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.
Another 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.
