Red Line Workflow Guide
Master contract comparison and markup tracking. Learn best practices for managing multiple negotiation rounds, categorizing changes, and maintaining pristine audit trails.
The Golden Rule of Redlining
Only one party holds the pen at any given time
Never accept "piecemeal" edits (paragraphs sent via email body). Insist that all changes be made within the master document to prevent version conflicts and "forking."
In high-stakes M&A deals, a missing clause or untracked deletion can lead to millions in liability. The Red Line feature helps you maintain control and visibility over every change.
View Modes
Choose the view that best fits your current task:
Unified View
Single document with inline additions (green) and deletions (red strikethrough). Best for reviewing the full context.
Changes Only
Shows only modified sections. Ideal for quickly scanning what changed without reading the entire document.
Side-by-Side
Original and revised versions displayed in parallel. Best for detailed clause-by-clause comparison.
The Clean & Redline Protocol
When sending a new draft to the counterparty, always provide two files:
Clean Version
Word document with all changes accepted. The counterparty uses this as the base for their next turn.
Redline Version
PDF comparison showing exactly what changed from the immediate prior version.
Critical: Never rely on the counterparty's redline. Always run your own comparison against your last internal version to catch "silent changes"—accidental or intentional edits not tracked.
Categorizing Changes
Mage automatically categorizes changes to separate the "signal" (material business points) from the "noise" (formatting):
Material (Business/Commercial)
Escalate to Deal LeadsAffects valuation, risk allocation, or post-closing operations. Examples: Purchase price adjustments, non-compete duration, indemnity caps.
Material (Legal)
Handled by CounselAffects enforceability or legal exposure but not commercial deal. Examples: Dispute resolution, severability, governing law.
Non-Material
Junior Associate CleanupFormatting, grammar, phrasing preferences that do not change legal meaning. Cleaned up without occupying negotiation time.
Accept/Reject Workflow
Use Mage's accept/reject workflow to systematically process each change:
Change Review Panel
Original
...shall not exceed ten percent (10%) of the Purchase Price...
Proposed
...shall not exceed fifteen percent (15%) of the Purchase Price...
Managing Multiple Rounds
As negotiations progress, deal fatigue can set in. Use these strategies to keep momentum:
1Batched Turns
Avoid sending drafts back and forth for every minor update. Accumulate internal feedback from Tax, HR, and IP teams, consolidate into one master markup, and send a single "turn."
2The "Issues Call" Strategy
Don't negotiate line-by-line on calls. Instead:
- • Send the Issues List 24 hours before the call
- • Use the call to agree on the concept (e.g., "We agree to a cap of 15%")
- • Draft specific wording after the call
3Locking Sections
As rounds progress, explicitly agree to "close" sections. Example: "We have agreed on Reps and Warranties; Articles 3 and 4 are locked unless a new disclosure arises."
Maintaining Audit Trails
An audit trail serves two purposes: Internal History (Why did we agree to this?) and External Security (Who saw this?).
Internal (The "Why")
- Every version saved as a revision (v1, v2, v3)
- Context documented in Issues List, not just email
- Comments linked to specific changes
External (The "Who")
- VDR logs who accessed/downloaded each document
- Timestamps prove disclosure dates
- Execution Bible created immediately at closing
Version Naming Convention
Adopt a strict file naming convention to instantly identify any draft's status:
[Deal Name] - [Agreement Type] - [Party] Comments - [Date] - v[#]
Example
Project_Alpha - SPA - Buyer_Comments - 2024-12-10 - v4.docx