[thomasbk]

If I remember correctly, it's not some arbitrary choice of the lawyers, but it can be required by law (under some interpretations?)

You should check with the lawyers if tampering with font size or spacing does not go against the reasons for using caps in the first place.

Edit: The reason this is done is the "Conspicuous" part at http://www.law.cornell.edu/ucc/1/1-201.html -- note in particular " Language in the body of a form is "conspicuous" if it is in larger or other contrasting type or color" -- your solution makes the capslock text _smaller_ than the normal text, which would possibly invalidate it. But, of course, IANAL, which is also why I don't tamper with my lawyers' texts without checking with them.

[malandrew]

You can use bold-faced text instead of all caps. If you have a true bold typeface (instead of applying a bold faux effect), then this will look nicer to read.