Legal Advice: Start With a Plain English Agreement That Covers Key Deal Points

My best business advice for managing a negotiation: start with a plain English agreement that covers the key deal points.

Start With a Plain English Agreement That Covers Key Deal Points

I am not an attorney. This is not legal advice, it’s business advice for managing a negotiation.

Back when I had a real job at Cisco a few years ago, I managed a webmaster who asked me to debug a problem with javascript embedded in the HTML for a page they had written. As we dug into about 30 lines of JavaScript, it became clear that three sections from different programs with inconsistent variable names had been glued together. The webmaster understood how to write good content and basic HTML and had viewed the JavaScript like a poem, assembling different stanzas from other pages in the hope they would form a coherent whole.

True story.

When I tell software engineers this story they often laugh. And then they realize that I am telling them the story because they have assembled a contract from different legalese they have found on the Internet in hopes of creating a legally binding and coherent whole.

I have seen firms give away the rights to their software because they didn’t understand the legal meaning of certain phrases they copied from a contract they found on the Internet. Another true story that happened to a client a few years ago. The other side was happy to sign because they understood what “work for hire” meant and were all too happy to enforce it later.

Nobody likes spending money on attorneys; entrepreneurs are not alone in this regard. However, you can always put a budget on their efforts (one rule of thumb is to spend 1% of the contract value on a legal review if you are bootstrapping) and ask an attorney to give you a prioritized list of risks. Many things that large firms pay attorneys to worry about are not worth spending attorney time on for an early-stage startup.

Focus on key risks, not every risk. Also, understand that to some attorneys, ‘doing nothing’ can represent the least risk, but to a bootstrapper, doing nothing means your runway keeps getting shorter. Doing nothing and taking no risks for long enough gives you the opportunity to ask for your old job back.

Find an attorney who is comfortable working with bootstrappers. Ask other bootstrappers who they use if need be.

Start with a plain English agreement that enables a meeting of the minds: it can just be a bulleted list of key points. If you are not an attorney, do not attempt to write “legalese.” This just sets you up for signing a contract that you have drafted but don’t really understand.

A plain English document affords the layperson (non-attorney) substantially more protection and is always more useful as a starting point. Even if the other side starts with a contract, take the time to reach an agreement on key points in plain English so that you can tell whether you are negotiating substance or style when you involve your own attorney.

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