I don’t know of a rule, but I certainly prefer your adjusted version.

—Michael.

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// love what you do or do something else. //
Michael Ebert — graphic designer, jazz saxophonist, horror movie devotee
http://homepage.mac.com/mwebert
mwebert@mac.com
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Kerning depends on the scale that the finished object is going to be seen at, so a headline will probably need tighter kerning than body copy. At the scale it is showing on my screen I would say your “as” is okay but the apostrophe should move slightly to the right. Given the tightness of Alterations, the a’s does leap out but you shouldn’t hide the meaning just because it looks ugly.
Tim

but the apostrophe should move slightly to the right.

Good eye.

It seems quite a few apostrophe’s display poorly to my eye. Can kerning pairs withing the font contain an apostrophe?

As I understand it, you can set the kerning pair for apostrophe+s (or any other) and you could set pairs up for a-z+apostrophe although if you set the sidebearings well on the apostrophe you shouldn’t need to do all of them. But even so one can only do an optimum spacing for a perceived use, so a display face might be tighter than a text face, but if you use a text face at a large size you should bear that in mind.
Tim