What is the Best Document Editing Format for Exchanging Contract Redlines?

Key Takeaways:

• Between the top three document formats – Microsoft Word, PDF, and Google Docs – there is one clear preference for redlining contracts.
• Selection and use of the correct document formatting and editing tool is critical to maintaining efficient negotiations, a collaborative environment, and transparent dealings with involved parties.
• Contract redlining skills are a critical tool for better negotiation outcomes.

Should contract redlines be shared via Microsoft Word Track Changes, PDF redlines, or Google Docs? Seems straightforward but I have been a part of many (many) (MANY) heated🔥threads, chats, discussions, webinars, articles, and debates on this topic.

Even though a vast majority of in-house legal and contracts professionals are aligned on this point, we still love to debate the pros and cons of each document editing tool.

In this article, I will share the pros and cons of each of these three document formats and tell you the undeniable answer to this question. Whether you are in-house counsel, big law, private practice, procurement, legal ops, sales, or another type of contracts professional, this article applies to you.

Contract redlining is a universally applicable skill that should be standardized across the board to ensure maximum efficiency, transparency, and collaboration for everyone involved in the contract review process. In 2021, I published Contract Redlining Etiquette–the first and only standard approach to redlining contracts. An important part of redlining contracts is aligning on process with involved parties. The selection of the document format is the first step in this process.

Learn More: If you’re interested in learning more about contracts, join 18,000+ legal and contracts professionals by subscribing to the Contract Nerds 📄🤓 newsletter here: https://mailchi.mp/contractnerds.com/subscribe.

What are the Main Edit Features of Each Document Format?

To help us understand the technical pros and cons of each of these three document formats, I’ve created a comparison table to compare Microsoft Word, PDF, and Google Docs across fifteen editing features. 

FREE DOWNLOAD: You can download the full comparison chart here👇.

Top Three Reasons Microsoft Word is the Best Contract Redlining Format

As shown in the Feature Comparison Chart above, based on features and capabilities alone, Microsoft Word is the best tool for marking and exchanging redlines. Let’s take a deeper dive into the top three leading features. 

1. 🌏 Widespread User Adoption:

Microsoft Word is THE most widely adopted document editing tool around the world. In fact, according to this poll, 92% of contracts professionals use Microsoft Word to redline contracts. When most people in a field use the same tool, collaboration becomes significantly easier. Whether it’s sharing files, integrating workflows, or communicating seamlessly, a common platform removes friction and enhances efficiency. Using a widely adopted product means speaking the same “language” as peers, reducing compatibility issues and ensuring smoother interactions. 

2. 📲 Mobile Compatibility:

By the way, the top argument I heard in support of PDF redlines is that it is easier to review on mobile and that Microsoft Word did not have a mobile app with edit features. FALSE. I have researched this myself and can confirm that Microsoft Word does have a mobile app with basic Track Changes functionalities including markup, accept, reject, comment, and reply to comments. 

Learn More: 📩 My next edition of Read Between the Redlines will show you how to use Microsoft Word’s mobile editing features. Be sure to subscribe here so you don’t miss it!

3. 👍 Easy for Business Partners to Use:

Your business partners want you to keep contract reviews as simple as possible. They don’t want to have to download a new tool, or create a new login, or learn how to use a new product. They want to pop in and out of the contract quickly, skim most of it, and hone in on the pieces within the scope of their expertise. The business is already using Microsoft Word for general document creation and editing so it is a great starting point when inviting them into a contract review scenario.

What does this mean for you? It means that it is time for you to become a master of Microsoft Word, not just a “I think this is the right button” user. A “I’m not gonna sweat this formatting issue” user. A “locked documents don’t stop me” type of user. A “this contract is ready for your review earlier than I promised” type of user. 💪

Why Do Big Law Attorneys Like Using PDF Redlines?

1. ⚠️ Lack of Trust:

Common feedback I have received is that law firm attorneys don’t trust the other parties involved in the negotiation enough to give them an editable document. In this article I wrote for the ACC, I interviewed one of my big law M&A friends who said, “Maintaining clear and consistent document control is critical in an M&A deal. The complexity of the agreements and the need for input from multiple internal and external stakeholders creates a challenge for M&A lawyers. Many find using PDFs to be an effective way to manage that process, especially because PDFs are often easier to read in different formats (such as mobile).” I can see why big law attorneys feel the need to control the document, but control should not outweigh efficiency. The key is to strike a balance. Your internal validation process should not disrupt the natural flow of the external deal negotiation process. 

2. 💻 Technical Limitations:

Another common reason for preferring PDF redlines over Word redlines is technical limitations or unknowns. For example, law firm lawyers may not like or know how to use Microsoft Word; or their law firm’s document comparison tool may not be compatible with Word. Using Word can be tricky if lawyers don’t spend at least some time getting familiar with its features and limitations. In my ACC article, a law professor said, “While designed to promote collaboration and flexibility, certain functions within Word can lead to unintended, and sometimes undiscovered, consequences, if used incorrectly. For example, the Reject Change button and ability to easily toggle on and off tracked changes, can result in a redline that inadvertently does not truly reflect all changes to a document. That uncertainty makes outside counsel squirm. In a sense, static (or PDF) redlines at various stages of a contract’s lifecycle can serve as checkpoints along the way. However, that rigidity comes at a cost in terms of transaction velocity, collaboration, and legal spend — only emphasizing the importance of developing alignment between in-house and outside counsel from the outset.”

3. 📲 Mobile Compatibility:

Big law attorneys also like (need) to be connected and working 24/7/365 to hit their billables. They want to be able to redline contracts on an airplane, in an Uber, at their hotel, or standing in line for a coffee. They use tools like Litera which is designed for on-the-go lawyers. I often hear that they don’t like Microsoft Word because they’re unable to edit documents on-the-go through Word. But the great news is that Microsoft Word is catching up and adding mobile editing features! This will hopefully help us get big law attorneys on board with Word redlines, at least and especially when their client is an in-house attorney who is accustomed to using Word already. 

Top 3 Reasons Not to Send PDF Redlines

1. Slows Down the Deal:

After designing and implementing several contract review processes for various types of companies, I’ve learned that sending a template in a locked or PDF format rarely benefits anyone. It usually just wastes time by adding unnecessary back and forth emails and messing up document formatting when we try to DIY a workaround solution. Or it can lead to avoidance on the reviewer’s end–meaning they move it to the end of their to-do pile because they don’t want to deal with it. Ultimately slowing down the contract review process. The reality is that the document format shouldn’t stop a contract reviewer from proposing necessary changes or negotiating important terms. And it usually doesn’t. Putting up roadblocks and hurdles that you know are going to be circumvented or overwritten is pointless.

2. Does Promote Collaboration:

According to a poll I ran, 77% of people who receive a draft agreement in PDF format feel like their opinion doesn’t matter to the sender. 😯Do you really want to make your potential customers or vendors feel like that? No, you don’t. Because this type of negative feeling is what breaks deals. 

Here’s what folks said about the use of PDF redlines during commercial contract negotiations.

3. Does Not Contain All Necessary Editing Features:

If you are redlining in PDF, you are likely editing the document in Adobe Editor another PDF compatible tool like Litera. I have not analyzed Litera but Adobe Editor has limited track changes features. For example, it does not allow you to view the document from different perspectives so you can only view it with all redlines visible whereas Microsoft Word has different views that you can toggle between during the review process.

What to do if you receive PDF redlines (and You Don’t Want Them)?

So you’ve received a PDF version of a contract that you need to redline. Now what? 😧 

There are several ways you can approach the situation. The path you choose should really depend on your level of power in the negotiation compared to your counterparty, the amount of time you have before the agreement needs to be signed, and the volume of redlines provided.

1. Convert the Document to Word:

First, you can convert the document from Word to PDF format yourself. You can use Microsoft Word’s native document converter or Adobe Editor’s document converter. Both have been pretty good at resolving formatting differences lately. I understand that Google Docs also has a document conversion option and Adobe just launched the AI Acrobat Assistant that compares and summarizes documents, but I have not tested either out tool.

2. Request a Word version:

Second, you can use your awesome negotiation skills to get your counterparty to send you an unlocked Word version of the redlines. Ask them to send you the Word version in a professional tone and explain “why” it will be to their benefit to do so, i.e., it will speed up your review process. Remember, people are not inclined to change unless they have a really good reason to do so.

3. Work in Your Counterparty’s Format:

Of course, you always have the option of rolling up your sleeves and working within the constraints setup by your counterparty. This is usually the best move if you have little leverage and would rather focus your efforts on getting them to say yes to a substantive change. Or if you have very little time to get the deal signed and would rather just appease the other party for the sake of getting the contract closed on time. Another consideration is the cultural and geographic background of the party. Take the example below:

How to Uplevel Your Contract Redlining Skills Today!

Hi! My name is Nada Alnajafi. I’m Senior Corporate Counsel at Franklin Templeton, Founder of Contract Nerds, and author of Contract Redlining Etiquette. It’s safe to say that I love nerding out about contracts. And I’m guessing since you’re here that you do, too! You are in good company. 

Here are several ways to continue upleveling your contract redlining and negotiation skills with me:

• Buy the book on Amazon, available on Kindle or paperback.
• Sign up for my upcoming Contract Redlining Etiquette Masterclass for the deepest dive into contract redlining skills you will ever find. I’ll also send you a free Guide to the 10 Rules of Contract Redlining Etiquette and a 20% discount code to my course when it launches.
• Follow me on LinkedIn and subscribe to my Read Between the Redlines newsletter for more tips on using Microsoft Word to redline contracts.
• Subscribe to the free Contract Nerds newsletter and join 18,000+ lawyers and contracts professionals who love to nerd out about contracts.