Andrew Abramowitz, PLLC

attorney at law

Follow Us on LinkedInFollow Us on RSSFollow Us on E-mail
  • Home
  • Practice
  • Our Team
  • Fees
  • Blog
  • Contact

Checklists as an Alternative to Form Agreements

June 30, 2014 By Andrew Abramowitz Leave a Comment

I’ve always simultaneously been impressed and confused by attorneys who maintain massive paper form files of each major type of agreement that they are commonly asked to draft. Impressed because this involves some discipline in thinking past just getting the current deal done, but confused because of the impracticality of this approach. If, for example, you’re looking to insert a shotgun buy-sell provision in an operating agreement between two 50/50 partners, it’s not the most efficient use of your time to thumb your way through your form file of 157 operating agreements to find the one or two that had that provision. If you have the ability to electronically search for keywords within your Word documents, that can sometimes be a quicker way to locate that odd provision, but only when there are unusual words or phrases involved.

The questionnaireAnother approach is to have a single form agreement that incorporates most of the possible alternative provisions that you could reasonably expect to see. This is the approach taken by the NVCA open source venture forms. While this solves the problem of being able to locate provisions you need, it is incredibly labor-intensive to put this kind of form together and keep it updated.

An alternative approach is to abandon the idea of form agreements and instead develop a checklist for each type of agreement you’re drafting. For example, if you had a checklist for an LLC operating agreement, there would be a section dealing with how the company would be managed. You could have a series of questions like whether the company is member- or manager-managed, whether passive investors have any “major decision” veto rights and whether a board of managers required unanimity for any decisions. Then, instead of presenting the applicable provision right there in the checklist, you’d just list the agreements you’ve done in the past that contains the applicable provision and note the section number. A checklist like this takes a relatively small amount time to update for each new agreement, and you have the immediate ability to locate that obscure provision.

Facebooktwittergoogle_plusredditlinkedinmail

Related posts:

  1. Equity as an “Expensive” Form of Financing
  2. Developments in Form Agreements
  3. The Phantom Equity Alternative

Filed Under: Legal Practice Advice

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Search the Blog

Blog Topics:

  • Crowdfunding
  • Financing Transactions/Securities Offerings
  • General Corporate/M&A Matters
  • General/Miscellaneous
  • Interesting Reads Archive
  • Legal Practice Advice
  • SEC Disclosure Matters
  • Startup Matters
  • Uncategorized

Press Coverage

"Andrew Abramowitz, a lawyer in Manhattan who has worked with both buyers and sellers of private placements, said every investor should approach a private placement skeptically." -- Paul Sullivan (New York Times)

» Read more

"If the goal [...] is to protect people from losing all of their money in an illiquid investment, the current standard fails on that count, too. Andrew Abramowitz, a lawyer in Manhattan who has worked with both buyers and sellers of private placements, said a better standard might be to limit how much of their net worth people can invest." -- Paul Sullivan (New York Times)

» Read more

Sign up for Andrew Abramowitz, PLLC's Quarterly Newsletter

Your contact information is never shared or sold to any third-party.
* = required field

Browse the Blog

  • Crowdfunding
  • Financing Transactions/Securities Offerings
  • General Corporate/M&A Matters
  • General/Miscellaneous
  • Interesting Reads Archive
  • Legal Practice Advice
  • SEC Disclosure Matters
  • Startup Matters
  • Uncategorized

Rankings & Awards

Ranked #7 nationally issuer legal counsel for total dollars advised in a PIPE transaction. (PrivateRaise.com January 2016)

Find & Follow

Follow Andrew Abramowitz, PLLC on LinkedIn.

Contact Info & Directions

©2016 Andrew Abramowitz, PLLC. All rights reserved. | 565 Fifth Avenue, 9th Floor, New York, New York 10017 | Legal Disclaimer