All-caps text—meaning text where all the letters are capitalized—is best used sparingly.
In terms of legibility, all-caps text is harder to read than normal uncapitalized text. The shapes of letters—some tall (dhkl), some short (aens), some descending (gypq)—help us recognize words as we read. Capitalization homogenizes these shapes.
All-caps text is acceptable for short headings (less than one line), captions, footers, or other labels. All-caps text can be small. Always add some letterspacing to all-caps text make it easier to see each letter.
While it’s commonly seen in pleadings, there is no need to set the names of parties or key terms in all-caps (or worse still, all-caps and bold). You can refer to defendant Alpha Motor Company as Alpha—you don’t need to render it ALPHA or ALPHA.
When you set the defendant’s name as ALPHA you are putting visual speed bumps in every sentence that mentions ALPHA. As the habit multiplies, soon you are talking about how ALPHA and BETA conspired to make AIRBAGS that injured PLAINTIFF and the rest of the CLASS. You are not making your PLEADING easier to READ; you are just MAKING it more ANNOYING.
Sometimes capitalized text is required by law—for instance, California requires that defined terms in discovery requests be capitalized. (Cal. Civ. Proc. Code § 2030.060(e).) In that case, obey the law, of course. (Though if you’re feeling daring, you can use small caps.)
Avoid capitalizing LONGER blocks of text. This is common in contracts. Many lawyers seem to think that this makes a text block more authoritative, important, or attention-grabbing. BUT WHEN A text block IS SET IN ALL CAPS, IT’S MORE DIFFICULT TO READ BECAUSE ALL THE LETTERS ARE THE SAME HEIGHT. it’s even worse if it’s bold. as the paragraph wears on, your readers fatigue and their attention drifts. how about you? are you enjoying reading this? I’ll bet you want me to stop capitalizing. well, So do your readers.
All-caps text is an example of self-defeating typography: if there’s a particularly important part of your contract, the last thing you want is for your reader to skim over it because it’s difficult to read. To emphasize a section of a contract, put a border around it (example) or label it IMPORTANT. But leave the rest of the text uncapitalized.
If your all-caps text contains a statutory cite with a small-letter subdivision (e.g. § 1744(a)) don’t capitalize the subdivision—it may make the cite ambiguous or unclear.
(Confidential to those lawyers who append a lengthy all-caps disclaimer to every email they send: enough already.)