Nivi · January 15th, 2010
Yesterday, we published Top 10 reasons why entrepreneurs hate lawyers, a sponsor post by Scott Edward Walker. Scott’s a lawyer.
“Thanks for the link to my tweet, Scott.
“You cover the problems very well. My particular gripe in that tweet had to do with the practice of billing up several hours to answer a question asked in email, when all that was really wanted was the answer *if* the lawyer knew it off the top of their head. Next time I start a small company I’m going to have a policy that any hours billed need to be approved in advance, after estimates of how many they will be are given.
“You’re very right about the over-lawyering, and the NVCA docs in particular. There’s no reason in principle why one couldn’t take an NVCA document verbatim and simply fill in the blanks and do a round of funding without needing a lawyer at all. The contracts which people go into when they buy a candy bar are equivalently complex, but they’re implicit and contained in the uniform commercial code, and always going with the boilerplate works for everybody.
“Associates doing work is a real problem. I’ve found that insisting that all work be done by partners results in better work for less money in the end, even though the nominal hourly rate is much higher, because an associate will bill for several hours researching a subject which the partner already knows off the top of their head.
“Not only is the biggest problem with lawyers them being deal-killers, but being general activity killers. Too many inexperienced entrepeneurs get into ‘The lawyers say we can’t do X” disease. Lawyers can’t tell you you can’t do something. They can warn you about risks, and in extreme cases tell you that something is such a bad idea you’ll need to get someone other than them to do it (although I’ve never personally been told that) but the judgment call of whether the risk is worth it is the entrepreneur’s. Since lawyers are trained in risks and don’t generally even think about the business, they always advocate being overly conservative, sometimes to ridiculous excess.
“All this sounds much more negative on lawyers than I generally feel. I view lawyers as performing a necessary function, but their costs can easily skyrocket and need to be contained, and their advice needs to be taken with a very large grain of salt. I don’t have the deep distrust for them that I have of, say, sysadmins and HR directors, who who are entrusted with running the core systems for a company and can easily get away with all kinds of stuff if they’re of dubious ethics.”
Bram, if you’re reading this, can you share more lawyer hacks and maybe tell us about your experiences with sysadmins and HR directors?