Mike Dillon, the general counsel of Adobe Systems Inc., isn’t fond of the way many lawyers write. And it’s not just the legal briefs that are anything but. His dissatisfaction even extends to contracts like nondisclosure agreements. So, not long after he landed at the software company in 2012, he set out to do something about it. He thought there was no reason why NDAs had to be a half-dozen pages or longer. He believed they could be reduced to a single page. Taking a cue from our subject, this interview has been edited for length and style.
How did companies typically handle nondisclosure agreements in the old days?
Mike Dillon: We graduated from law school, and at law firms we were trained to regard NDAs the same way you would any other agreement: Lawyers spent an enormous amount of time and effort on them. When you got into a company working in-house, that continued. There were multiple versions of NDAs, all quite lengthy. They were often negotiated for long periods of time, and there was no correlation between the NDA, the effort you put into it, or the value that the client or your company derived from that effort.
How has that changed?
Dillon: One of the big changes is that there’s been more and more standardization of terms – especially as IP law has evolved into new areas and those have become more common. You see a standardization of language across companies and even industries. Consequently, attorneys can be focused on areas where they add far more value than NDAs.
How has technology changed the game?
Dillon Technology is certainly a part of it. To give you an example, at Adobe we went through an exercise a few years ago where we started with multiple versions of an NDA, and we went through an exercise where we created a system where it’s one click to generate an NDA. We also have pre-signed NDAs, and all are available to our employees in a very automated fashion. This is greatly reducing the time we’re spending on NDAs. We execute about 2,000 nondisclosure agreements a year at Adobe. In the past, before we went through this process, the time it took to get ours to go from negotiation, to our signature, to the customer’s signature was about 20 days. Now we’ve reduced that to on average about three days, and most of that three-day period is largely the time it takes for the customer to review and sign it. The part that Adobe spends generating the NDA is actually very, very short.
Are there occasions when your business people can access your NDAs and not even need to have any kind of conversation with you at all?
Dillon: Yes. We’ve got a dynamic agreement that is built on questions and answers. So, for example, the sales force is asked the name of the customer and what the purpose of the NDA is, and it actually builds that on the fly. And we also pre-sign those NDAs using Adobe Sign, our electronic signature technology, which also further reduces the time we spend on NDAs.
Do you have a sense of what percentage of these 2,000 NDAs didn’t take any of your lawyers’ time at all to execute?
Dillon: Yes, roughly 70 percent of our NDAs are done with no legal assistance. The remaining 30 percent – and it’s actually probably a little less than that – we have to provide some limited assistance or a specialized form of NDA, maybe in connection with an acquisition, but most often the additional time is because we may be using a customer’s NDA. Because we are obviously using different terms, we need to have legal oversight.
How does that compare with, say, five years ago?
Dillon: Five years ago… that’s a good example. When I arrived at Adobe five years ago, we went down this path. At that time we had about 16 different boilerplates that we used. Some of them were as long as seven or eight pages. They were not done electronically. Almost all of them required legal support, and it was a really interesting process, the whole change management process. I recall getting the NDA simplification initiative started and not feeling that we were getting a lot of traction. So, I held an all-hands meeting where I asked everyone to raise their hand if they had ever negotiated an NDA or prepared one. It was about 90 percent of the room. And then I asked them to raise their hand if in all those thousands of NDAs we collectively had worked on, any of them had been the subject of a dispute or litigation. I think only two people raised hands.
So my next question was, “Is this where we add the most value, or should we look at ways to automate and minimize our involvement and focus on other areas where we can better help the company?”
So how long did it take to go from that meeting to having the solution in hand, and what did you have to do?
Dillon: It was about a two-year process. The first step was getting a cross organizational group of employees together – especially people who were passionate about driving change in this area, and having them rethink our NDAs and try to get it down on one page. It was a huge amount of work, but they were able to accomplish it. And by the way, that was a group that was global, not just U.S.-based. We tried to think about the NDA being used in other jurisdictions as well. Then we had them work with our IT team and our legal operations team to evaluate tools to implement the NDA. Once that was completed, we went through the process of evangelizing it and advocating usage of this new form of NDA and the related tool throughout the company. We educated employees on when they used it and how they used it. As you might expect, that was not a big lift, because most employees are so excited that they can self-serve on things like NDAs that they very quickly began using it.
I’m glad you introduced the word “global.” Does the NDA that seems to work with most of your domestic needs also work in the same form globally, or do you have different global versions?
Dillon: We do have different versions, but we made a focused effort as a team to think about the customer, or how these NDAs were being used, in what situations, and tried to pare down our language to the absolute essence that was needed in each jurisdiction – and not get hung up on writing style. You know, some attorneys want to use “will,” some want to use “shall.” Things like that.
I know that writing has been important to you – stripping out acronyms and legalese. Does that predisposition enter into how you approach creating a template like this?
Dillon: Absolutely. The other thing we did early on was create what we call the Adobe Style Guide, a document that reflects how we want to communicate, what language we want to use in our agreements and what our agreements are going to look like. The focus of that effort was actually driven by our team in Singapore. We’ve got a great team there that is very interested in clarity and simplicity. They worked across the organization to create the document, and now we use it as the foundation whenever we write agreements or processes or policies. All of our new hires get a copy of the Style Guide, and they’re expected to communicate in the same fashion. That way we’re all speaking with one voice, and it’s in the best interests of the company and the customer.
By the way, we made our Style Guide available under a Creative Commons license so any of your readers can get a copy. We’d love for them to use it in their companies and organizations as well.
What are some quick tips you can offer other companies that may be interested in revising their own NDAs?
Dillon: On a technical level, make sure that you identify people in the organization who are passionate about driving changes like this. Not just in terms of looking for greater efficiency, but lawyers, legal specialists and paralegals who really understand the value of this type of project. You also need work closely with IT and Legal Operations to select the right tool to implement the document. Finally, many other companies have done work like this and are happy to compare details about the process. After all, it’s in the best interests of our profession. I know that our team is happy to work with any of your readers on this type of project and to show them our roadmap.
Will be more changes down the road? Do you think that someday NDAs will be automated, and there will be a computer like IBM’s Watson that knows more about how to do this than even you or your lawyers do?
Dillon: With an increase in automation, machine learning and artificial intelligence, we are going to see in the next decade, if not even sooner, more and more of what I would describe as routine legal services that are going to be done in an automated fashion. We’re already looking at these kinds of technologies in our organization. That’s a really, really good thing. I know people worry about it, but the reality is we should always be striving to deliver the most value to our clients, and I would argue that negotiating NDAs is not a high level of value for a fifteen- or twenty-year experienced lawyer to be providing to their client. They shouldn’t be spending time on that. So to the extent that we can automate and make these things easier for our clients, we absolutely should do it.
Is there anything you want to add?
Dillon: Our legal department has been very active in using Adobe tools. One is the Adobe Document Cloud that allows for e-signing of documents and is an amazing technology. I often marvel at the fact that I sign my name in ink on company documents probably no more than five times a year. Almost everything else is done electronically. So that’s a big wave of the future. We also use a lot of our Creative Cloud technologies, things like Illustrator, Photoshop and InDesign to create better content for our employees, whether it be training or presentations or posters. They are great tools that make our department more efficient and effective and modernizing our legal practice really resonates with our clients.
And that gets to something I ask quite often: What’s the brand of our legal department? In the old days you had a lot of pushback from clients who didn’t see a lot of value in negotiating NDAs. Now you see us doing things like embracing technology and trying to simplify our agreements. These types of activities have really created a positive brand for our organization within the company, and within the legal community.
There’s one last thing not to miss in all of this, and it’s something I’m very passionate about. People in our industry and finance and HR are knowledge workers. We consume a tremendous amount of paper. In the past you’d see it in huge file rooms. In fact, when I arrived at Adobe we had these enormous file rooms of documents. Since then we’ve digitized them all and moved to electronic systems and storage and routing. That’s increased our efficiency, but it’s also been great for the environment. And sustainability is super important to Adobe and to me personally. It’s wonderful to be more effective, while not wasting water, trees and other resources.