1/28/18

How much of lawyering is being a copy-and-paste monkey?

First, an unqualified endorsement:
Ken Adams's A Manual of Style for Contract Drafting, Fourth Edition is essential for every professional involved in the contracting process from negotiation and drafting to interpretation and litigation. MSCD has no peer in explaining what contracts do and how they should be constructed. The breadth, depth, and clarity are astounding. As is the usability. This is a well-organized reference containing pinpoint guidance on clause types, word usage, and formatting.
If we truly believe that we should do the best we can until we know better, then do better, we have a professional obligation to grapple with, and then make use of, the expert guidance MSCD provides. When light is offered, complacency is no excuse to continue in the dark. MSCD shines a bright light on how to best solve for complexities of contracting in pursuit of business objectives.
Anyone interested in contracts should also read Ken's blog.

Had to get that out of the way because it is deserved and standard book reviews are not my MO.

"An unqualified endorsement" in both the sense that it is without reservation and that the person making it (me) lacks the appropriate qualifications. Reading Ken triggers my almost debilitating impostor syndrome. I've battled the affliction since I commenced my legal career with the observation: Clients are paying how much per hour for me? To do this? Really? Something is very wrong here.

Ken is also a stark reminder that lawyers, in general, are not so consistently excellent at what we do that we should be exempt from scrutiny, discipline, rigor, and the clarion call of continuous improvement.

Copy-and-Paste Junkies
This week at Legaltech New York, I look forward to learning about the math behind the claim that clients spend that $75 billion per year on legal document creation. I, however, already possess ample evidence that, in creating these documents, legal professionals are generally incompetent with the core technology tools of their trade.

People don't argue with me directly much anymorethough they may still try to hide behind outliers, those mythical digital natives, and the delegation dodge. Instead, they shuffle priorities. Even though 99% of fee earners identify Word as a "critical tool," when challenged, they posit that using Word correctly isn't 'real lawyering.'

For me, any action is sufficiently 'real' if it influences quality, speed, cost, or consistency. Incompetence with technology affects all four. What my critics are really saying, I hope, is that technological aspects of properly structuring a legal document are not where lawyers add the most value. On this, we agree. Which is precisely why I consider the attention wasted fiddling with the non-substantive aspects of legal documents a value-reducing tragedy worth remedying.

But they persist in a false binary. Since we agree that what gets written is more important than the underlying digital document construction, they believe I have conceded that their technological incompetence can continue to be ignored. Lawyers should be given a pass on their poor proficiency with the tools they use to write because they are so damn good at writing, which is where the real value lies.

Enter Bryan Garner. Garner has organically captured the majority of Google's prime real estate when searching for a "legal writing guru" (h/t to the great Ross Guberman, Gary Kinder, and Ivy Grey, as well as their tools, in their quest to help lawyers write good).

Garner contends that "lawyers can't write." I'm quoting, not paraphrasing: "lawyers on the whole don't write well and have no clue they don't write well." When it comes to writing, Garner identifies lawyer self-regard as a manifestation of Dunning-Kruger. Lawyers: "(1) often think they are quite skillful or knowledgeable, (2) can’t recognize genuine skill in others, (3) uniformly fail to recognize the extremity of their own inadequacy, and (4) can recognize and acknowledge their own previous unskillfulness only after highly effective training in the skill."

But that's one man's opinion. What say our computer overlords? Judicata "recently launched a tool called Clerk that analyzes and grades briefs, evaluating their strengths and weaknesses, looking for areas of improvement and attack. Clerk’s analysis spans seven dimensions that measure how well the brief is argued, how well it is drafted, and the context within which it arises." Clerk reviewed 500 briefs from 20 BigLaw firms written for clients like Apple, Google, and Toyota. In a post that clearly pulls its punches (for obvious reasons), Judicata found:
  • Only 1 out of 500 briefs scored an A (and that was an A-)
  • Almost every brief contained misspelled case names, miscited pages, and misquotations
  • A third of the misquotations were intentionally inaccurate
  • 40% of firms misspelled their judge's name
  • Most briefs relied on precedent whose outcome supported the other side
That resonates. I'm sure I've made each error (except the intentional misquote, I hope). For me, typos is a real problem. And there only the beginning.

Every time I sit down with one of Garner's books, I feel like I am taking a guided tour through the damage I have done, and continue to do, to the English language. It is not a matter of mere polish. It is about readability and clear argumentation in service of persuasion. Our output is not nearly as impeccable as we like to think, which undermines the implicit argument we constantly make that we should be left alone to do our good work even if we are a little inefficient.

And that's us litigators. Supposedly, our transactional brethren are worse. Writes Garner, "Although lawyers in all areas of practice are affected, the incidence of the Dunning-Kruger effect is significantly higher among transactional lawyers than it is among litigators." Whether or not this observation is accurate, recent scholarship has not been kind.

Professors Choi, Gulati, and Scott have identified The Black Hole Problem in Commercial Boilerplate. In short, a "boilerplate term that is reused for decades and without reflection merely because it is part of a standard-form package of terms, can be emptied of any recoverable meaning: this creates a contractual black hole." The culprits:
The client’s assumption is that the lawyers possess the expertise to make the necessary marginal modifications to the standard forms to insure that they both fit the client’s preferences and do not depart significantly from what the market would consider the standard package. But lawyers working with standard form language repeated for many years by rote are unlikely to have much, if any, understanding of the purpose served by these terms.
In Variation in Boilerplate: Rational Design or Random Mutation?, they extend this investigation to the presumption in standard contract doctrine that "sophisticated contracting parties choose their terminology carefully because they want courts or counterparts to understand the
precise meaning they intend to convey." They find the presumption is not supported by the evidence. Rather, contract evolution is much closer to "random mutation": 
Agents charged with the drafting responsibility but ignorant of the function of the boilerplate terms tinker with the boilerplate language at the margins. But if parties include these boilerplate terms simply to satisfy standard practice and not because they attach independent substantive meaning to the terms, then principals are not motivated to monitor the agents’ actions. In this way, the revised language evolves as the “new” standard, leading to encrustation. The modified standard is then reused in future deals and incorporated into the next generation of boilerplate terms. Under a Random Mutation model, it would not be surprising to find terms that become part of the standard template and are then repeated over time through rote usage as part of the standard package of terms without any attention paid to the original meaning of the terms. This lost meaning becomes even more difficult to recover when, through the tinkering process, the terms also become encrusted with meaningless legal jargon.
In Boiling Down Boilerplate in M&A Agreements, Professors Anderson and Manns extend the analysis of black hole problems to 12,000 M&A agreements:
The problem lies in the drafting process of documents that are neither completely negotiated nor completely standardized. In such contexts, parties often recycle boilerplate provisions from precedents, a practice consistent one of the goals of standardization and the use of precedent. However, the penchant of lawyers to leave their mark on agreements through a myriad of additions and deletions to the text may come at a high price of eroding the substance of ostensibly standardized language. The interplay between mechanical recitation of boilerplate and high levels of edits is that boilerplate terms may morph into non-standardized language that loses its original meaning, even though the provisions continue to live on in agreements in increasingly fractured ways. These findings provide evidence substantiating the black hole or grey hole hypothesis of the evolution of boilerplate having a potentially corrosive effect on the textual integrity and meaning of these terms.
The mergers and acquisitions context epitomizes this problem of unreflective copying of precedent provisions combines with ad hoc edits to individual clauses. Each agreement is based on a prior deal precedent, and drafters frequently incorporate sections of the prior deal without sufficient scrutiny about the degree to which idiosyncratic novelties have been introduced in the precedent document that may be inapplicable to the new deal. At the same time, high levels of “editorial churning” take place in the process of transforming each precedent into the current acquisition agreement. The result is a problem of “drafting drift.” Boilerplate provisions live on from deal to deal, yet gradually shed their textual integrity and potentially lose their clear meaning as ad hoc edits are copied from deal to deal and new ad hoc edits are added at each stage.
Again, this critique resonates with me personally. In particular, I identify with a passage from their companion article, The Inefficient Evolution of Merger Agreements:
The absence of even firm-specific forms has led to haphazard and inconsistent lawyering as lawyers add significant amounts of extraneous information to each deal and inadvertently retain deal-specific information from prior deals. This fact underscores the inefficiency of current deal drafting processes and undercuts the argument that merger agreements are distinctively crafted (at great expense!) to suit the needs of clients.
We argue that the remarkable heterogeneity of acquisition agreements reflects lawyers’ tendency to use precedents that they are more familiar with or relate to the particular client they are dealing with, rather than those that may be more readily adapted to the transaction at hand. The result is a path dependent process of deal term evolution that thwarts standardization even within firms and leads to systematic inefficiencies in the acquisition agreement drafting process which raises costs and risk to clients.
Are we really copy-and-paste monkeys who indiscriminately tinker just to leave our mark? Explain to me why we deserve so much deference if our core products are defective.

Emphatically, the simple answer is no. We are not just copy-and-paste monkeys. The Choi et al. papers are worth reading in their entirety to understand the context-specific reasons for why the black hole problem arose with respect to pari passu clauses, including client resistance to altering long-used forms. Likewise, I recommend Why Have M&A Contracts Grown? Evidence from Twenty Years of Deals and Set In Stone? Change and Innovation in Consumer Standard-Form Contracts to balance the view of the value skilled lawyers bring to contracts.

Contract evolution is not all mindless tinkering. But the evidence is compelling that there is considerably more of that than we would probably care to admit. Which is part of the reason that being a lawyer can be the most boring job in the world.

I plead guilty to some of the charges. In BigLaw, I started as a litigator. Later in my career, transactions became a significant part of my brief. So I did what I do. I standardized and automated. It did not occur to me that I might be standardizing garbage.

A Tale of Templates

According to some sources I read, lawyers need to disrupt themselves by applying design thinking to automated workflows that utilize machine learning and distributed ledgers to create smart contracts between devices on the IoT. But most lawyers have never gotten beyond bare survival with Word and have proven almost constitutionally incapable of follow through on simple systems that utilize templates.

With consulting and site visits, I've had the opportunity to review how lawyers work across several dozen organizations (in-house, law firms, government). I find that most lawyers generate a substantial percentage of their work product by opening the last similar document they encountered and editing salient information. The original provenance of the document is unknown, but our lawyer usually acquired it from a lawyer down the hall or a haphazard search of the organization's document management system. This, of course, was precisely what I did when I was a junior lawyer long ago. Though maybe the world has changed since my last site visit in December 2017.

This ad hocism is suboptimal for the reasons I laid out here and in the papers cited above.
When I ask the lawyers why they don't use standard templates, they respond that no templates exist or the ones that do are outdated. When I mention this to the people in charge, they are incredulous because the organization invested in templates ages ago and everyone uses them. The conflicting accounts are resolved by a chief administrator who explains the templates were created but few people used them so most templates have fallen into disrepair and disregard.
ASIDE: I repeat myself. I repeat myself. I feel like I constantly tell the same story. Relatively straightforward solution to obvious, ubiquitous problem. Something is done but doesn't stick or radically underperforms because of adoption issues—training, process redesign, discipline, enforcement. People at the top are satisfied that the problem is solved and move on. Problem persists and is rediscovered five years later. Cycle repeats.
I am convinced that legal productivity could have been increased substantially decades ago by broader, better use of training, templates, document automation, and electronic signatures. I am convinced that legal productivity could be increased substantially today by broader, better use of training, templates, document automation, and electronic signatures. That is a sad commentary. Low-hanging fruit was obvious then. It is even more obvious now. Yet the dysfunction remains.

These are not idle observations. I've enforced template usage and quality control protocols to the point where junior lawyers have been removed from accounts for failure to comply. I've also overseen contract automation processes that ultimately paid huge dividends.

On one project, I used a law company to employ a veteran contracts lawyer who was able to substitute for a substantial chunk of what outside counsel was doing at less than one-third the cost. The lawyer split time between work previously sent to outside counsel and the contract standardization/automation project. The project had a positive ROI from day one and realized substantial benefits and savings upon completion.

There was, however, one problem. The lawyer kept coming to me with questions about how to resolve variations and conflicts in the existing documents. I had no answers for him because I had never thought critically about the content. I had simply accepted the inherited documents. In fact, there was a wealth of good material. But the overall coherence and consistency had been degraded over time by editorial churning and drafting drift.

I was fortunate. This experienced lawyer knew exactly where to turn. He introduced me to the writings of Ken Adams.

Adams on Contract Drafting

Looking back, we should have consulted with Ken directly. I had reasons not to, but these were not good reasons. We consulted MSCD and Ken's blog. Though "we" gives me too much credit. The contracts lawyer was the true Ken disciple. I benefited from his dedication and curation. It is one of many instances in my career where I have been good only because I was fortunate to be surrounded by good people.

In discovering Ken, I uncovered just how little I had  considered what contracts do—regulate conduct, state facts, and allocate risk—let alone how they should be constructed. I could offer the excuse that I was born a litigator. But that, of course, would conveniently ignore the starring role contracts play in commercial litigation.

It was not the first time I was struck by own ignorance. I'm not sure how anyone graduates law school without feeling totally unprepared to be a lawyer. I don't know how any seasoned lawyer makes it through a party or family gathering—fielding questions about DUIs, divorce, taxes, estate planning, and executive privilege—without realizing that the world thinks you know far more than you do. For me, impostor syndrome never goes away, the volume simply gets turned down gradually in discrete areas where I have spent time to become educated. Before Ken, contracts had not been one of those discrete areas. And then Ken cranked the volume up to eleven.

Ken is the kind of nerd who will write 27 pages about the phrase "represents and warrants" being pointless and confusing. MSCD is his nerd magnum opus. Ken also possesses one of those nimble minds that makes it immediately apparent that he has considered whatever counterargument you may inclined to raise and found it wanting. He has put in the work required to have an opinion. He is a true expert, and he knows it.

While becoming painfully aware of one's own ignorance, reading Ken also makes it hard to escape the conclusion—supported by the empirical evidence from the scholarship above—that true contract drafting experts are few and far between.

When I first read Ken's observation that we need "contract drafting specialists," I was incredulous. I thought we already had armies of them. But, apparently, we have deal lawyers. Their emphasis is not on contracts but on getting deals done. Contracts are simply a malleable means to that end. Hence, our expensive and risky black hole problem.

As far as I can tell, Ken is in a class by himself among gurus on how to say what needs to be said in a contract (he points to others, like Glenn West, on the what-to-say part). What makes Ken relatively unique among prominent legal bloggers (including me) is his willingness to name names in rendering harsh critiques.

Much has been made of Ken's dismissal of legal forms from "hack vendors" as "crap," "dreck," and "commoditized mediocrity." But, as I argued here, I think we miss the point if we presume Ken is making the common argument that forms can't compare to bespoke lawyering. If anything, Ken is making an argument in favor of vendors under current operating conditions. Ken is not saying their forms aren't as good as most lawyers. Rather, their forms are just as bad as most lawyers, some of whose work product is far worse than the forms. That is, "the quality failure of the consumer market is just part of the quality failure of contract drafting as a whole."

Ken does not shy away from going after the lawyers themselves. He reviewed Citibank's attempt at a "new, clean design with simple language" and remarked, "It's as if they went halfway and stopped." He lamented the "naiveté" of the GC from GE Aviation whose thoughts on contracting got published in Harvard Business Review. He referred to an award-winning IBM contract as the work of "dilettantes." He chided Kirkland for recommending a clause that "serves no useful function."

Ken labeled the Google-Motorola merger agreement "a mediocre piece of drafting" and then pre-empted the inevitable objection:
"Mediocre? How can that be! After all, Google is represented by the prominent law firm Cleary Gottlieb—presumably they did the bulk of the drafting. Well, the Google–Motorola merger agreement is mediocre because all big-time M&A drafting is mediocre." 
As for our classy friends across the pond, he writes, "If you’re at a Magic Circle law firm and you think your contract prose is fine just as it is, that’s likely because it has never been subjected to serious scrutiny."

Ken pulls no punches. He proudly coined the term "copy-and-paste monkeys" He has been at this for more than twenty years. He's pointed out what we do wrong and explained in astonishing detail how we can do better. Yet there is scant evidence of the big names responding to Ken on the merits. And there is scant evidence of them changing their behavior based on his advice. Challenged on the quality of one of its core deliverables, the reaction of the legal market has been mostly ¯\_(ツ)_/¯.

The Cassandra Complex

Ken is extremely successful in the local sense. He is 'the name' in contract drafting. He gives seminars all over the world. MSCD is an essential reference with impressive sales now in its Fourth Edition.

But Ken is still fighting a battle he started more than two decades ago. He set out to address dysfunction in contract drafting. Dysfunction remains. Isn't that failure? Ken answered that very question on his blog. His answer is not precisely how I would respond. His answer is better:
I’ve always known that because contract drafting is a precedent-driven part of a notoriously conservative profession, measurable change would take time. I’ve been satisfied to have my stuff be of use to those of us who want clearer contracts...the defining characteristic of the current system is that it’s resistant to change. Contracts are drafted by copy-and-pasting, on faith, from templates and precedent contracts of questionable quality and relevance. Given inertia, the pace of transactional practice, and structural impediments to change, it’s enormously challenging for law firms and company law departments to stop the whirring machinery, dismantle it, retool it, and put it back together.
Change is so hard to come by that sweeping change will require overhauling the entire contract-drafting apparatus. MSCD is just the first step—the foundation. Next, we need a subscription library of automated templates; a certification program; and an online contract-drafting course for law schools.
We’ll see how much of that comes to pass. But even if you assume that none of it does, and that drafting consistent with MSCD’s guidelines is limited to an enlightened minority, that still wouldn’t mean that MSCD had failed.
This attitude merits emulation. I know I'm fighting the good fight. But it's trench warfare. Progress is measured in inches. I am keen on any technological advancement, tactical innovation, or strategic shift that might fundamentally alter the dynamic. When do we start capturing huge chunks of territory? I remain hopeful that the answer is soon. But I'm not counting on it and intend to keep fighting anyway.

I'm prepared to be patient. But I sometimes worry about being too conciliatory. I've long had sympathy for the argument that talent trumps system. My counter remains that system amplifies talent. But in taking the primacy of talent as a given, I wonder if I am crediting the core conceit that what lawyers do is so consistently valuable that we are entitled to some sort of dispensation for our sins. We're not. Our output is not that consistently good. We're not doing the best we can. We know better. We should do better.

______________________________________
D. Casey Flaherty is a legal operations consultant and the founder of Procertas. He serves on the advisory board of Nextlaw Labs. He is the author of Unless You Ask: A Guide for Law Departments to Get More from External Relationships, written and published in partnership with the ACC Legal Operations Section, and the Service Delivery Review Primer, written for the Buying Legal Council. Find more of his writing here. Connect with Casey on Twitter and LinkedIn. Or email casey@procertas.com.

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9 comments:

Brian Rogers said...

Casey: This is a great piece ... spot on analysis.

One reason lawyers cut and paste is that we don't know the law underlying the clauses in the precedents we inherit. Thinking just about some boilerplate clauses, for example, are contracts assignable absent a provision permitting assignment; does a contract party have a set-off right absent a provision that so provides; what's the difference between "indemnify" and "hold harmless," if anything; what's the difference between a "cost," "expense," and "fee" in a legal fees provision; and what's the difference between a "loss," "liability," "claim," and "cause of action" in an indemnification provision? I doubt 10% of experienced transactional lawyers know the law underlying these questions. The only safe route is to rely on precedent without straying too far.

I started practice about 15 years ago in a large law firm. There was practically zero training. No education about the law underlying the contracts we were drafting or how to "do deals." Although law school provided a good foundation in legal knowledge, the basic legal education is simply incomplete without more specialized, practical education.

I absolutely agree that lawyers should develop more technological competence. But we also need to know the law much better, and I think systematic post-law school training regimens are essential.

Brian

Jeff Gordon said...

I’m going to start with “I love Ken’s work”... because everything else isn’t praise.

I’ve been reading Ken’s blog since the beginning. And I am a fan of the MCSD as an academic work. But in the practical sense, it’s irrelevant to those of us actually drafting and reviewing contracts. The reason is simple, as you pointed out, changes in the law and legal practice are measured in inches... in THOUSANDS of judicial reviews happening in myriad jurisdictions over DECADES. Ken’s language hasn’t been tested. At all. There’s not yet one example (I’ve asked) where his language has made it through to judicial review to determine whether it was more clear, or more accessible, than the usual language in a similar contract section.

That makes his guidance problematic because I can’t rely on it. Sure, “reps and warrants” has numerous issues (again, I agree and love Ken’s analysis of nearly every topic). But that phrase is nearly elevated to magic word status and without it, a judge who isn’t as descriminating could rule against me or my firm.

Oh, and for the record, I’ve said this to Ken directly, which he quickly dismisses with his nose in the air. And THAT makes his suggestions dangerous - because now, not only is he advocating a revolution, he’s doing it without addressing the weaknesses in his position.

D. Casey Flaherty said...
This comment has been removed by the author.
D. Casey Flaherty said...

Jeff,

So we can't change anything until a court tests it. But a court can't test anything until we change it. Therefore we can't change.

I'm quite certain that Ken has written about "tested" contract language many times on his blog. I am equally certain that he has an entire section about it at the beginning of MSCD. There is even a court case that explicitly references Ken's thoughts on the tested issue quoting from the 2nd Edition of MSCD. GRT, Inc. v. Marathon GTF Technology, Ltd., 2011 WL 2682898 (Del. Ch. July 11, 2011)

You can disagree with Ken. He is a revolutionary. But it is intellectual malpractice to suggest he has not addressed this particular argument.

Anonymous said...

Casey -- You have some brilliant ideas and some very thoughtful analysis along the way, but there is some irony in your going on for 3,911 words and 9 pages about good writing. Find thyself an editor and more of us will get past the first page or two.

- Wishful Reader

Steve said...

@Anonymous, I got 3914 words and 12 pages. What font size are you using?

Also, where do you suppose my 3 extra words came from?

I think maybe my Word counted ¯\_(ツ)_/¯ as four separate words.

Art Markham said...

"There’s not yet one example (I’ve asked) where his language has made it through to judicial review to determine whether it was more clear, or more accessible, than the usual language in a similar contract section."

If Ken's approach is being adopted in a few corners of the legal world - and it is - then I can't imagine any higher praise for it than this. If language becomes the subject of court proceedings, the one thing you can say with reasonable certainty is that there is something wrong with it. If language doesn't get to court, it's working as it should.

Jeff Gordon said...

Casey:

There’s a big difference between addressing the argument related to tested language, and addressing the fact that his language hasn’t been tested. Ken HAS stated that he finds the discussion around testing language to be a non-starter for exactly your listed reason, the circular argument that you can’t change anything until a court tests it and you can’t test anything until we change it.

But that’s not exactly true. Ken is advocating for change... with the assumption that the courts will find his reasoning (actually, just the verbiage, since the reasoning, unless explicitly stated in the contract, isn’t within the four corners of the document and won’t see the light of day) compelling and then agree with that reasoning.

My issue is that I don’t know how else to go about the change. It would be nice if Ken (as he’s published by the ABA) would get his language suggestions to start being baked into Hornbooks and Treatises. Or if there would be a judge or 10 (or 1000) that would write opinions that use Ken’s suggested language as an example of how to avoid issues (I don’t have Lexis/Westlaw, so I can’t look to see if it’s already happened).

But until that happens, I am pretty confident about the imprecise language currently used in most contracts and the resulting judicial interpretation such imprecision will bring. Thus, it’s not just about the language itself, but about its interpretation - and the predictive capacity I have with regards to my employer. And Ken doesn’t have a solution for that other than to say ‘just use my suggestions’.

So while I may like his suggestions, and have used some of them in discussing and negotiating contracts, I have to do what I think is best for my employer - which is to draft language that I have significant confidence will lead to an intended result, if tested.

D. Casey Flaherty said...

Jeff,

I'm sure you are a great guy. I'd be happy to buy you a beer if we ever have the opportunity. So don't take this the wrong way. But are you trolling me?

I have zero problem with the following. You come to some contractual language that strikes you as problematic. You look at Ken's proposed alternative. You like it. But then you research the relevant case law and find a clear consensus that convinces you to keep the language as is.

But I seriously doubt that is what happens.

First, you don't have access to a legal research platform. You admitted as much in your last comment.

Second, I've done case law research on contractual language as a litigator. Often there are no relevant decisions. Or there are relevant decisions but they are all over map and highly context specific. Or the only takeaway from the relevant decisions is that the language is problematic, which is why the contract is being litigated.

Ken is not shy. He is also not hard to find. He has his own blog. His email address is right there at the bottom. Because he has addressed the general concept of "tested language" so many times, I would avoid that as a topic. But if you have specific recommendations from MSCD with which you take issue because the case law is so clearly to the contrary, tell him what and why. I suspect you will get a considered, illuminating response.

 

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