Contracts are the backbone of commerce, but they often create friction, delay, and unnecessary expense. In Season 10, Episode 7 of “Notes to My (Legal) Self,” I sat down with Jake Stein, co-founder and CEO of Common Paper, to explore how standard contracts can transform the way businesses negotiate, close deals, and manage obligations. Jake’s journey from tech founder to legal innovator offers valuable insights into the challenges and opportunities of standardization in the legal field.
Here’s what we learned about why standard contracts matter and how they can reshape the way we do business.
A Technologist Tackles Legal Complexity
Jake Stein isn’t a lawyer, but his professional life has been shaped by legal interactions. As a co-founder of two software companies, he witnessed firsthand how commercial contracts often create friction between businesses. What should be a happy moment — two parties agreeing to work together — often devolves into adversarial back-and-forth negotiations, driven by competing templates, risk allocation, and lengthy redlining processes.
“It’s not about the people,” Jake emphasized. “It’s about the system.” The current system of bespoke contracts for every deal is opaque, time-consuming, and expensive, leaving businesses stuck in a loop of inefficiency. His frustration with this reality, coupled with a deep respect for the potential of standardization, inspired him to create Common Paper.
Why Standardization?
The concept of standard contracts isn’t new. Jake points to examples like the SAFE (Simple Agreement for Future Equity) for startup fundraising, the ISDA Master Agreement for financial derivatives, and even Pennsylvania’s standard residential real estate contract. These standards reduce negotiation time, create clarity, and foster trust between parties.
Jake sees standard contracts as the “free lunch” of legal innovation. They benefit both parties by focusing negotiation on key variables while eliminating wasteful debates over standard terms. As he explained, “Standards help everyone help each other. They’re a rising tide that lifts all boats.”
When Do Standards Work Best?
While not every contract is ripe for standardization, certain characteristics make it a perfect fit:
- High Volume, Similar Terms. Contracts that are executed frequently and involve predictable terms — like NDAs or sales agreements — are ideal for standardization.
- Streamlined Variables. Agreements with a few key negotiable points (like pricing or liability caps) benefit from having a fixed foundation.
- Complexity Meets Scalability. In industries like technology, standards often simplify highly complex processes (e.g., APIs or email protocols), allowing participants to focus on innovation rather than mechanics.
Jake noted that bespoke contracts will always have a place, particularly in unique or high-stakes transactions like M&A deals. But for repeatable, predictable agreements, standards are a game-changer.
Standards Aren’t The End Of Negotiation
One common misconception is that standard contracts eliminate negotiation. Jake clarified that this isn’t the case. “Standardization doesn’t mean no negotiation — it means focusing the negotiation on what matters most,” he said.
For instance, Common Paper’s contracts include a cover page where parties can customize key variables like pricing, payment terms, and risk allocation. By anchoring the negotiation in a shared framework, parties save time and avoid unnecessary disputes over boilerplate language.
Accelerating Deals And Evolving Legal Work
One of the biggest benefits of standard contracts is their ability to shorten deal timelines. The more widely adopted a standard becomes, the faster parties can close agreements, especially if they’ve seen the contract before.
For lawyers, standards change the nature of their work. Instead of spending hours redlining documents, lawyers can focus on higher-value tasks like advising on business risks, developing playbooks, and tailoring agreements to their clients’ specific needs. As Jake put it, “It enables lawyers to focus on what matters most.”
Challenges To Adoption
Building and adopting standards is no easy feat. Jake highlighted the importance of critical mass: “A standard only works if people believe it’s a standard.” Industry associations, influential players like Y Combinator, and grassroots efforts all play a role in driving adoption.
Common Paper measures its success by tracking the number of agreements signed using their standards. While adoption is growing, Jake acknowledged that there’s still work to do in spreading awareness and building trust in the framework.
What’s The One Takeaway?
“Standards are magic,” Jake said with a smile. “They make life easier for everyone involved — helping you, your customers, and your counterparties work better together.”
Whether you’re a lawyer, a business leader, or simply someone tired of inefficiency, Jake’s message is clear: adopting standard contracts can transform your operations and improve relationships.
For more on how standards can revolutionize your legal and business practices, watch the full episode of “Notes to My (Legal) Self.”
P.S.: The future of law is here. Adopt the magic.
Olga V. Mack is a Fellow at CodeX, The Stanford Center for Legal Informatics, and a Generative AI Editor at law.MIT. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat, Fundamentals of Smart Contract Security, and Blockchain Value: Transforming Business Models, Society, and Communities. She is working on three books: Visual IQ for Lawyers (ABA 2024), The Rise of Product Lawyers: An Analytical Framework to Systematically Advise Your Clients Throughout the Product Lifecycle (Globe Law and Business 2024), and Legal Operations in the Age of AI and Data (Globe Law and Business 2024). You can follow Olga on LinkedIn and Twitter @olgavmack.
The post Standard Contracts: Benefits, Challenges, And The Path To Adoption With Jake Stein appeared first on Above the Law.
Contracts are the backbone of commerce, but they often create friction, delay, and unnecessary expense. In Season 10, Episode 7 of “Notes to My (Legal) Self,” I sat down with Jake Stein, co-founder and CEO of Common Paper, to explore how standard contracts can transform the way businesses negotiate, close deals, and manage obligations. Jake’s journey from tech founder to legal innovator offers valuable insights into the challenges and opportunities of standardization in the legal field.
Here’s what we learned about why standard contracts matter and how they can reshape the way we do business.
A Technologist Tackles Legal Complexity
Jake Stein isn’t a lawyer, but his professional life has been shaped by legal interactions. As a co-founder of two software companies, he witnessed firsthand how commercial contracts often create friction between businesses. What should be a happy moment — two parties agreeing to work together — often devolves into adversarial back-and-forth negotiations, driven by competing templates, risk allocation, and lengthy redlining processes.
“It’s not about the people,” Jake emphasized. “It’s about the system.” The current system of bespoke contracts for every deal is opaque, time-consuming, and expensive, leaving businesses stuck in a loop of inefficiency. His frustration with this reality, coupled with a deep respect for the potential of standardization, inspired him to create Common Paper.
Why Standardization?
The concept of standard contracts isn’t new. Jake points to examples like the SAFE (Simple Agreement for Future Equity) for startup fundraising, the ISDA Master Agreement for financial derivatives, and even Pennsylvania’s standard residential real estate contract. These standards reduce negotiation time, create clarity, and foster trust between parties.
Jake sees standard contracts as the “free lunch” of legal innovation. They benefit both parties by focusing negotiation on key variables while eliminating wasteful debates over standard terms. As he explained, “Standards help everyone help each other. They’re a rising tide that lifts all boats.”
When Do Standards Work Best?
While not every contract is ripe for standardization, certain characteristics make it a perfect fit:
- High Volume, Similar Terms. Contracts that are executed frequently and involve predictable terms — like NDAs or sales agreements — are ideal for standardization.
- Streamlined Variables. Agreements with a few key negotiable points (like pricing or liability caps) benefit from having a fixed foundation.
- Complexity Meets Scalability. In industries like technology, standards often simplify highly complex processes (e.g., APIs or email protocols), allowing participants to focus on innovation rather than mechanics.
Jake noted that bespoke contracts will always have a place, particularly in unique or high-stakes transactions like M&A deals. But for repeatable, predictable agreements, standards are a game-changer.
Standards Aren’t The End Of Negotiation
One common misconception is that standard contracts eliminate negotiation. Jake clarified that this isn’t the case. “Standardization doesn’t mean no negotiation — it means focusing the negotiation on what matters most,” he said.
For instance, Common Paper’s contracts include a cover page where parties can customize key variables like pricing, payment terms, and risk allocation. By anchoring the negotiation in a shared framework, parties save time and avoid unnecessary disputes over boilerplate language.
Accelerating Deals And Evolving Legal Work
One of the biggest benefits of standard contracts is their ability to shorten deal timelines. The more widely adopted a standard becomes, the faster parties can close agreements, especially if they’ve seen the contract before.
For lawyers, standards change the nature of their work. Instead of spending hours redlining documents, lawyers can focus on higher-value tasks like advising on business risks, developing playbooks, and tailoring agreements to their clients’ specific needs. As Jake put it, “It enables lawyers to focus on what matters most.”
Challenges To Adoption
Building and adopting standards is no easy feat. Jake highlighted the importance of critical mass: “A standard only works if people believe it’s a standard.” Industry associations, influential players like Y Combinator, and grassroots efforts all play a role in driving adoption.
Common Paper measures its success by tracking the number of agreements signed using their standards. While adoption is growing, Jake acknowledged that there’s still work to do in spreading awareness and building trust in the framework.
What’s The One Takeaway?
“Standards are magic,” Jake said with a smile. “They make life easier for everyone involved — helping you, your customers, and your counterparties work better together.”
Whether you’re a lawyer, a business leader, or simply someone tired of inefficiency, Jake’s message is clear: adopting standard contracts can transform your operations and improve relationships.
For more on how standards can revolutionize your legal and business practices, watch the full episode of “Notes to My (Legal) Self.”
P.S.: The future of law is here. Adopt the magic.
Olga V. Mack is a Fellow at CodeX, The Stanford Center for Legal Informatics, and a Generative AI Editor at law.MIT. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat, Fundamentals of Smart Contract Security, and Blockchain Value: Transforming Business Models, Society, and Communities. She is working on three books: Visual IQ for Lawyers (ABA 2024), The Rise of Product Lawyers: An Analytical Framework to Systematically Advise Your Clients Throughout the Product Lifecycle (Globe Law and Business 2024), and Legal Operations in the Age of AI and Data (Globe Law and Business 2024). You can follow Olga on LinkedIn and Twitter @olgavmack.
