Category Archives: Legal practice

Clinical trial agreements: thriving in ambiguity?

IP Draughts has recently advised several clients on clinical trial agreements (CTAs) and related contracts, including manufacturing agreements and agreements with clinical research organisations (CROs). The experience has left him reflecting about how this area of practice is an odd mixture of precision and vagueness, of formal procedures and finding ad hoc solutions, of strict regulatory compliance and muddling through the best one can, and where the scientific values of accuracy and taking a long-term view often run up against a commercial need to advance one’s product through trials ahead of the competition and before the development money, or investors’ patience, runs out.

In the UK, there is also sometimes a contradition, not found in some other countries, between the commercial aspects of running trials and paying fees to a hospital, and the non-commercial values and attitudes of National Health Service (NHS) hospitals and the people who work in them.

Instances of these contradictions include:

  1. Worldwide documentation. The need to comply strictly with national or regional (eg EU) regulations governing the conduct of trials, data protection and privacy, freedom of information, insurance and indemnities. But some of these regulations are complex, subject to change (eg EU data protection regulation), and vary between countries, while many clinical trials are conducted on a worldwide basis, using a single set of documentation wherever possible. Some of the language used in this documentation has clearly been designed under a different regulatory system to the one in which it is being used.
  2. Different skill-sets. The contracts that one encounters usually attempt to be in alignment with the regulatory system with which the drafter is familiar, at the time of drafting. But often they are drafted by non-lawyers and/or negotiated by non-lawyers, and used for several years without substantive review. They can and do end up with incorrect, misleading or outdated references to regulatory compliance, e.g. referring to guidelines rather than the relevant law, using terminology designed for a different type of trial, or a trial in a different country, or incorporating contradictions between obligations in documents designed for the same trial by different professionals, e.g. the Protocol (medical and ethical drafters), the Technical Agreement (regulatory and manufacturing drafters) and the CTA (financial, commercial and, one hopes, legal drafters).
  3. Poor source documents. This blog has previously commented on some of the oddities in the model NHS CTAs, e.g. the limit of liability for deliberate breach to twice the contract price. IP Draughts finds it difficult to believe that this strict limit, which he has never encountered in any other contract in over 30 years of practice, would be upheld by a court. Though he has no case authority directly to support this argument, he wonders whether a court would find such a limit unenforceable under the Unfair Contract Terms Act 1977, in view of the need for liability terms in written, standard terms of business to be reasonable. There are plenty of other examples of oddities in the NHS CTAs, which seem to be have been driven by commercial or financial priorities and to underplay the importance of clear, accurate, and legally-valid drafting. And yet he is told that the template CTAs in use in many other countries are much worse than the UK templates.
  4. Varying quality and availability of advisers. It is sometimes difficult for trial sponsors to find advisers and consultants who have significant experience of clinical trials and the associated legal issues in the jurisdiction in which the trial is taking place. For example, one of IP Draughts’ clients is currently looking for a legal adviser in Finland. Is any reader able to recommend someone suitable? A separate issue relates to CROs. Although he has not studied the subject in depth, IP Draughts has the impression that the market for CROs is dominated by a few international providers. He has heard stories of some large CROs taking weeks to respond to requests and being very bureaucratic in their approach.

The skilled clinical trials manager learns when to insist on strict compliance with the rules and when to bend, when to take one’s time and when to rush headlong, and when to stick and when to compromise in contract negotiations. It is not an easy task. In the UK we seem to have plenty of people who have these skills, and a thriving eco-system of life-science companies, service providers, hospitals, universities and regulators.

Whether this eco-system will survive Brexit is yet to be seen. There is a real danger of damage to the lagoon, its coral reef and its colourful species of fish.

 

 

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Skill set for transactional IP lawyers

Are the skills required for an IP litigator different to those required for a transactional IP lawyer? And are the skills for the latter different to those required for an M&A lawyer? What has happened to the general commercial practitioner who can turn his or her hand to anything that comes through the door, of a contentious or non-contentious nature?

Recent posts on this blog have focussed on drafting techniques, but they are only a part of the overall skill set required by many lawyers who advise business clients (using the term “business” loosely to distinguish from consumers).

The skills and attributes that IP Draughts tries to help his junior colleagues develop include (some of these overlap, and in no particular order):

  1. A foundation of technical accuracy, developed by continuous learning. Our UCL course on IP Transactions, as well as the Oxford diploma course, helps to supports this long term objective.
  2. Drafting skills, in commercial contracts and more generally in legal documents including notes of advice.
  3. Clear and purposeful communication with clients and others. The purpose will vary, and in individual cases the communication may need a particular mix of (a) analysis of what is needed, (b) organisation of material, (c) helpfulness, including understanding how the intended reader processes information, (d) conciseness, (e) completeness and accuracy, (f) bullet-proofness, (g) advocacy, (h) directing or recommending, etc.
  4. Ethical conduct and regulatory compliance.
  5. User-friendliness.
  6. Negotiating skills and tradecraft.
  7. Recognition of the different roles, character and temperaments of parties and understanding their needs and priorities.
  8. Risk management.
  9. Mutual cooperation in a supportive working environment.
  10. Self-motivation and motivation of others.
  11. Participation in the wider community of lawyers and clients, eg through writing, teaching, committee work.
  12. A passion for excellence in all of the above.

The skills for commercial litigators will overlap with the above list but include other items. IP Draughts sometimes gets involved at the margins of litigation, eg knowing how to select, instruct and manage a barrister, or how to write a letter before action, but rarely gets involved in the core activity, including working within the civil practice rules and directions.

Has IP Draughts missed anything important for a transactional IP lawyer?

 

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The Legal Manufactory

Why would anyone, starting out in their career, decide to become a lawyer? According to the visionaries and marketing men, the era of the traditional lawyer is over. It is so twentieth century! Instead we have become legal process engineers, for whom a knowledge of computer coding may be as important as a knowledge of case law on constructive trusts.

The astute visionary, seeking to convince his audience, must give practical examples to which the audience can relate. The examples given in the legal sector sometimes focus on the benefits of new technology, and other times focus on competitive pressures (real or desired) on the legal profession.

We can automate the due diligence or discovery process using current technologies, though manual sifting of the results is usually still required. We can create online courts for certain types of dispute, though lawyers and judges will still have a role. We can even automate the process for preparing a contract, using detailed questionnaires. But someone needs to prepare the questionnaire and draft the multi-option contract template that underlies the automated system. And, no matter how much automation has been used, the transactional lawyer needs to approve the final product as suitable for his client’s deal.

As with driverless cars that still have a human in the driving seat, we have varying appetites for allowing a computer to decide everything. As with electric cars that currently (a) cost more than petrol cars, (b) only work for long journeys if there are charging points at suitable intervals, and (c) require downtime to allow the recharging to occur, most of us will treat them – electric cars and some legal automation technologies – as novelty or luxury items for many years to come.

The competitive pressures on lawyers come from different directions and with varying degrees of force.

  1. From commercial clients, there is some pressure on law firms to be seen to be taking steps to re-engineer their processes. As well as the use of new technologies, there is the outsourcing of routine legal tasks to lawyers in lower-cost centres, from India to Northern Ireland. But IP Draughts is not sure how real these pressures are. If a client is sufficiently price-insensitive as to use a major London law firm when there are plenty of other, experienced commercial law firms across the country, it suggests that financial considerations are still not at the fore of the commercial client’s thinking.
  2. Consumer clients are not perceived as having much competitive power, and pressure comes instead from their proxies, including politicians and regulators. But the growth of McKenzie friends suggests that, if not prevented by the regulatory system, some consumers will gravitate towards non-lawyers to provide their legal services.
  3. The virtual abolition of legal aid (government reimbursement of legal costs for poor people) has put considerable pressure on legal practitioners who made most of their income from this route, and on free advice centres whose customer base has increased as a result. This has indirectly created pressure on the legal profession, as there is then greater focus on why the (unsubsidised) legal system doesn’t provide services at a price that consumers can afford. There is a vague and hopeful view that if only the regulatory constraints were loosened, and outside investors were enabled to create new types of legal factory, the loss of legal aid would become unimportant.
  4. Thus, politicians pressurise the legal regulators, and the legal regulators then come up with inventive ways of seeking to stimulate the market for new entrants to the legal profession. The regulators may think they are just shaking the tree to cause some fruit to fall, but there is a danger that the shaking may disturb the roots of the tree so much that it dies, or stops producing fruit. Any competent gardener would have told them they were applying the wrong kind of pressure, but regulators tend to be controlled by the professional quango elite nowadays, rather than experts in the subject-matter of the regulation. As a UK politician said during the Brexit campaign, the people have had enough of experts.

IP Draughts doesn’t complain about the use of technology. When he started his own firm 23 years ago, it was technology such as the fax machine, the laptop computer and the mobile phone that enabled him to compete with large firms. He was also pleasantly surprised at how easy and cheap it was to practice on his own account – much simpler and cheaper than it is now in the era of the Solicitors Regulation Authority.

He is concerned about the current, blundering incompetency of the legal regulators, and their inability to distinguish between opening up the market to new entrants (inter-profession competition) and interfering in the internal practices of the existing legal professions (intra-profession competition). By all means allow new categories of regulated organisation to provide legal services . But don’t dictate how a solicitor is trained, keeps up-to-date, and offers legal services – these are internal matters that help to distinguish the solicitor brand, and the SRA, LSB and other regulators should keep out of them.

Coming back to the original question, the pressures of new technologies and the market will likely change the way in which some lawyers practise, and for some it may be a less satisfying or financially rewarding role. No doubt there will be an increase in legal factories, run by non-lawyers, though IP Draughts would never want to be involved in such an enterprise.

But, in IP Draughts’ view, there will always be a need for the wise counsellor who guides the non-lawyer through the maze of online courts and outsourced [electronic] paper pushers, and manages their legal problem or opportunity. Of the 160,000 solicitors who are currently on the roll of the Law Society, perhaps half this number will have this role in a few decades’ time, and the rest will be working in other types of legal or non-legal role. IP Draughts hopes that the Law Society will retain its role as the ‘guild’ for those who follow the wise counsellor route. If it tries to cater for all types of lawyer and legal engineer, it may end up satisfying none.

 

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A little distance is healthy. The client is not always right.

The problem with lawyers, say some, is that they are too different. They are ‘clever’, use Latin terms and long words, wear dark suits and ties, and are aloof. They draft long, obscure documents, they take too long to complete work, they won’t give a simple yes/no answer to questions, and they get in the way of my deal. They aren’t team players. They are stand-offish, and their values are different from the rest of us. They cost too much and they earn too much. If only they would stop being like traditional lawyers, we would all get along much better.

How much of this description do you recognise in your lawyer, or in yourself? If you substituted ‘oncology consultant’ for ‘lawyer’ in the previous paragraph, would you still recognise some of these faults, and would they be any more acceptable? Would you rather be treated by an incompetent consultant with a great bedside manner, or a highly competent one with only passable social skills? And if you are the patient, do you have any obligations to meet the consultant half-way, to stop smoking or turn up on time for appointments?

Perhaps the analogy is pretentious? We accept things when they are a matter of life and death that we don’t accept in a business relationship? I am the customer, therefore I am right, what I say counts, and I shouldn’t need to meet my lawyer half-way?

In IP Draughts’ view some of the ‘features’ mentioned in the first paragraph are lawyerly faults and the lawyers among us should recognise them and try to do better. But some of the other qualities are either neutral (and irrelevant) or commendable. The client is not always right, and there are situations where the lawyer should maintain a healthy distance from the immediate desires and preferences of one’s paymaster. This is as true for in-house lawyers as it is for external counsel.

Sometimes, the right course of action is obvious – as when criminal offences are being committed or contemplated – the lawyer should at the very least advise against such conduct, and may have a legal duty to report the activity that overrides any duty to the client.

In other situations, there may be shades of grey, and judgment may be required as to whether to treat the proposed action as within a client’s prerogative or something to stand firm against; whether to gently nudge the client but accept his ultimate decision, or be very blunt and direct. Judgment comes from experience, and advice may need to be sought from a more experienced lawyer or from one’s professional body. In some cases, the client may be hopeless at recognising the dangers or at taking the point seriously. Lawyers are, or should be, good at standing back from a situation and looking at it objectively; this can be a great benefit to a client who is ‘too close’ to the issue.

Not a great outcome when Sir Thomas More fell out with his client, Henry VIII

Part of the lawyer’s skill-set is to provide a good service and work closely with one’s client, while retaining objectivity and a professional set of values. Sometimes, it is impossible to reconcile these objectives and the lawyer either gets fired or suffers professionally. Sometimes, the fall-out is greater. Though the circumstances were all very different, IP Draughts is reminded of what happened to Sir Thomas More, the Enron lawyers, and the most recent, acting Attorney General in the USA. The recent dismissal of the Director of the FBI is in a different category, as the President of the United States was not his client, though by some accounts the President thought he was.

So, IP Draughts would put the ‘faults’ described in the first paragraph into different categories:

  1. Must try harder. As a lawyer one should try to be responsive, listen hard to what the client is asking for and provide it, communicate well, provide as simple an answer as is possible in the circumstances, and generally try to be user-friendly and provide an excellent service.
  2. Up to a point, Lord Copper. There may be situations where a lawyer could try harder to fit in with the prevailing values of the client, eg by ditching the suit and tie, or by providing a short memo of advice, subject to caveats, rather than write a long essay. But the lawyer should ensure that this fitting-in doesn’t result in becoming a yes-man on points that matter, as described in the next paragraph. He should also keep in mind whether the person instructing him is reflecting the overall wishes of the organisation that he represents. For example, is that person keen to see the deal go through, no matter what the long term risks to the organisation?
  3. You say tomato… Increasingly, lawyers are under legal duties to act in ways that their clients may not like, such as reporting suspicions of money-laundering (in the EU) or corporate fraud (in the USA, eg under the Sarbanes-Oxley legislation). These duties are in addition to longstanding legal and professional duties to the court, to uphold the rule of law, to act ethically in one’s personal dealings, and so on. Even if there is no legal or professional duty, a lawyer may serve his client’s best interests by maintaining a degree of objectivity. For example, when advising on the strength of a case, it is very easy to be swept along by the emotions of one’s colleagues; it is important to keep a clear head and be prepared to articulate an unpopular message. In other words, it is not only acceptable, it is sometimes necessary for a lawyer to take a different line to one’s client, and the mindset that goes with these duties is likely to involve a certain degree of distance from purely commercial priorities, though the degree of distance will depend partly on the client. It should be possible to do this with a light touch, though.

In summary, provide a good responsive, user-friendly service. Try not to be too lawyerly. But keep enough distance to be objective and fulfil your legal and professional obligations.

 

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