What Lawyers could Learn from Programmers 2
AmLaw Daily has a great interview with Richard Susskind about his new book The End of Lawyers?: Rethinking the Nature of Legal Services
The book points to a future in which conventional legal advisers will be much less prominent in society than today and, in some walks of life, will indeed have no visibility at all. This, I believe, is where we will be taken by two forces: by a market pull towards commoditization and by pervasive development and uptake of information technology. At the same time, I identify a whole new set of jobs for lawyers who are prepared to spread their wings.
The fact of the matter is that almost everything that is not highly specialized has come down in price due to technology and commoditization. Richard argues that lawyers have fought against this for too long and need to start changing the way they do business or they will loose for good.
The cost for entrepreneurs of almost all repetitive non specialized things is trending towards zero. We all know that having our own server farm is now pretty much a silly thing to do, unless you are in the server farm business.
Ruby on Rails and Agile methodologies also introduced us to the innovative concept that our smartest most creative people shouldn’t spend 90% of their time on boring repetitive things like configuration and requirements documents.
Why should we still pay top dollars to lawyers for them to fill out word templates or advice us on simple things that google could solve just as easy for us? Why use a law firm to pay a premium on incorporation when 100s of companies who do this well are competing for your business via Google Ads?
Fear, Uncertainty and Doubt
The simple fact is that we pay big bucks to lawyers for silly tasks because of the centuries old campaign of FUD spread by the law industry about people doing things for themselves.
Like Interior Designers lawyers have essentially managed to run an outdated protection racket in the US. Each state has a private association known as a Bar Association which has a state granted monopoly on deciding who can practice law and also pretty much in deciding what “practice of law” means.
Nolo Press and Agree2 are forced by these rules to put silly disclaimers like this on our sites and books:
These also try as much as they possibly can to retain the lawyers monopoly on filling out word templates.
Legalese is another weapon for creating FUD in entrepreneurs. If you look at a contract and can’t understand it, the theory goes you should call a lawyer and have him revise it. Most don’t and hope everything is fine.
Law scholar Adam Freedman who wrote the brilliant Party of the First Part argues that legalese as a concept was pretty much invented and has been preserved by the law profession as a method of job protection over 500 ago.
The current argument I most hear from people who should know better is that each silly little piece of legalese is there because it has a specific legal meaning within the court.
I call total BS on this. If engineers believed in this we would still be riding our cotton to market on a horse drawn carriage. Judges are people. The vast majority of them very intelligent and perfectly able to understand plain English. If some new precedents have to be created so be it.
I know many programmers who live by these same principles. Talking technical BS where it isn’t necessary and overcomplicating architectures and code to preserve their jobs. It’s BS when we do it, it is BS when lawyers do it.
The good news is that the programmers who broke with this BS of the secret brotherhood of programmers now have more work than they can handle and bill at much higher rates, due to previously unheard levels of trust between the client and the programmer. I’m certain the same will be true for the lawyers who break the ranks of secret hand shakes, double talk and word templates.
the lawyers who break with tradition and build new traditions will probably end up with more work than they can handle. The ones who don’t will loose out to Agile US Lawyers, Online services and offshoreing, just like what happened in the US IT industry.
We need more simple on-line legal services
In the comments to the above interview Patrick McKenna says:
Online subscription services typically require a significant initial investment in non-billable time to establish and then take about three years to break-even. Those on-line services that were launched by many UK law firms five or more years ago are proving to be extremely profitable today. Meanwhile, too many US firms are obsessively intent on short-term billable hour requirements to consider making longer-term investments of this nature.
Just imagine the cool and profitable services a smart innovative (Agile) lawyer could come up with working with one or two good programmers.
Online company registration systems are a great example. They can and should be a lot more innovative. In the UK there are several law firms and Accountancies that offer legal/accounting services as complete package deals. Almost all US services are stuck in the Web 1.0/AOL era.
A corporate structure can easily be standardized with an online service to handle meetings, share registers and all standard form documents people use now. Innovate and make a lot more than you would billing people for dum repetitive work. Then focus on being their on standby for more traditional creative work for your now much larger client roster.
Shameless self promotion alert: We at Agree2 are trying to create a system for both lawyers and non-lawyers to manage agreements and legal templates. Our API would allow you to easily create and manage such services. If you have any ideas or would like to talk to us about it please email me personally at pelle@stakeventures.com.
Be the next Lawrence Lessig
The GPL revolutionized software. Several years later Lawrence Lessig helped revolutionize the world of publishing with the Creative Commons License.
There are lots of other things that need revolutionizing. I’m in the Legal Committee of the Open Web Foundation where we are trying to create an open standard IPR license to allow employees of companies to be able to work on web specs without fear of IP attacks. This is important work, but there are lot more interesting things that should be commoditized.
Imagine when talking to prospective employees or investors that you could say we are incorporated under the CCA (Common Corporate Agreement). This imaginary package would be a standard Articles of Incorporation, Memoranda of Incorporation etc. It would be written in as plain English as possible and be sufficiently good to protect both founders and investors. The idea is like the GPL it is a common non negotiated concept that everyone understands.
Y Combinator have graciously published their package of Series AA Equity Financing Documents which offers some of this. Y Combinator have managed to standardize a lot of these things as part of their own business model, which is great. However they are not a well analyzed immutable generic object like the GPL. For more on these documents checkout The Startup Lawyers Analysis.
This is where someone like Lawrence Lessig comes in. A sharp charismatic lawyer who is willing to take on the existing traditions. We the entrepreneurs are willing to follow you. If you are such a lawyer read Seth Godin’s Tribes
Create a simple NDA with zero legalese in no time at all and for free at our service Agree2.
Who is supposed to draft your agreements? You are!!! 2
We’ve already seen what happens when you leave drafting your agreements entirely to an uninterested legal team.
Yet people still have their lawyers draft up an agreement, which more than likely for most contracts really is a paralegal filling out a word template. There are lots of myths surrounding agreements that I wrote about earlier in It wont hold up in Court.
I can’t stress enough that an agreement is not between lawyers, it’s between it’s parties. You as the entrepreneur and the other party, whether it is your users in a User Agreement, your client in a consulting agreement or an investor in a term sheet.
Yes for many of these you need to bring lawyers in. In particular high value risky agreements such as Term Sheets you need lawyers to help you out. That does not remove your responsibility however to understand the core of the agreement.
The mysterious Uncle Saul who is now one of my favorite bloggers says in his great post Roping in the Legal Eagles :
As the businessperson with the most intimate knowledge of a particular deal, you should draft as much of the “business-oriented text” of your contracts as possible. At the very least, you or the appropriate member of your team should document the primary deal points in bullet-point form. The more specifically you document the business terms, the fewer iterations will be required to finalize the agreement. Even a highly attentive, business-oriented lawyer cannot put himself in your shoes. They do not work at your company, so there is no way they will have your insights. Thus, the more work you do upfront to document the business issues, the less you will ultimately be charged and the more closely the agreement will reflect the spirit of your verbal negotiations.
Your Lawyers do NOT and can NOT understand every aspect of your business. Only you and your team have that knowledge. Uncle Saul continues:
There is no magic language which makes an agreement legally binding; in fact, in most cases, the simpler the text, the better. Many a binding contract has been written on the equivalent of the back of a napkin. Once you draft the straightforward text, sans the legal mumbo-jumbo, ask your lawyer to review the text to ensure your layman descriptions do not result in an unintended interpretation. As noted in Tom and Huck, plans and agreements written in plain language reduce confusion and benefit all parties. If you select the right lawyer, he will not load up your text with gratuitous legal jargon (leave that job to the BDC’s legal squad).
Go read the rest of Roping in the Legal Eagles for more tips on how to create and deal with a good legal team.
I guess my best advise here is to remember that it is your job as an entrepreneur to take risks. It is the lawyers job to avoid risk. Don’t let the lawyer talk you out of risks worth taking, have him educate you so you can make the decision if the risk is worth taking.
Create a simple NDA with zero legalese in no time at all and for free at our service Agree2.
Negotiating contracts with Big Companies
Just discovered a great article Kiss of Death – Contract Provisions Entrepreneurs Should Avoid at All Costs about dealing with Big Companies from InfoChackie.
The mysterious Uncle Saul as he calls himself has a wealth of tips about dealing with what he calls BDC’s (Big Dumb Companies) or as I like to call them Kim Jong-Il.
Big companies can be extremely tempting to deal with. They’ve got lots of money, they validate your business idea and you know it sounds great to brag about signing a deal with company X.
However as Uncle Saul says beware. Big companies are often run by all kinds of internal politics and have bureaucracy’s you couldn’t imagine. I have personally seen many small companies die because they either were desperate to sign a deal with a Big company or actually did and then got screwed.
That said, if you manage it right. Keep the control on your side and know when to cut your losses there are lots of opportunities for the smart entrepreneur. Uncle Saul describes in detail the contract negotiation part, which really is the single most critical part of dealing with these kinds of companies.
How the Google EULA controversy shows the problems with lawyer written agreements 1
By now you have no doubt heard about the issue with Google’s Chrome End User License Agreement (or EULA).
The original clause of concern was:
1.1 You retain copyright and any other rights that you already hold in Content that you submit, post or display on or through the Services. By submitting, posting or displaying the content, you give Google a perpetual, irrevocable, worldwide, royalty-free and non-exclusive licence to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content that you submit, post or display on or through the Services. This licence is for the sole purpose of enabling Google to display, distribute and promote the Services and may be revoked for certain Services as defined in the Additional Terms of those Services.
In theory this pretty much gave Google rights to anything you do through your browser. In practice as it is a non negotiated contract of adhesion this clause probably wouldn’t hold up in court anyway. (If they used Agree2 it would though)
Anyway Google changed it to:
11.1 You retain copyright and any other rights you already hold in Content which you submit, post or display on or through, the Services.
Ars Technica has the full story on the change with this choice quote from Google’s Senior Product Counsel (read lawyer) for google Chrome:
Google’s Rebecca Ward, Senior Product Counsel for Google Chrome, now tells Ars Technica that the company tries to reuse these licenses as much as possible, “in order to keep things simple for our users.” Ward admits that sometimes “this means that the legal terms for a specific product may include terms that don’t apply well to the use of that product” and says that Google is “working quickly to remove language from Section 11 of the current Google Chrome terms of service. This change will apply retroactively to all users who have downloaded Google Chrome.”
This to me is why you really should not leave these to lawyers. Lawyers will almost always copy and paste rather than look at the real needs of your service, situation or offering. This is as she says exactly what She did. Without at any point thinking that this does not in any way make sense for a browser.
Too many people (such as Rafe) hold lawyers up on such a pedestal that they forget that it is them the owners, product managers or what have you that really understand the product. I am not saying don’t use lawyers, just check it over and refuse anything that doesn’t make sense. Also tell them your concerns and needs with the agreement before hand.
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Openness and the OAuth Legal Dance 2
I’m sitting at the OAuth Summit held at Yahoo in Santa Clara. We’ve had a brief discussion about the IPR policy negotiation process that has been going on in the background between a few core OAuth people and legal departments in various large companies (most notably Yahoo, Google and Microsoft).
Briefly the IPR policy allows employees at large companies to collaborate on the standard while promising to not sue anyone who uses their companies Intellectual Property through use of the standard. So basically Yahoo can’t come sue anyone using OAuth for using some patented algorithm they submitted to OAuth.
The IPR policy is important and good work. That said the current second revision of this is essentially a secret document that will be presented signed, sealed and delivered to us b-list members of the community in a week or twos time.
The community created the OAuth Non-Assertion Covenant and Author’s Contribution License which all the original OAuth spec signers have signed with the exception of Yahoo.
Eran told us today that apparently Yahoo stalled the process in their legal department as they needed a more detailed agreement. This is fine and great feedback, however these comments should somehow be made public so we the community also can follow it and make comments.
I realize that most developers don’t want to follow this, however it is important that it is transparent and googlable. I suggest a OAuth-legal group, the same way OpenID does or a continuation of the existing IPR License on Agree2 which does offer comments, versioning and a full transparent audit trail.
One comment I was given was that we should let lawyers talk with lawyers. I have to call bullshit on that. These kinds of things are way too important to be left in the hand of lawyers without any kind of external oversight.
Gabe has been doing a great job representing us (the OAuth community), however there are lots of people with opinion on this who would like to follow it and voice occasional opinions. Those of us who are building businesses around OAuth based services need to feel comfortable that we aren’t going to be screwed by some indecipherable legalese in the future. More important if there are disputes in the future the negotiation trail is key for solving them.
The final comment I heard is that large companies like Yahoo and Microsoft don’t want to make it public that they are negotiating this. I’m sorry that is even greater bullshit, thats pre-cluetrain, pre internet thought.
Get with the program. Yahoo has more to loose by not using OAuth than us in the OAuth community have to loose by them not joining us. I’m sorry if thats the way it’s done, I don’t care. This is not the world of industrial age negotiation in smoke filled private lounges. You guys are all internet companies for god sake.
OAuth is about open transparent simple standards for creating a infrastructure thats open to all of us and not just Google, Yahoo and Microsoft. Any negotiations behind it should be too.
Update July 2nd, 2008 Here is the latest version of the OAuth Non-Assertion Covenant and Author’s Contribution License For OAuth Specification 1.0
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