A standard non-disclosure agreement (NDA) for use when beginning negotiations over corporate transactions has gone live with the aim of having 1,000 organisations commit to its use.
The next step will be to create provisions that make it suitable specifically for merger and acquisition activity.
The Law Boutique (TLB), an unregulated business supporting in-house lawyers, started the initiative in April after realising how much time it spent on NDAs on behalf of clients, and attracted the support of a host of leading City law firms and in-house counsel to the oneNDA initiative.
Its creation was split into three phases: first, creating and agreeing the text of the oneNDA document; then creating ‘house rules’ to govern its use; and now launching it.
TLB chief executive Electra Japonas, co-founder of oneNDA, said it was a “quite generic” NDA suitable for “run-of-the-mill procurement-type transactions” – what she said was the most common NDA that TLB dealt with in a business context.
If users want to change any of the text, they cannot call it the oneNDA. It has been designed to work if governed by English, Californian or Australian law.
The support for the initiative from over 1,000 different firms and companies has now to be translated into firm commitments to adopt it and Ms Japonas said that, in October, there would be a “hard launch” with a list of all those who have done so.
The aim is to have 1,000 by the end of the year and she argued that they would have “a commercial advantage by being in the oneNDA Club”.
Ms Japonas said the original draft attracted 28 pages of comments and 1,200 people voting on suggested changes. It went through 11 iterations ahead of launch and will continue to be developed.
The steering committee was made up of in-house counsel from major companies such as Airbus, Adidas, Barclays, Coca-Cola Deliveroo and UBS, as well as lawyers from firms including Allen & Overy, Ashurst, Linklaters, and Slaughter and May.
The research partners who provided insights into standardisation, litigation and points of contention in NDAs included City firms CMS and Hogan Lovells.
In line with TLB’s belief that contracts should be created “in a modular way”, Ms Japonas continued, the next stage will be to “standardise” a module that could be “stacked on top of oneNDA to make it fit for purpose for an M&A transaction”.
She described TLB as a “contracts optimisation company” and said: “If we’re to solve the clunkiness of contracts, we need to reset our mindset in how we view, create and negotiate them.”
The idea came from an analysis of the types of agreements TLB had reviewed for clients in 2020 that showed 63% of those were NDAs but only accounted for 7% of the company’s revenue.
It also showed that they all more or less said the same thing but in different words.
TLB provides both managed commercial law services to companies and consultancy on improving the efficiency of in-house departments – what it calls ‘legal optimisation’. Standardisation is a key element of its work.
Ms Japonas added: “The enthusiasm and commitment of the oneNDA Club and the legal community have been a real driving force to get us to where we are today.
“There were a few sceptics that didn’t believe we’d be able to do it, but here we are ready to prove them wrong.”