Robot:PhotoAlto/Matthieu Spohn/Getty Images; Gavel: Hans Bjurling/Getty Images; Illustration: HBR Staff
Summary.
The cost of legalese in business contracts is high. Companies must hire expensive lawyers to compose it, and customers often miss important information because agreements are so long. And if those customers lose faith in those companies because they are surprised by what they missed, they can swiftly air their grievances on social media. The legal industry has been experimenting with shortened and more “human” contracts for years (for example, Creative Commons licenses). Now some insurers (whose industry suffers from this problem greatly) have developed digital, personalized policies that take these efforts to the next level.The cost of legalese in business contracts is high. Companies must hire expensive lawyers to write the stuff. Their customers often miss important information because — really — when was the last time you read every word of one of those privacy agreements before clicking “Agree”? And if those customers lose faith in those companies because they are surprised by what they missed, they can swiftly air their grievances on social media.