook

The potential of user-friendly contracts in bridging the access to justice gap is tremendous. Online contracting has already taken off in high income countries whereas in low income and middle income countries, there is more scope to expand. While online contracts provide easy access to legal documents, they also need to adopt the form of visual, plain language and simplified contracts to enable ease of understanding for users.

 

Visual, simplified and plain language contracts are emerging. To scale the usage of these contracts, there is a need to market the idea and its underlying vision. Regulatory bodies also need to validate the legal enforceability of these contracts which can increase the confidence of individuals, small businesses and legal professionals in using them.

 

The case studies of Comic Contracts and DIYLaw indicate that early stage innovators need significant funding to develop the product and scale it. To attract investors, these innovators need to demonstrate the economic potential of their contracts as well as their ability to increase access to justice. For the latter, they can monitor outcomes that user-friendly contracts have provided to users so far to demonstrate impact to investors and donors alike.

Relational contracting is another approach to contracting that is even more effective in stimulating cooperation, trust and fair distribution of risks and benefits between the contracting parties, instead of the sticking to the exact terms and conditions for eventualities that is part of the existing culture of contracting [31]. As a next step, we expect user-friendly contracts to embrace principles of relational contracting to facilitate the relationship between contracting parties.

4. Authors

This policy brief was written by Manasi Nikam (Knowledge Management Officer),  Kanan Dhru (Justice Innovation Advisor) and Prof Dr Maurits Barendrecht (Research Director) at HiiL

[1] Stefania Passera, Helena Haapio, and Thomas D. Barton, Innovating Contract Practices: Merging Contract Design with Information Design, in Proceedings Of The 2013 Academic Forum On Integrating Law And Contract Management: Proactive, Preventive And Strategic Approaches (2013).

[2] Ibid

[3] Sommers, R. (2021). Contract Schemas. Annual Review of Law and Social Science, 17, 293-308.

[4]  See website of LegalZoom, VakilSearch, DIYLaw, Avodocs, LawPadi.

[5] HiiL (2021). Case study on LegalZoom in Delivery Justice Rigorously; Crunchbase company profiling and funding VakilSearch, Last accessed on January 15, 2022.

[6] Ibid.

[7] Haapio, H., Plewe, D. and deRooy, R. (2016). Next generation deal design: comics and visual platforms for contracting. In Networks. Proceedings of the 19th International Legal Informatics Symposium IRIS (pp. 373-380).

[8] See the different types of contracts developed by Creative Contracts on their website; Waller, R. (2020). Visual Contracts for Shell; Booth, Stephen. (2018). Pictorial employment contracts – a legitimate craze or just plain crazy? Mondaque (online platform).

[9] Assy, R. (2011). Can the law speak directly to its subjects? The limitation of plain language. Journal of Law and Society, 38(3), 376-404.

[10] Read about Creative Contracts’ experience of attracting funds here. HiiL’s Justice Accelerator has funded startups in South Africa such as Creative Contracts. Read more about it here.

[11] Burton, S. (2018). The case of plain language contracts. Harvard Business Review; Read about World Commerce and Contracting work on contract design and simplification here.

[12] Haapio, H., Barton, T., & Corrales Compagnucci, M. (Accepted/In press). Legal Design for the Common Good:Proactive Legal Care by Design. In M. Corrales Compagnucci, H. Haapio, M. Hagan, & M. Doherty (Eds.), Legal Design: Integrating Business, Design, & Legal Thinking with Technology Cheltenham: Edward Edgar Publishing.

[13] Mitchell, J. A. (2018). Whiteboard and Black-Letter: Visual Communication in Commercial Contracts. U. Pa. J. Bus. L., 20, 815.

[14] Contract Design Pattern Library by World Commerce and Contracting. As access on January 12, 2022.

[15] HiiL (2021). Case study on LegalZoom

[16] Interview with Sally Guyer and Stephania Passera, dated November 12, 2021.

[17] Waller, R. (2020). Visual Contracts for Shell; Burton, S. (2018). The case of plain language contracts. Harvard Business Review.

[18] Booth, Stephen. (2018). Pictorial employment contracts – a legitimate craze or just plain crazy? Mondaque (online platform).

[19] Creative Contracts – who we are and what we do.Youtube.

[20] Mitchell, J. A. (2018). Whiteboard and Black-Letter: Visual Communication in Commercial Contracts. U. Pa. J. Bus. L., 20, 815.

[21] Working group session on user-friendly contracts, October 21, 2021

[22] Working group session on user-friendly contracts, March 3, 2022

[23] World Commerce and Contracting (n.d). ‘How Shell have transformed their contracts’, Better Contract Design, Last accessed on 15 March 2022.

[24]  World Commerce and Contracting, (2020). Co-designing Indonesian government contracts for the digital age.

[25] See website of LegalZoom and LawPath.

[26] HiiL (2021). Case study on LegalZoom in Delivery Justice, Rigorously,

[27] Ibid.

[28] Giancaspro, MA. 2020. Picture-Perfect or Potentially Perilous? Assessing the Validity of ‘Comic Contracts’. The Comics Grid: Journal of Comics Scholarship, 10(1): 7, pp. 1–27.

[29] Bill No. 18/202, Courts (Civil and Criminal Justice) Reform Bill, 2021, Singapore.

[30] Assy, R. (2011). Can the law speak directly to its subjects? The limitation of plain language. Journal of Law and Society, 38(3), 376-404.

[31]  Relational Contracting, World Commerce and Contracting, last accessed on 17 March 2022.

Table of Contents

Cases

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Case: Avodocs

CASE

Avodocs

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Photo by Avodocs

User-Friendly Contracts – Policy Brief / Case: Avodocs

Key fact and figures

Year of establishment
2019
Type of justice problems addressed
Business
Geographical scope
USA, Canada, South Africa, Ukraine, Netherlands, Germany, Luxembourg, United Kingdom, Estonia, and Lithuania
Legal entity
Private company
Regulatory embeddedness
Independent of the government, no working relationship with the government
Number of staff members
25
Number of users/contracts sold
6000 users
Costs of services for citizens (average and range)
AXDRAFT: Pricing starts at 900 Euros per month per 5 seats or 1200 contracts (depending on the pricing type a client chooses)

Avodocs: We provide free plans, and premium packages starting at $13.9 per month

QuickDocs: Our pricing starts at 750 per month with unlimited number of users and documents
Average processing time (time it takes for a customer to receive the final contract)
>5 minutes to draft a contract

>1 hour to get it negotiated, approved, and signed document

Initial vision

Automated, user-friendly contracts are being increasingly used in the legal sector. They have made legal documents affordable and accessible to everyday people. Avodocs, an online platform, offers user-friendly contracts to start-ups in the USA, Canada, South Africa, Ukraine,the Netherlands, Germany, Estonia, Lithuania and Luxembourg. Founded by two brothers, Oleg Zaremba and Yuriy Zaremba, the company initially catered to start-ups in Ukraine, the homeland of the founders.

Avodocs offers attorney-reviewed legal documents such as Terms of Use, Privacy Policy, NDA, GDPR Policy, SAAS agreement and many more. These documents can be negotiated, stored and e-signed on the platform [1]. More than 4000 start-ups, many of them affiliated with accelerators such as Techstars, 500 Startups and Y Combinator, have used services offered by Avodocs [2].

The idea for document automation germinated in the mind of the founder Yuriy Zaremba while working as a corporate lawyer for a law firm in Ukraine [3]. Yuriy specialised in real estate, mergers and acquisitions and spent a significant amount of time in preparing documents for the same. He noticed the patterns in the documenting process and thought of streamlining and standardising it with the help of technology, which would save time and probability of making errors which is otherwise high in a manual process.

In collaboration with his brother Oleg Zaremba, who was working with Booking.com as a Senior Software Engineer, Yuriy built a document automation platform çalled Axdraft in the year 2017. Soon after, several law firms in Ukraine subscribed to Axdraft to fulfil their document automation needs. This platform preceded Avodocs.

Axdraft developed into a contract lifecycle management platform that allows large enterprises and legal firms to draft contracts expeditiously. It allows for parties to the contract or team members to review and redline a contract, and companies to customise the document to suit their branding style. It uses artificial intelligence to analyse documents [4].  Axdraft became one of the success companies in the LegalTech industry, receiving funding from Overkill, HiiL’s Justice Accelerator and Y Combinator. It was recently acquired by Onit, a software company [5].

After setting up Axdraft, the founders realised that very few legal services in Ukraine cater to documenting needs of start-ups and small enterprises. These start-ups need legal documents to set up a business in Ukraine.  The founders then came up with the idea of Avodocs, a platform that can provide affordable, automated documents to start-ups and small enterprises.

Wanting to improve and expand its product offering, in spring 2021, Axdraft took contract automation further by introducing QuickDocs, a standalone solution for self-service contracts. With QuickDocs, users can set up self-service, 100% compliant document automation workflows for simple contracts (such as NDAs, DPAs, SOC-2 report requests, sales agreements)  that do not require legal review. This solution has already helped companies like Slack, Vimeo, Vanta, and more in reducing the amount of time required in managing simple contracts.

Approach towards contract development

Right from the start, Avodocs was responsive to the needs of customers. The company received suggestions from customers as well as their peers in Y Combinator about the kind of documents they need via the help or support tab on the website. Based on the needs voiced by customers and peers, Avodocs introduced new documents. For instance, customers requested Avodocs to create documents that help in hiring employees and terminating their contracts. To streamline this demand of customers, the company introduced a feature which allowed customers to add names of documents that they need. This data is then aggregated and stored in a separate file, which the company refers to when they are looking to launch a new document.

To understand the customer’s overall experience of using Avodocs,  the company would engage them in a conversation to get feedback. As the company grew, they collected data systematically via surveys which helped the company in improving their services.

Financial strategy of the company

Because the company Axdraft preceded Avodocs, the founders did not have to invest in developing separate technology for Avodocs. Much of the knowhow that went into developing Axdraft was used in Avodocs. A Ukrainian law firm Avellum also helped Avodocs in developing legal products as a part of its corporate social responsibility programme [6]. The founders formed Avodocs without incurring significant expenditure. As a result, Avodocs initially provided much of the legal documents to start-ups at no cost.

Over time,  Avodocs has moved towards charging a modest fee for their products. It has adopted a subscription based, tiered revenue model. Customers can draft 10 documents per month at a cost of $14 per month or can draft unlimited documents for $20 per month. To ensure that cost is not a barrier for start-ups who are just taking off, the company offers 1 document per month with no registration, and 3 documents per month with registration.

The main aim of Avodocs is to provide access to user-friendly and affordable legal documents to start-ups. It received support from its sister company, Axdraft as well as from those interested in corporate social responsibility programmes, which helped the company stay afloat in the initial phase. The fee structure introduced by Avodocs is slowly generating revenue for the company. It’s customer base has gradually expanded, exceeding 4000 clients. Although Avodocs did not take the traditional route an innovation takes in attracting funds, the company gradually devised a revenue model that can generate revenue as well as serve the needs of SME clientele.

Marketing strategy of the company

An off-shoot of Axdraft, Avodocs could not spend large sums of money for paid marketing. Instead, the founders circulated the news about the unch of the company in Ukraine to reporters, who then suo moto publicised the launch of the company across the country. At that time, Ukraine was undergoing a political crisis with the annexation of Crimea by Russia. So media outlets and everyday people, welcomed positive developments such as the launch of a company like Avodocs that provided free services.

After Axdraft Avodocs found clients for its contracts and documents  among start-ups that were funded by HiiL’s Justice Accelerator, Overkill and Y Combinator’s cohort of start-ups, the other start-ups that were funded by the three accelerators purchased the documents they required to set up their businesses from Avodocs [7]. This way, the company got exposure to clients.

Word of mouth publicity and the platforms provided by the different accelerators that funded Axdraft benefited Avodocs in attracting users. It did not undertake separate paid marketing to gain more traction in the market. To this point, Avodocs has reached break even and is witnessing an influx of new users through organic acquisition only.

Role of enabling environment in the growth of the company

In Ukraine, where Avodocs was launched, the company did not face any challenges from the bar associations, lawyers or government. Even when the company ventured in other European countries or the USA, it did not face any challenges from the regulatory authorities. The company benefited from the changes in regulations in the USA brought out by LegalZoom’s battle with several state bar associations, which led bar associations to support online providers of legal services.

Avodocs faced a challenge while raising funds from investors in Europe. The company notes that there is a marked difference in the fundraising culture among investors in Europe and USA. Investors in the USA process funds and conduct due diligence at a fast pace, as compared to their counterparts in Europe. One reason for this is that Europe has stricter regulations when it comes to funding start-ups, unlike the USA where regulations are relatively more relaxed.

Lessons learnt

Lessons that can be taken from the experience of setting up Avodocs are:

  • Cooperation between team members and between co-founders themselves and identifying and overcoming challenges together as a team contributes the most to the success of your company early on.
  • When competing with large companies, start-ups have the advantage of being able to make decisions quickly and therefore launching products at a faster rate than large, established companies can.
  • Focus on improving one product before moving on to another product.

Critical Success Factors

Factors that played a critical role in the success of Avodocs are:

  • Avodocs benefited from the technological platform that the founders built for Axdraft thanks to which the founders did not have to invest more money in developing the core technology used in Avodocs.
  • Platforms provided by accelerators such as Overkill, Y Combinator and HiiL gave Avodocs access to other fellow innovators who then used its products, thus attracting users to Avodocs.
  • The founders actively interacted with users and collected feedback during the initial stages of Axdraft’s growth. This feedback was useful to the founders in understanding the kind of documents enterprises need and how to develop various aspects of their products. They carried forward these learnings of product development while setting up Avodocs, which again saved the founders a considerable amount of time and effort.

Authors

 This case has been developed by Manasi Nikam from the HiiL team after interviewing Oleg Zaremba on October 21, 2021.

This exploratory piece is based on an interview with Oleg Zaremba, October 21, 2021.

[1] Avodocs, Pricing. As accessed on January 14, 2022.

[2] Bernard, T. (2019). Extra Crunch members get free start-up legal documents from Avodocs.

[3] Palchinska, L. (2017). Ukrainian start-up Axdraft has automated the preparation of legal documents. And I learned how to make money, AIN.

[4] Facebook, About Axdraft. Last accessed on 24 January 2022

[5] Zaremba, Y. (2020). Axdraft has been acquired by Onit company. Last accessed on 24 January 2022.

[6] Yarova, M. (2018). Ukranians have launched a free service that will help entrepreneurs draw up the necessary document, AIN.

[7] Magnetic Latvia, (2020). Overkill alumni Axdraft joins Y Combinator.

Table of Contents

User-friendly contracts - Policy brief
1. A Better Contracting Experience
2. Critical Success Factors
3. Outlook

Cases:

Posted on

Case: World Commerce and Contracting

CASE

World Commerce and Contracting

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Photo by World Commerce and Contracting

User-Friendly Contracts – Policy Brief / Case: World Commerce and Contracting

Key fact and figures

Year of establishment
1999
Scope of service
Professional Membership Association, Research Body, Education, Events, Advocacy
Geographical scope
Global
Legal entity
Not for profit organisation
Type of justice problems addressed:
Business and money
Relationship with the government
Independent of the government
Number of affiliated staff members
40
Citizen satisfaction
Clients report reduction in time required for negotiating and finalising contracts and a surge in the number of terms that the opposite party accepts.
Annual Budget
$6m

* All figures refer to 2019 unless otherwise stated

Introduction

World Commerce and Contracting is a not-for-profit organisation that promotes trading relationships. Previously known as the International Association for Contract and Commercial Management, the organisation’s overarching goal is to develop better contracts that have terms and conditions that are suitable to the growth of both parties. It “seeks to transform contracts and the contracting process, such that they become instruments of fair dealing, that they themselves, and the process surrounding them, generate economic benefit and social inclusion” [1]. The organisation positions contracts as not just legal documents that “provide legal protection and remedies in the event of a dispute” but also as “critical economic instruments” [2].

To achieve those objectives, the organisation offers contract design and simplification services. So far, the organisation has partnered with companies such as Shell, Accenture, Airbus, Schneider Electric and many others. It recently partnered with the Government of Indonesia to redraft its procurement form because suppliers found it difficult to understand the document in its current form which prevented them from doing business with the government [3]. The website of World Commerce and Contracting showcases examples of user-friendly contracts that it has designed in the past.

The not-for-profit organisation was formed in 1999 by a group of leading multinational technology and telecommunications companies who wanted to develop contracts that are simple and time saving that they can use for sales and procurement purposes in various countries. Thereafter, the organisation hosted conferences, webinars, training programmes and published reports on Contract and Commercial Management. In these initiatives, the organisation addressed several aspects of contracts, such as most negotiated terms in a contract, supplier relationship management, contracting in the public sector and so on [4].

In this case, we are going to focus on the research and advocacy that World Commerce and Contracting has done to develop and promote the use of user-friendly contracts. World Commerce and Contracting collaborated with academics Helena Haapio and Stephania Passera to develop contracts that are easy to understand, look attractive and are user-friendly. They started off by comparing visual contracts developed by them with traditional contracts. They wanted to learn about the preferences of users. This research led to several workshops, research papers and other activities that caught the attention of businesses that were considering deploying user-friendly contracts. So the team went from conducting research on the design of contracts to doing consultancies and projects [5].

Gradually, World Commerce and Contracting collaborated with several graphic designers, plain language writers and thought-leaders on contract design such as Robert de Rooy, Mark Stanton and Daphne Perry [6].

Contract Design and Simplification

While redesigning and simplifying contracts, World Commerce and Contracting refers to the below criteria:

  • Plain language, simplified design and a user-friendly approach allowing greater inclusivity and accessibility.
  • The contract is clear, well-structured and visually appealing.
  • Human-centred - placing the reader's needs and abilities first.
  • There is a clear intent to enhance transparency, aid communication and engender trust.
  • The overall approach promotes ease of doing business.
  • There is a coherent alignment with an organisation's brand and tone of voice [7].

To make contracts visually appealing and easy to understand, the organisation suggests adding visuals such as flowcharts, icons, symbols and images. It has developed an open source online library called “Contract Design Pattern Library” that collects contract design patterns to guide those who are interested in crafting simple and visually appealing contracts. With the help of these patterns, users can better organise the information so that contracts become more readable and easy to understand and implement. The library offers guidelines and examples of contract visualisations that users can draw upon. There are patterns on navigation that help users find the information they need and patterns that can change the tone of voice such as comics contracts or contracts that are depicted as a conversation. It also includes patterns that show what kind of layouts can be used in a contract or the way information can be emphasised upon. Users can also add their own patterns to the library [8].

World Commerce and Contracting also simplifies the terms and clauses of a contract by removing unnecessary clauses. It identifies what terms, clauses and conditions are fair and balanced in terms of contractual position so that contracting parties start off from the right position [9]. The organisation uses proactive law, an emerging concept in law, to develop contracting terms. Proactive law, derived from preventive law,  “aims at vaccinating business people against the disease of legal trouble, disputes, and litigation. The goal is to build a protective system or a defence mechanism that makes the corporate client, its management and personnel, strong and resistant; keeps them in good legal health and immune to the legal risks inherent in business [10].”

“Proactive law focuses on balancing risk and reward, achieving desired outcomes, eliminating causes of problems, shared care and team approach and lawyers supporting client’s self-care” [11]. In practice, it means that instead of focusing on disputes and remedies, and minimising risks and maximising benefits, the contracts will focus on how both parties can achieve common goals and benefits [12].

Enabling environment and shifting mindsets

Visual and plain language contracts have been held legally enforceable by justice systems throughout the world. Judges, academics and lawyers alike have validated the use of visuals and plain language in contracts. Australian judge Robert French states that as long as the meaning of pictures in the contracts is clear, the contract is binding. Australian academic Camilla Anderson has also spoken in support of contracts that use visuals, images, illustrations and plain language [13].

However, people hold reservations about the legal enforceability of the contract. World Commerce and Contracting receives several questions about the legal enforceability of their contracts from potential customers. This indicates that although the regulatory bodies are ready to accept these new-age contracts, people have misconceptions about them or that there is a lack of awareness among them. They fear that simplifying the contract will water down the efficacy of the agreement [14].

Sally Guyer shares an anecdote of how the legal department of a company World Commerce and Contracting was collaborating with overcame the fear of the legal efficacy of the contract being reduced. She says,

“We were going through an agreement with lawyers of World Commerce and Contracting and that of the company to which we were providing the contracts. One of the lawyers on the other side said - You go ahead. Design and simplify the contract. But don’t touch the limitations and liabilities clause. - We went ahead with this plan and then presented this contract to the lawyer. Then he saw the limitations and liability clause in comparison to how the rest of the contract was written. He agreed that it looks really stupid and then changed the liabilities clause to look like the rest of the contract [15].”

In the same vein, World Commerce and Contracting has been able to bring on board sceptics of user-friendly contracts by showing them two types of contracts, one traditional contract that’s filled with text and legalese and the second being the redesigned, user-friendly contract. Once the lawyers or companies see how the same contract can be redesigned to make it easy to understand, they are more likely to accept the idea. Moreover, companies that World Commerce and Contracting has worked with in the past are satisfied with the legal enforceability of their contracts [16].

Measuring outcomes

Some of the companies for whom World Commerce and Contracting has redesigned contracts have measured the impact of using such a user-friendly contract. They report that negotiation time is reduced by half, increases in the number of terms that the other party accepts and fewer revisions to the contract made by the opposite party. However, not all companies have measured the outcomes and those who have measured it, do it on an ad hoc basis, not regularly or systematically [17].

Funding and scaling strategy of the organisation

World Commerce and Contracting generates revenue by conducting physical and virtual events, research projects and membership fees from member organisations [18]. providing consulting services on contract design and simplification. It also sells a Better Contract Design mark to companies who have their contracts evaluated on their user-friendliness. The Better Contract Design Mark evaluates companies on following criteria: language (plain words, readability, directness), design (legibility, graphic elements, structure, impression), usability (relevance, coherence, action) and relationship (who from and to, points of contact, audience fit) [19]. Companies who have consulted World Commerce and Contracting for the Better Contract Design Mark include Shell, Airbus, Accenture, Schneider Electric and many others [20]. But all in all, the focus of World Commerce and Contracting is not on generating revenue, but doing advocacy for such contracts. The organisation conducts events, conferences and workshops to train people in using tools and techniques that can help them in crafting  user-friendly contracts. In the near future, World Commerce and Contracting aims to support innovators from low income countries who have new ideas on crafting better contracts. For that, World Commerce and Contracting is setting up a charitable organisation that is based in the USA [20].

Critical Success Factors

World Commerce and Contracting believes that for user friendly, simplified contracts to become the norm, law schools and legal professionals need to embrace principles of human-centred design for contracts as well as proactive law [21]. It identifies the following measures that legal professionals and law schools can take for the same.

  • Law schools can play an important role by training students in understanding the need for simplified contracts. Currently, law schools teach contract law using case law and case studies which describe specific instances where contracts were mishandled or were led to expensive disputes. Students do not receive training in how to draft a contract in a law school. If a component of legal education addressed this aspect of communicating needs and interests of disputing parties, risks involved for both parties and the style in which they are communicated, contract design will make a lot of progress in terms of promoting relationships and growth in businesses [22].
  • In case of law firms, the current business model continues to favour the status quo, preventing the use and adoption of user-friendly contracts. The law firm business model, which generates revenue by charging a client by the hour, unwittingly benefits from the way contracts are being currently drafted. The emphasis that contracts put on legal language and covering all possibilities and situations even if the chances of them occurring are nearly zero, increases the amount of time lawyers spend on drafting contracts. The increased duration results in higher revenue for law firms and therefore takes away the incentive for law firms to adapt themselves to the new-age user-friendly contracts. Although some law firms have begun to tackle contract visualisation, their approach to visualisation does not include anything more than basic aesthetics and styling [23].
  • Multi-disciplinary teams are necessary to institutionalise contracts. For example, to mainstream contract design in a law firm, a law firm needs to hire an experienced information/concept/communication designer who can ask the lawyers the right questions. Information designers try to understand the content before they think of how to present it to the viewer, and then depending on the characteristics of the viewer present the information in a way that is most clear and accessible. They have a human-centred approach to designing information.

They ask relevant questions such as, ‘’Do you even need all these clauses in your contract?”, “How is this contract used?”, “ What is it for?”, “ Who uses it?”, “ What is it that you are trying to achieve?”, “ What purpose this this clause serve?”, “How does it help both sides?” and so on.  Once the lawyers and the designer have satisfactory answers to these questions, the work on all language simplification, information structuring and inserting graphics and visuals begins”.

This approach departs from the traditional way that lawyers craft legal documents, where they prioritise following jurisdictional guidelines and rules and covering all risks and possibilities. Whether the owner of the document can understand the information in the document is of secondary importance to the lawyer, and more often than not, it is of little importance for as long as the document is securing the client from all risks and is legally enforceable [24].

Authors

This case has been developed by Manasi Nikam from the HiiL team after interviewing Sally Guyer and Stephania Passera on November 12, 2021.

[1] World Commerce and Contracting, About. As accessed on 26 February 2022.

[2] World Commerce and Contracting, Advocacy. As accessed on 26 February 2022.

[3] World Commerce and Contracting, Better Contract Design. As accessed on 26 February 2022.

[4] World Commerce and Contracting, Our Story on About web page. As accessed on 26 February 2022.

[5] Interview with Sally Guyer and Stephania Passera, November 12, 2021.

[6] Ibid.

[7] World Commerce and Contracting, Better Contract Design. As accessed on 26 February 2022.

[8] World Commerce and Contracting, Contract Design Pattern Library. As accessed on 26 February 2022.

[9] World Commerce and Contracting, Contract Design and Simplification. As accessed on 19 March 2022.

[10] Haapio, H. (2010). Introduction to proactive law: a business lawyer’s view. Stockholm Institute for Scandinavian Law, 49, 49-52.

[11] Ibid.

[12] Haapio, H., Plewe, D., & deRooy, R. (2016, February). Next generation deal design: comics and visual platforms for contracting. In Networks. Proceedings of the 19th International Legal Informatics Symposium IRIS (pp. 373-380).

[13] Aurecon, 2018. Australia’s first visual employment contract launched, Blog. As accessed on 17 January 2022.

[14] Interview with Sally Guyer and Stephania, November 12, 2021

[15] Ibid.

[16] Ibid.

[17] Ibid.

[18] World Commerce and Contracting, About. As accessed on 26 February 2022.

[19] Presentation by Sally Guyer to working group members on July 15, 2021

[20] See Better Contract Design on the website of World Commerce and Contracting.

[21] Interview with Sally Guyer and Stephania, November 12, 2021

[22] Ibid.

[23] Ibid.

[24] Ibid.

Table of Contents

User-friendly contracts - Policy brief
1. A Better Contracting Experience
2. Critical Success Factors
3. Outlook

Cases:

Posted on

Case: DIYlaw

CASE

DIYLaw

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Photo by DIYLaw

User-Friendly Contracts – Policy Brief / Case: DIYLaw

Key fact and figures

Year of establishment
2015
Scope of service
Privacy Policy, Non-Disclosure Agreements, Employment Contracts, Tenancy Agreement, Board resolutions
Type of justice problems addressed
Employment and business
Geographical scope
West Africa, Canada, USA, UK
Legal entity
Private company
Relationship with the government
Independent of the government
Number of staff members
19
Number of contracts sold
<700
Customer satisfaction score (if available)
4 out of 5 stars (based on cumulative reviews from surveys)
Costs of services for citizens (average and range)
$4 to $10
Average processing time (time it takes for a customer to receive the final contract)
Instantly

Initial Vision

Lawyers in Nigeria usually prefer to represent and consult for big conglomerates rather than counselling cash-strapped entrepreneurs who were just starting off. Funkola Odeleye and Odunulowa Longe saw this as an opportunity and started a firm called TLP Advisory in 2014 that offered legal advice to startups and entrepreneurs at low rates and to give flexible payment options to entrepreneurs. 

This approach was appreciated by entrepreneurs, but was not sustainable. The demand for the services was very high which made it difficult for the founders to keep up. To ease this problem, the founders decided to automate their services with the help of technology and they launched DIYLaw in 2015. To assist with the technological aspects, the two founders brought on board a software developer- Bola Olonisakin who became their third co-founder. DIYLaw then began offering automated contracts to start-ups in Nigeria. 

What sets DIYLaw apart from its counterparts who also offer automated documents is its use of plain language. The contracts that DIYLaw provides are stripped of the legalese. They are simple to understand and easy to use. The platform also allows people to get in touch with lawyers through DIYLaw, in case they feel it is needed. 

Approach towards developing a contract

DIYLaw tries to design products according to the needs of the people. The team regularly interacts with the customers to understand their legal needs based on which the services are updated. Design and content of contracts is also modified based on feedback received from customers.

The product manager surveys with an existing group of customers to get their views on a list of new products/features that the company wishes to launch. Based on the preferences of the customers, the company develops a contract template. To test the effectiveness of the template, the company conducts another survey with the customers. In this way, the product manager elicits feedback from the customers and works with the legal and technical team to deliver the final contract to people. Founder Funkola Odeleye says,

“We try to make sure that we develop products that customers want and not what we think the customers want.”

DIY Law also monitors data analytics of blogs that the company publishes. Based on that, the team deduces the legal problems and services that businesses most need help with and accordingly delivers services.

To measure the satisfaction level of customers with the process of drawing a contract, the technological platform and customer service, DIYLaw sends a survey to a customer two weeks after a customer purchases a service. This feedback of customers is aggregated into a quarterly report.

The company also tries to assess the effectiveness of the contract that the customer purchased. For example, every six months it asks if the employment contract was useful to them in successfully onboarding employees. One obstacle in assessing the outcome or impact of the contracts is that it is difficult to identify the parameters that can be used to monitor the outcomes. This has been the experience of other online contract providers as well [1].

Marketing strategy of the company

When DIYLaw had just been launched, the company invested in a few paid social media advertisements. However, funding constraints did not permit the company to market their services aggressively. Instead, the company relied on word of mouth publicity, social media engagement and strategic partnerships to generate users.

The company publishes tips and articles on social media platforms such as Instagram and Facebook. These articles provide basic legal information to people for free. This attracts people to the company’s social media profiles and creates awareness about its services among the public. A few popular people who work in the creative sector have also used social media to promote DIYLaw among their followers. 

Another way in which the company tries to attract customers and market their products is by forming partnerships with financial institutions and entrepreneurial support organisations. These financial institutions and organisations obtain the documents  such as registration of business, memorandum and articles of association of the business and documents related to corporate governance for their customers from DIYLaw. They also advertise DIYLaw to their own customers via newsletters.

Financial strategy of the company

DIYLaw was awarded two grants which became the main source of funding for the company. In 2015, DIYLaw won the SME empowerment challenge conducted by HiiL. That opened doors for the company. Investors became interested in funding the company. But DIYLaw did not take advantage of these opportunities because there was no alignment between the company and prospective investors.

Of those who were willing to invest in the company, some wanted DIYLaw to drastically increase their prices in order to scale the business. The founders were averse to taking such a step given that their target market – start ups in Nigeria – would not be able to afford their services. As a result, the founders did not take advantage of funding from investors and bootstrapped themselves to run the company. As Funkola Odelye says,

“We wanted to create more impact and not just earn more money.”

In 2020, Cartier Women’s Initiative awarded DIY Law a grant. Over a period of time, the company attracted customers and generated revenues. Today, the main source of income for DIYLaw is registration of businesses, trademarks, IP, tax numbers. Customers can purchase each of these services or products for a fixed fee. In future, DIYLaw plans on switching to a subscription model where customers can access contracts for a yearly fee. These contracts will be updated to reflect any changes that may take place in the law. As of now, the company informs customers of changes in the law via email.

Role of enabling environment in the growth of the company

The founders of DIYLaw anticipated resistance from the regulators, lawyers and bar association in Nigeria when they launched DIYLaw in the country, based on their counterpart LegalZoom’s experience in the USA. LegalZoom, a company in the USA that offers automated contracts was taken to court several times by lawyers because in the USA, only lawyers are permitted to provide legal services. The company also faced a long drawn battle with the Bar Association of South Carolina regarding the same [2].

So the founders were pleasantly surprised when the bar association, attorney generals and lawyers in Nigeria were welcoming of the services provided by DIYLaw. A few lawyers have even used DIYLaw to draft contracts for their clients. They have also shown interest in providing legal advice to customers via the DIYLaw online platform. This willingness of lawyers to embrace DIYLaw as a tool that supports their own work, and not perceive it as a competitor is a welcome change and a step in the right direction.

DIYLaw has also collaborated with the regulatoratory bodies in the country. It participates in the conferences on legal technology organised by the Bar Association. Law schools in Nigeria also use the company as a successful case study on legal technology.

Even so, the founders have taken efforts to abide by rules and regulations set out by regulators to providers of legal services.  For example, the company has added a disclaimer on their website that the services  provided by DIYLaw do not constitute legal advice.

All in all, DIYLaw has witnessed a rather supportive environment from lawyers, judges, the bar association, despite its earlier reservations.

Lessons learnt

Lessons that can be taken from the experience of setting up DIYLaw are:

  • DIY Law missed an opportunity to take advantage of investor funds when it could not find alignment with proposed investors.
  • It is difficult to keep products and services affordable for everyday people and still attract funds from investors — who more often than not want to increase the price of the products.

Critical Success Factors

Factors critical to the success of DIY Law are as follows:

  • Understanding needs and requirements of customers through surveys and face to face interactions helped DIYLaw in tailoring its products and making them commercially viable.
  • Strategic partnerships and social media platforms helped the company in expanding its customer base.

Authors

This case has been developed by Manasi Nikam from the HiiL team after interviewing Funkola Odeleye on October 25, 2021.

This exploratory piece is based on an interview with Funkola Odeleye, October 25, 2021.

[1] Read our case study on HiiL, (2021). Case study on ‘LegalZoom’ in Trend Report Delivering Justice, Rigorously.

[2] Ibid

Table of Contents

User-friendly contracts - Policy brief
1. A Better Contracting Experience
2. Critical Success Factors
3. Outlook

Cases:

Posted on

Case: Comic Contracts

CASE

Comic Contracts

South Africa
Download
Photo by Creative Contracts
User-Friendly Contracts – Policy Brief / Case: Comic Contracts

Key fact and figures

Year of establishment
2017
Scope of service
Topics on which contracts are offered:
  • Employment Contracts
  • Outgrower Agreements
  • Photographic Consents
  • Medical Research Consents
  • Financial Services Provider Agreement
  • Funeral Insurance
  • Renters Insurance
  • General Insurance
  • Grant Agreement
  • School Contract
  • License Contract
  • Non-disclosure agreement
Target audience
  • Marginalised / illiterate / vulnerable people
  • General public
Type of service:
  • Simplify, easify
  • Illustration and Design
  • Translation
  • Communication
    • Print
    • Digital
  • Posters
Geographical scope
Worldwide
  • Africa (South Africa, Zambia, Kenya, Tanzania, Ghana, Côte d’Ivoir, Tunisia)
  • Australia
  • Europe (UK, Netherlands)
  • South America (Brazil, Asia, Thailand)
Legal entity
Private Limited company, registered in South Africa
Type of justice problems addressed
Employment and business
Relationship with the government
Independent of the government
Number of affiliated staff members
Insourced:1 permanent, and 2 part time.
Outsourced: 3 illustrators, 3 designers.
Number of contracts sold or number of clients that have purchased contracts
±110 contracts sold to ±30+ clients
17,000 people so far who have signed the contract.
Citizen satisfaction
Strong anecdotal evidence of satisfaction, no formal surveys
Costs of designing a contract
Average €8000 per contract template – Range between €2500 and €15000
Average time required to redesign a contract
2 months, including client feedback times.
Annual Budget
± €100,000

Initial vision

Robert de Rooy, the founder of Comic Contracts, was working as a legal advisor to an agricultural company in South Africa when he became interested in improving contracts. While doing research on contracts, he came across literature that suggested the use of pictures and visuals to support textual information, such that the latter is held binding and the former only plays a supporting role. Robert thought that a contract that has a lot of textual information, excludes a large number of people in South Africa, given that many people are not literate or work as migrants so they are not familiar with the local language. They may not understand the rights and duties mentioned in their employment contracts. On the other hand, images are understood by everyone, they are universal.

Although the government of South Africa had tried to address this problem by requiring plain language explanations to be provided along with contract terms, the needs for those who were not literate still not met. With this thought, Robert started off by creating a contract for domestic workers and also on the topic of loan agreements. These efforts culminated in a full-fledged employment contract in the form of a comic for the agricultural company where Robert worked as a legal advisor. This comic contract illustrated essential elements of a contract for farm workers such as working hours, wages, leave policy and other terms of employment with the help of visuals. His venture of comic contracts led him to set up the company Creative Contract in South Africa.

According to Robert, different kinds of people can benefit from comic contracts. He says,

“The main target audience of Comic Contracts is the vulnerable, marginalised and illiterate people. There are also those who do not speak local languages or the language of the country or region where they work, or those who can read only with enough time and support, or those that can read but feel intimidated by the walls of legal text and jargon. Even literate people benefit from reading information that is presented in a way that is visually appealing, easy to understand and easy to remember”.

So far, Robert has developed comic employment contracts for fisheries, domestic workers, agricultural workers, schools, and financial services. He has also drafted other legal documents such as licenses, grants, consents and basic insurance forms in the form of a comic.

Process of product development

In the beginning, Robert set up his own team of illustrators, cartoonists and artists, to illustrate contractual terms in the form of a drawing or visual. Because this process took a lot of time and effort, he eventually employed a professional studio that had experienced writers, illustrators and designers. This collaboration proved fruitful as the team brought an understanding of the illustration process, attention to detail and accuracy which was essential when illustrating legal concepts.

Prior to the involvement of the illustrators, Robert has to draft a script of the visual contract,  review the text, clarify it, and describe in broad terms what must be illustrated. Thereafter, the  illustrators do a rough sketch of the contract terms and prepare a basic design lay-out. Then, Robert reviews this contract with the client. After getting approval from the client on the sketch of the contract, the team would do the fine line drawings of the sketches, add colour and improve the design lay-out. Again, he would review these with the client, after which the team  added the finishing touches, adding shading, logos, details, etc, and then do translations of the headings, and any text.

User-testing

Testing the contracts on intended users has been a challenging task. Robert and his team tries to reach out to end-users of the contract such as employees of the company and get their feedback. But since his client companies are located in different countries, the end users of the contract could not always be reached. Restrictions on movement brought about by the Covid-19 pandemic have exacerbated this problem. At times, the team has tried to resolve this bottleneck via intermediaries who interact with the end-users and request their feedback, but this approach has been difficult to replicate given that Robert and his team are based in South Africa and essentially work remotely.

Integration of legal and design thinking

Robert brings in the legal expertise and his team of illustrators bring expertise from graphic design. He explains to the illustrators how he visualises a certain legal concept. The illustrators then draw the idea on paper. They also give feedback to Robert when required after which Robert improvises on the nature of the visualisations. All in all, it is an iterative process. One of the challenges at this stage is communicating needs and requirements in a multidisciplinary team of lawyers and illustrators.

Submission Problem

Robert works with companies who are primarily responsible for providing the contract to the other party as a result of which the company can determine the design of the contract. For example, fishing and agricultural companies can independently decide on the nature of the employment contract that they want to offer to their employees. Moreover, the visual contract is accompanied by a voice-over that explains the content of the contract orally, to mitigate any challenges that a visual contract might pose. Thus, the companies do not experience a submission problem where the other party is unwilling to accept this particular form of contract.  

Role of enabling environment in the growth of the company

The regulatory authorities in South Africa — the primary market for Robert’s Comic Contracts — have not posed any barriers to the growth of Robert’s business. Through his network, the idea of comic contracts has gained traction in other markets. Aurecon, an engineering consulting firm based in Australia, now offers employment contracts to its employees in Australia, New Zealand and Philippines in the form of a comic strip [1].  The Chief Justice of Australia, Robert French AC has spoken in support of comic contracts. He holds them as legally enforceable for as long as they can be interpreted and are meaningful [2].

Since the comic contracts depart from the way the formal justice system has traditionally designed contracts, Robert initially had concerns about whether they will be held legally enforceable. So he consulted several lawyers in South Africa to test their validity and legal enforceability. He ensured that the contracts abide by general legal principles or the rules and regulations of a certain jurisdiction. If requested by the clients, Robert and his team also provide a contract explainer to explain the visuals used in the contract.

Marketing strategy of the company

Although Robert de Rooy has not invested resources in paid marketing methods, he has participated in several conferences on the topic of innovating contracting methods and improving business relationships. He has collaborated with several academics from all over the world and co authored research papers to promote the idea of comic contracts. The awards that comic contracts received from HiiL’s Justice Accelerator and World Commerce Contracting for being innovative also helped in attracting attention in the business world. Lastly, many of the customers of Creative Contracts come to know about it via word of mouth.

Financial strategy of the company

Robert and his team have found financial support for employment contracts in the form of large corporations who purchase the contracts for their employees. HiiL’s Justice Accelerator has also provided a grant to the company in the past. However, provider and clients. This is because although people are willing to adopt new ideas such as comic contracts, they want to see a proof of concept prior to purchasing it or investing in it as. People hesitate in adopting the idea of comic contracts, because its a new concept and departs from the way contracts are traditionally drafted,  In that regard, comic contracts are still trying to gain a foothold in the contracting industry.

Secondly, attracting funds from investors has been difficult because investors are interested in funding a predefined template of a business model, which Creative Contracts does not fit into. Furthermore, investors want to understand the outcomes or impact that the contracts provide to contracting parties. To some extent, Creative Contracts has collected anecdotal evidence of the impact comic contracts have on farm workers, but to measure these outcomes systematically is a challenge unless the client company is interested in measuring impact of the contracts.

Process of scaling the business

Creative Contract’s main value proposition is making contracts easy for the users to understand. The problem is that the users are the marginalised and vulnerable, and they are not the paying client. So although there are definitely very compelling value propositions for the paying clients, these are not immediately commercially viable. So comic contracts struggled in attracting customers.

In order to decrease the handling costs for the client company, Robert de Rooy developed a digital comic contract. This reduced the printing and distribution cost for the client company and made the contracting process faster and more efficient than before. End users can sign the contract online and then it can be printed. Given that the end users are low-skilled and illiterate people the digital contract is accompanied by a voice over. For companies that employ a large number of people, such as fisheries and agricultural companies, digital employment contracts can save a lot of time.

Lessons learnt

Lessons that can be taken from the experience of setting up Comic Contracts are:

  • During the ideation phase, lack of adequate funding posed a challenge in kick starting the venture. Although the founder invested own funds into the venture, to fully operationalise the concept and to enlist support of artists and illustrators, the founder felt the need for donor or investor support.
  • Some client businesses are embracing visual contracts but despite the growing support for the legal validity of this concept, the majority of businesses still prefer using traditional contracts. So a mindset change among the business community is necessary for the demand of comic contracts to increase.
  • The demand for visual contracts will also benefit from a mindset shift in the legal profession. Although comic contracts are held to be legally enforceable, a large section of the legal profession is still sceptical about this idea. This is evident from the fact that very few lawyers offer comic contracts to their clients.
  • One of the challenges in scaling and funding comic contracts is the lack of investor support. Despite being legally enforceable and commercially viable, the concept of comic contracts has not found many takers in the investor community because investors seek business models that fit a predefined template, which Creative Contracts, the business entity that provides comic contracts, does not fit into.
  • Investors also want to see the outcomes or impact of contracts for both parties to the contract. But as described before, measuring outcomes for a third party provider such as Creative Contracts is difficult.

Critical Success Factors

Factors that played a critical role in the success of Comic Contracts are:

  • Critical to scaling comic contracts was also the financial support that Robert de Rooy was able to garner through the agricultural company he worked for. With their support, Robert could flesh out the idea of comic contracts in a full-fledged manner. The agricultural company saw value in comic contracts because the employees were not literate and would benefit from a visual contract. In other words, approaching a stakeholder who benefitted from immediate gains helped comic contracts in scaling.
  • Comic contracts, like the concept itself, did not follow the traditional path to gaining recognition or achieving scale. Instead of paid marketing, it was academic and business conferences that helped them in gaining visibility. Similarly, it gained customers via word of mouth publicity and not via paid advertising.
  • By digitising the contracting process, Robert de Rooy was able to reduce the amount of effort and time to be invested in the contracting processes.

Authors

This case has been developed by Robert de Rooy with suggestions from the HiiL team.

[1]Aurecon (2020). Aurecon rolls out visual employment contracts in the Phillipines.

[2] Giancaspro, MA. 2020. Picture-Perfect or Potentially Perilous? Assessing the Validity of ‘Comic Contracts’. The Comics Grid: Journal of Comics Scholarship, 10(1): 7, pp. 1–27.

Table of Contents

User-friendly contracts - Policy brief
1. A Better Contracting Experience
2. Critical Success Factors
3. Outlook

Cases:

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