
Fucking Sue Me (2011) - dsr12
http://pud.com/post/10103947044/fucking-sue-me/
======
grellas
Lawyering in general, and business lawyering in particular, is an art in which
good judgment counts a lot more than mere technical precision.

From a lawyer perspective, a written contract may have all sorts of areas in
which it falls short of an ideal in capturing all key issues potentially
affecting a client. There are recitals (defining factual context), covenants
(setting forth promises), conditions (defining when an obligation kicks in),
and (often) representations and warranties (defining the extent to which
parties stand behind what is purporting to be sold, etc.). In _any_ of these
areas, a lawyer can potentially find things that are inconsistent with what a
client says the deal is supposed to be. Sometimes this happens because of
unequal bargaining power, where a big company essentially presents a host of
oppressive boilerplate terms and conditions as "take-it-or-leave-it" items.
Other times, it happens because of what I call "slicko" tactics by the other
party, where something that appears to say "x" in fact has a legal meaning of
"not x" owing to the use of weasel wording and the like. Still other times, it
happens because entrepreneurs are trying to cobble together their own contract
by picking and choosing what sounds good from others they have seen and, in
the process, failing to ensure that things don't conflict with each other or
perhaps just omitting to address key legal issues by having put an exclusive
focus on the business issues. Finally, it can come about simply because of
either poor drafting by a lawyer on the other side or simple attempts by a
party to overreach.

When you see this as a lawyer, what do you do about it?

First, the final say on such issues belongs to the client and not to the
lawyer. So, after a high-level assessment, you talk with your client, explain
the general range of issues and problems, and get direction on the desired
level of response. Is the deal such as even to warrant legal review? Is it to
be a high-level review only, just enough to let the client know what key risks
exist and to address only egregious things that go to the heart of the deal?
Is it to be comprehensive to try to catch and fix everything that is even
potentially material, even if it deals only with issues that are highly
unlikely to arise? Or is it to be something in between? This need not be an
elaborate discussion and often takes only a few minutes. But it is vital to
the process because it lets the client make an informed choice about how to
proceed with the legal review.

Having gotten client direction, it is still important in all but mega-deals to
keep a sharp practical focus in doing a review. What good is it to do a
scorched-earth review and markup if the result will be overkill that is likely
to alienate the other side (some lawyers who do this do deserve to be called
deal-killers)? It really is _poor_ business lawyering simply to proceed
unthinkingly and one-dimensionally in every case to review and mark up
_everything_ no matter how remote the risk or how likely it is to be material.
There is a dynamic to negotiations and nothing galls the parties more than to
have to sort through a lot of lawyer comments over what they see as non-
essential points for their deal.

On the other hand, it never pays arbitrarily to cut corners in doing a review.
Just because a client says "spend no more than an hour on this" doesn't mean a
proper review can be done with such bounds. If a lot is at stake, and a client
is just being penny-wise and pound-foolish, it is better not to do the review
at all than to gloss over all sorts of serious problems in the name of
economy.

The lesson from this piece, to me, is that entrepreneurs can do well in
keeping a sharp eye on the practicalities of managing their business
opportunities and they should not let lawyers get in the way of that. A
related lesson, in case a lawsuit ever did result on signing any complex
contract blindly, is that entrepreneurs can act foolishly in casually inviting
lawsuits by failing to manage the legal review process at all and simply
signing complex contracts as is. The net of this is: use your lawyers in
proper cases but make sure to use lawyers who have a good practical focus in
addition to legal skill and then manage that relationship to get what you need
from the services for your deal. In any deal that really matters, it is
usually a mistake to proceed without lawyers and it is an equally big mistake
to give the lawyers sole discretion in how to do the project. Be proactive and
smart in this, just as you would be in making any other business decision.

~~~
larrys
"There is a dynamic to negotiations and nothing galls the parties more than to
have to sort through a lot of lawyer comments over what they see as non-
essential points for their deal."

Isn't that a strategy sometimes used to wear down the other side and make it
hard for them to uncover the true intent of what one party is trying to slip
by the other party? Or give added ambiguity which can be beneficial to one
party or another?

~~~
nl
If one party is out to screw the other over, then lawyering might help some..
maybe.

But if you suspect this is the case, then in most cases the deal is going to
be more trouble than it is worth.

------
jballanc
The lesson, or at least the lesson I've learned from dealing with lawyers at
companies big and small, is that lawyering is a practice in making sure
nothing can possibly go wrong.

In a way, lawyers are the QA team for the legal world. They know that the shit
hitting the fan can potentially be _very_ expensive, so they will go to
extreme lengths to prevent any possibility of that happening. But just like
you cannot rely on your QA team to prioritize features and bug fixes (because,
really, who's going to click those 15 buttons in that precise order with that
precise timing to trigger that bug), you cannot rely on a lawyer to determine
your business plan.

Lawyers fill the role that lawyers fill. If you're an engineer, then you have
to fill the engineer role.

What is that role? My father is a mechanical engineer, and he explained to me
very early on just what it means to be an engineer. You see, an engineer
_could_ design a bridge that doesn't collapse and lasts for thousands of
years, but that's not the engineer's job. The job of an engineer is to take
the cost of materials, the budget, the expected longevity of the bridge, the
project schedule, the prevailing environmental and geological conditions of
the siting, etc. and balance _all_ of these different variables against each
other to arrive at a solution.

If we're programmers, then we're saying that we can write down instructions in
such a way that a computer can execute them and produce some output. If we're
software engineers, then we're saying that we can balance features, schedule,
bug fixes, test coverage, etc. and eventually _ship it_!

~~~
jnbiche
>The job of an engineer is to take the cost of materials, the budget, the
expected longevity of the bridge, the project schedule, the prevailing
environmental and geological conditions of the siting, etc. and balance all of
these different variable against each other to arrive at a solution

I'm not a lawyer, but I would assume that a good lawyer adopts an analogous
process: they take the value of the contract, the prevailing legal conditions,
the case history, etc., etc. and balance all these different variables against
each other to arrive at a solution.

I think the problem with many corporate lawyers is the same as with many
corporate programmers working at large, traditional corporations: risk takers
are heavily penalized, and those who make traditional, low-risk decisions are
rewarded. You know, the whole "nobody ever got fired for using Java" bit.

But lawyers working in private practice, or partners in firms with a lot of
power, will presumably be willing to balance risk against reward, and try to
optimize accordingly.

Lawyers: please correct me if I'm assuming incorrectly here.

~~~
btilly
_But lawyers working in private practice, or partners in firms with a lot of
power, will presumably be willing to balance risk against reward, and try to
optimize accordingly.

Lawyers: please correct me if I'm assuming incorrectly here._

I am not a lawyer, but you are certainly assuming incorrectly.

It is a lawyer's job to not only get you a good contract, but also to maximize
their billable hours. They do not gouge too aggressively - after all they want
future billable hours as well. But the risks and rewards that the lawyer is
balancing are their risks and rewards, which are not the same as yours.

~~~
rayiner
So what you have is a curve of diminishing returns. If you spend 2 hours on a
legal problem, you might get an incomplete result. If you spend 10 hours, you
might get something that meets the standards of good representation but still
leave a few avenues unexplored. If you spend 20 hours, you might be able to
explore those avenues and assure yourself that there are no risks lying there.
If you spend 30 yours, you might just be gouging on tangentially related
issues.

But you have a classic agency problem. It's in the lawyers interest to spend
20 hours, both because it increases hours and because that minimizes his
chance of being wrong. It's probably in the client's interest to go for the 10
hour solution, because whatever risk is created by those unexplored avenues is
likely outweighed by the extra time and cost.

Importantly, the threshold of risk is lower for the lawyer than for the
client. Say one of those unexplored avenues requires delaying some deal by 2
days. That delay may be monetarily inconsequential to the client but is
stinging for the lawyer because has advice has been found wanting, and that
jeopardizes the client relationship.

~~~
comrade_ogilvy
The other problem is if your lawyer spends 20 hours, the many requested
amendments are likely to prompt my lawyer to bill another 20 hours.

What happens then? Your lawyer has even more work to do.

The cycle can easily spiral.

Even for a 400k contract, it is not fun to feel nickeled and dimed with
multiple 5k bills from my law firm before any work gets done.

I would rather work with someone willing to sign an imperfect contract. Unless
you work very hard to tick me off, you have to do 50k worth of completely
egregious stupidity before it is likely to be worthwhile to see the inside of
a courtroom.

How likely is that? It is _never_ going to happen. If I hate the work you are
doing, I am going cancel the contract and never pay the final 100k or 200k you
bill. Then you can effin' sue me. (More likely, we will end up negotiating a
compromise...if we are not stupid buffoons.)

------
jasonkester
There's a simple reason why this works for small businesses: nobody sues a guy
with no money.

So if you're a sole proprietor scraping by and you piss off a giant company
with lawyers enough that they want to file a lawsuit against you, well, what's
the upside for them if they win? Tens of thousands of dollars in expenses on
their side, and roughly zero dollars in recovered costs from the business they
destroyed or the guy they sent in to bankruptcy.

Unless their goal is simply revenge, there's really no reason for them to
follow through with such a course of action.

~~~
pearjuice
Someone with 500k and a few employed certainly has money. This story was sheer
luck and is only showing off that.

~~~
benihana
I don't think you fully appreciate how expensive it is to go to court.

~~~
EarthLaunch
He knows more about court expenses, than you know about what he knows. Just
say "It's expensive to go to court", or better, just don't comment.

~~~
TeMPOraL
Completely off-topic, but your comment made me wonder:

Is there any way to formalize expressions like "he knows more about X than you
know about Y", where X and Y are different domains? Is there a way to quantify
it, to answer questions like "how much more"? Do we have any kind of well-
defined "unit of knowledge"?

Does anyone here knows of relevant math branch that talks about these
questions?

~~~
StevenXC
[http://en.wikipedia.org/wiki/Measure_(mathematics)](http://en.wikipedia.org/wiki/Measure_\(mathematics\))

A measure is a function on the subsets of a space which yields a non-negative
real number. For example, a measure of the triangle with vertices (0,0),
(2,0), and (6,0), is 6, the area of that triangle. Measure satisfies certain
nice properties, such as if A is a subset of B, then the measure of A is no
more than the measure of B.

So, I guess if you can define a reasonable measure on the spaces X and Y, you
can measure collections of X and collections of Y, and use the real numbers to
determine which is "more".

But this doesn't strike me as useful in any way other than the fun of abstract
mathematics. :-)

------
calinet6
Well this just makes you sound reckless and ignorant. I don't think you are.
The conclusion might be valuable; that taking risks is a necessary part of
business. But the way you get there is not by ignoring the risks, but by fully
understanding them and being prepared and willing to deal with the
consequences.

This is why you read the contract, understood it, and decided to sign it. It
was because you understood all the bad stuff that could happen, but you
decided to make it not happen or deal with the consequences. It was sort of a
dare in your agreement, a recognition that the agreement you were signing was
important but also impossibly complex (they always are), and that the larger
picture was more important.

Understanding that and making your decision is not the same as being lazy and
irresponsible, and I really don't think that's what you are if you've made it
any distance in business. Maybe some people are, I don't know. Cool story
though.

~~~
seanmcdirmid
This is from 1998 (written up in 2011), and was written by pud of
f*ckedcompany fame, I think. He probably doesn't read hackernews.

~~~
oskarth
He very much does.
[https://news.ycombinator.com/user?id=pud](https://news.ycombinator.com/user?id=pud)
(last comment was a month ago).

~~~
brazzy
So he very much does, but doesn't very much?

~~~
wging
That doesn't follow. Some people may read every day, but not have a lot to
say.

~~~
pud
:)

~~~
seanmcdirmid
Well, I was wrong, please forgive me. Big fan of your f*ckedcompany website
back in the day, wish it was still going!

------
mikro2nd
Had to laugh... in my one-man business (20 years and still going) I have
almost no "Standard Policies". Almost.

But one ironclad rule I do have is, "If a the CEO is a lawyer, run away. Away
is where you must run." Every time I've dealt with client companies run by a
lawyer it has been horrible. They seem incapable of signing a reasonable deal
and getting on with the business at hand, but insist on crossing every t and
dotting every i to the death. All the juice is sucked out of the deal before
it even begins.

Oh, and the only client I have ever had to see a lawyer over (to collect
outstanding invoices) was a law firm that had hired me to help them design a
software system for... Debt Collection. (I kid you not.)

~~~
ganeumann
I think there are two kinds of lawyers: the kind who want to utilize their law
school education to the fullest and the kind who have done that and realized
the cost-benefit to over-lawyering is negative. The second kind has reasonable
standard contracts and pretty much just refuses to spend more than a few
minutes changing them. The first kind has completely unreasonable contracts
and expects a long adversarial process to reach a reasonable contract.

But I agree with you because most lawyers are the first type.

------
jacobparker
Relevant Hark! A Vagrant:
[http://www.harkavagrant.com/index.php?id=206](http://www.harkavagrant.com/index.php?id=206)

~~~
wavefunction
I downvoted your post because it only contained a link to a web comic. If you
had provided some of your own opinions on the blog post or why the comic was
relevant to the blog post, I would have refrained.

I like to explain my downvotes when the downvoted post is not an obvious
troll.

~~~
vitalique
Do you also like to deliberately explain (at least to yourself) your upvotes
and all the cases when you didn't make your mind or mindfully decided not to
upvote or downvote? Not trolling you, I just have really hard time trying to
give my vote either way, and usually just move on to next comment or
submission.

~~~
wavefunction
I upvote posts that either I find to be consistent with my appraisals of the
subject in question (these are rare in terms of my total upvotes), posts that
contain well-reasoned opinions contrary to mine, or (the bulk of my upvotes)
posts that force me to consider aspects or perspectives I failed to consider
previous to reading.

It is the posts that cause me to redefine my understanding of subjects that
primarily receive my upvotes.

------
crusso
Like with a lot of advice on HN, take this article with a grain of salt and
pursue a balance while trying to understand the competing forces at work.

My experience with entrepreneurial legal paperwork was that I ignored it too
much in my early days and it bit me in the ass. When the money starts coming
in and egos grow large, people reach for their lawyers when there's too much
ambiguity in business relationships.

You don't want to kill opportunities with too much negotiation, but then again
you don't want to leave yourself too open to misunderstandings that could have
been avoided with a line or two in a contract.

~~~
inovica
Very well said. Everything went well for him in the deal and all was fine, but
what if it hadn't? I know a few people who have had serious problems because
of a lack of attention to detail with their legals (or just not caring) and
one of them was put out of business by it. I also know another guy who is
ruthless and enjoys the thrust and parry of suing people when they try to get
our of his 12-month contracts. I personally would rather take a more cautious
approach than rush into something. I sleep at night knowing that I have
covered myself and my family as best as I can

------
tqi
Isn't this a classic example of Survivorship Bias? i.e. you know who probably
doesn't write a lot of popular blog posts? Unsuccessful entrepreneurs who's
companies failed because of something in their contract that they didn't read.

But as with many things, the smart path is probably somewhere in between the
two extremes...

~~~
raldi
Bingo.

"Everyone says to wear seatbelts and buy homeowners insurance, but I never
have and I turned out fine! I'm not sure what the lesson is here."

------
raheemm
My risk-averse nature has been the #1 challenge in my startup life of the last
11 months.

I was worried about taking on a partner for 3 months. Finally I just decided
to skip that - it meant I'll grow slower.

I was worried about sending sales and marketing emails for 4 months. Finally,
I decided to announce my beta launch and offer discounts for anyone who signs
up. One customer signed up and paid for a year's subscription.

Because I had a customer, it forced me to stop dreaming about the perfect
product launch and just do my beta launch. Which happened 3 weeks ago.

Now I worry about losing that one customer because my beta product is not
perfect. Im also struggling with getting more customers. Why? Because I want
to create the most perfect email marketing funnel. I've been procrastinating
on this for a month now.

If I worried a lot less, things would happen so much faster.

~~~
StavrosK
That's not risk aversion, risk aversion is picking the safe way/minimizing
risk. What you're doing is actually increasing risk because you're too afraid
to handle things. There's no upside to that.

~~~
raheemm
My point is that risk is often perceived to be greater than it actually is. So
taking action in spite of the risk has two benefits - the real risk is exposed
and often less than what we imagined and progress is made from taking action.
True, this can lead to a stressful experience and perhaps recklessness.

------
JonFish85
As much as I admire the candor & spirit of this, at the same time, I'd hate to
have the chance of being completely destroyed by the lawyers. Dodged a bullet
in this case, but to me, the downside is not even close to worth the upside.
$400k contract, but if things go horribly awry, their lawyers are coming after
you for millions, and drag you through the mud. Not worth it, in my opinion.

~~~
ojbyrne
But from the other side, the perspective is probably:

\- legal fees are going to be in the $100k's

\- he clearly has little money, so even if we win, we'll end up garnishing his
wages for 40 years to get a fraction of what we sued for.

\- we might not win, then we're further in the hole

So take the loss and move on. Thus from pud's side it's not an insane risk,
but a calculated one.

~~~
brazzy
That assumes the other side is rational and motivated only by profit. Which is
not always a given (or possible to tell in advance).

~~~
JonFish85
I imagine there are cases where companies _have_ to go after bad contracts
even when they know they won't get their money. Whether it's a duty to their
shareholders, sending a message to future contractors, what-have-you. And
depending on the size of the company, their lawyers may be getting paid
regardless of whether they are doing this case or not (not really sure how
legal departments work).

------
jonnathanson
_" I'm not sure what the lesson is here."_

I'm not sure, and furthermore, I'm not sure I agree with being overly 'fuck-
it' about legal matters. But I _can_ tell you what it's like having been where
you were with the "endless lawyering," and why it sucked so badly.

I worked for a startup once in which our CEO was a really smart guy, but the
kind of smart guy that got overly worked up over tiny details and edge cases.
We'd spend months working through "what-ifs" in Powerpoint, Excel, or Visio,
instead of building and testing features. Anytime we wanted to make a
strategic decision, we'd need to run it by our extremely expensive law firm.
Picking the name (!) for our company took over $50,000 in legal bills and at
least 3 weeks of everyone's time. In retrospect, I'm amazed anything got built
at all.

The lesson I personally took from that experience was that entrepreneurs need
to make decisions, and often, they need to make them more quickly than they
feel comfortable doing. They might fuck up here or there. And one day, when
they're successful enough _actually_ to need to run everything by lawyers,
they can afford to do so. The ROI on legal fees and time is much more positive
when the nature of the threat is being measured in the millions or billions of
dollars. In the beginning, though, the biggest threat isn't a lawsuit; it's
running out of time and cash.

Lawyers still have their place, though. You need them in certain situations.
But they can't wear your balls for you. When you feel the need to run every
key decision through a third party, you're basically stripping the "E" out of
your "CEO" title.

Here's where I'll risk sounding contradictory: contracts are a crazy beast.
Given your circumstances, the "fucking sue me" approach probably made sense.
But you also got really lucky.

It's not a terrible idea to consult a lawyer if you're entering into an
agreement of a nature you've never taken on before (i.e., with a Fortune 500,
with a scope of work you're not used to handling, etc.). I say "consult with,"
though, not "tie up." Most Fortune 500s have a take-it-or-leave-it policy
w/r/t their contractors and their RFPs. They know they've got the bigger guns,
so you're kind of playing on their terms. No amount of lawyering on your end
is ever _truly_ going to overcome that home-court advantage of theirs. So it's
often a wasted and self-defeating effort to fight too hard on any terms --
with the possible exceptions of payment structure and timing (the ones that
affect your ability to keep the lights on), provided they seem overly wonky as
written. Fight to get paid on time, to get paid fairly, and so forth. Don't
fight over nice-to-haves, because you won't get them.

~~~
jonmrodriguez
Jesus Christ, $50k to pick the company name?? You could launch a whole new
product for that much.

~~~
StavrosK
Sure, but what will you call it?

~~~
tadfisher
Phoenix

~~~
lifeformed
University of Phoenix

------
skore
Maybe some more in-depth advice while not missing out on the profanity:

Fuck You Pay Me by Mike Monteiro[0]

(for the few who haven't seen it yet)

[0] [http://vimeo.com/22053820](http://vimeo.com/22053820)

------
mildtrepidation
_I 'm not sure what the lesson is here._

If a lesson would be considered an informative or useful conclusion based on
the circumstances and results described, I'd say the only lesson here is that
the author was very lucky despite what seems -- at least as described -- like
very risky behavior.

This definitely is not the way to run a business, particularly when there are
people depending on you. It's great that it went well, but "just sign it" is
very reckless, and "fucking sue me" is, quite literally, asking for it. If
you're not prepared for the eventuality of _being sued_ this is just an
unconscionable stance to take.

Yes, business almost always involves risk, but it's almost always possible to
take _calculated_ risks rather than throwing up your hands, signing whatever's
put in front of you, and hoping for the best.

~~~
jimhefferon
> calculated risks

Yes, you shouldn't agree to every crazy clause that is in a contract someone
sends you. But you also shouldn't get sucked into lawyering. Your lawyer is
paid to say "What about .." but it is kind of a YAGNI thing: the lawyer
meeting is a part of getting work done but don't let it be too big a part.

That's the _calculated_ part of your comment and personally, reading this post
in the past helped me to see that.

------
bananashake
There are a few lessons

1) redlining a contract too much can destroy deals. Some lawyers do this
instinctively but you should talk to your lawyer and review the changes and
make sure all are important to you.

2) when you are starting off in business you can take more risks. but, i think
that when you are established, it pays to be more cautious.

------
Spooky23
End of the day, this is risk management. The risk of getting sued over a deal
that doesn't happen is zero. The risk of getting sued for deal that goes
through is non-zero.

Here's a great example. If you want to do business with the State of New York,
there's a list of non-negotiable clauses that you need to agree to. (
[http://www.ogs.ny.gov/about/Docs/AppendixA.pdf](http://www.ogs.ny.gov/about/Docs/AppendixA.pdf)
)Several are onerous... you need to provide periodic reports about whether you
discriminate against your employees in Northern Ireland (whether you have them
or not).

As a smallish enterprise, you do not have the ability to negotiate with a big
org. So you need to decide: Do you want risk and a bag of money? Or no risk
and no money?

------
vladimirralev
Bad idea. Anyone who is offering hostile contract terms is very likely to use
them. Many of these terms are extremely expensive - such as non-compete or
excessive confidentiality, forcing you to put your name and reputation on the
line for shady business practices or excessive liability.

Even if they don't sue you, they may publicly call you unethical for signing
terms and then breaking them, turining the tables on you to sue them. It is
considered excusable if you are a very small guy who simply doesn't have any
other choice, but if you are a bigger company building on reputation you will
suffer from it.

------
Jugurtha
I think that there is inherently some risk taken in any endeavour. I think the
biggest risk is not doing anything. I agree on that.

Signing contracts without legal counsel might turn out okay, but legal counsel
is like insurance or a seat belt: You don't need it until you have an
accident.

It is dissuasive, and it is mitigating. i.e: Those who want to screw you will
think twice when you have an attorney, and if they wish to screw you, you have
a better chance to get screwed less if you have an attorney than if you
haven't.

On the other hand, it depends. Just as some seat belts and air-bags were
actually the cause of death of the car driver, it depends on your lawyers.
It's not a _generic_ term. One needs to find people who are well versed in the
matters, and the body of law is large, so one needs specialists in a field.
You can't get the best advice on start-ups from a lawyer who specializes in
divorces.

Again, on the other hand, Elon Musk once affirmed that they didn't have
lawyers because things were too complicated and it wouldn't make any sense to
them. That was back in 2003, I doubt things stayed the same. The stakes are
high, and a company like SpaceX ? I don't think they don't have lawyers.

------
keithrl
As a lawyer, that is a stupid attitude to have.

Having legal shit done correctly for start-up businesses is a lot like having
insurance. You'd prefer not to have to pay for insurance and you'll likely
never need it. But when you need insurance, you're glad you have it.

Same thing is true for having your legal ducks in a row. You hope you never
get sued or embroiled in a lawsuit, but if you do, you'll be glad you had
lawyers involved at the beginning.

------
krmmalik
So I've skimmed maybe the top 10 comments on this thread and it seems everyone
has gone off on a complete tangent. I'm seeing this more and more on HN.
_Maybe_ someone further down has covered the point but I'll say it anyway. The
lesson has nothing to do with a lawyer or hiring people. It's to do with
embracing uncertainty. That's the key take away here.

------
unclebucknasty
Years ago, I participated in a mutually beneficial potential partnership being
lawyered to death, and missed out on a great win. As a small business that was
approached by a large organization with potential to drive us a ton of new
customers, I had a great opportunity. But, I also saw some risk, due to the
sheer size. So, I let my lawyer review it, which initiated a death spiral.

In retrospect, there was nothing onerous in the initial proposal. My attorney
just wanted to cover all bases. That's how they envision their jobs: If a
client ends up in a bad situation that could have remotely been avoided, then
they have failed (in their eyes). But, there is sometimes no scale brought to
bear. Any degree of risk--no matter how small--becomes a point of contention.

The funny part is that I and the biz dev guy on the other side just wanted to
get it done. But, we became unwilling conduits for lawyers who tried to
eliminate all risk from their respective sides and we just wound up passing
marked-up agreements back and forth until we (and the deal) were exhausted.

So, I learned that all of this legal "protection" must be taken with a grain
of salt for the small business owner in particular. The upside is generally so
much greater than the risk for us, and in the off chance that the risk becomes
a reality, it can generally be mitigated then.

There is risk to simply being in business, especially in this litigious
society. So, you cannot deny yourself an opportunity simply because your
lawyer couldn't wrangle every last bit of risk out for you. And, when you
assume that posture of trying to eliminate risk completely from your side,
then you have to know that the legal folks on the other side will follow suit.
That's when the show stops.

The advice given to the author by his dad is exactly what I'd give to my kids,
minus the expletives.

------
eli
I think the larger (and IMHO better) lesson is that it's really important to
trust your clients and for them to trust you. That understanding is often more
important than the legally-binding fine print that you two have signed.

For example, if the client doesn't agree with the bill you presented them,
you're gonna have a problem regardless of what the contract says.

------
adammil
After handling lots of contracts back and forth, my experience is that you
avoid adding new conditions to a contract for a large company if you can, but
you had better remove anything that you don't intend to actually comply with.
As an independent contractor, I've had companies remove the insurance
requirement, non-solicitation, any unusual IP ownership clauses, etc. and
never lost a contract yet. I especially watch for clauses that affect my
ability to do my normal business with other companies after this work is
complete and anything that puts a weird reporting burden on myself. You'd be
surprised what's hidden in the company's contract boilerplate text that even
the company lawyers forgot about.

My overall goal when doing this is to ensure that when the work is done, the
customer signs off and the checks stop coming, that I don't owe them anything
more.

------
alan_cx
Forget the legal stuff, the lesson here is to just get on with stuff and
gather up and loose ends later. That's it.

------
Knight4
"Worry about that in 2 months,"

I can't help but cringe. I quit my former job at a startup because they owed
me 7 months salary. I really believed in the projects and in the CEO but, in
the end, he couldn't walk the talk.

It's a real shame because the company had - and still has - TONS of potential,
but management is appalling.

~~~
phpnode
I cringed reading your post, how on earth does someone get themselves into a
position where they are owed 7 months salary? What happened there? I hope you
managed to collect in the end

------
probablyfiction
> I’m not sure what the lesson is here.

Me either, but it was a good read.

------
OhHeyItsE
Good read. I get the message: done is better than perfect. However, in this
specific example, it's pretty terrible advice to sign a contract that leaves
you in a compromising position just to get a job. You'd probably be better off
signing no contract at all.

------
zefi
The lesson here is the same drawn from pg's essay on doing things that don't
scale - [http://paulgraham.com/ds.html](http://paulgraham.com/ds.html).

If you were a multibillion dollar company acting at scale, it would make sense
to spend time perfecting the contract. But because you could assess the risk
of failure for all elements of the project and felt comfortable with them,
there's little need to do the extra due diligence required by a company acting
on a larger scale.

The majority of a founder's job is making decisions. But the point at which a
decision needs to be made to be effective is the point where the founder often
has only 10% of the information needed to feel comfortable making it.

------
PhantomGremlin
The 20-something young hipsters in startups now, reading HN during compiles,
mostly think the sky is the limit. Salad days, nothing but good times ahead.
But we've seen this movie before, and it didn't end well the last time. The
whole frenetic startup scene will eventually blow up again. IMO.

Archive.org has quite a few captures of fuckedcompany.com, Pud's great site
chronicling the (previous) dot com bust. I don't know if they archived
everything; companies were blowing up on a daily basis, laying off people,
missing payroll, closing doors without notice.
[https://en.wikipedia.org/wiki/Fucked_Company](https://en.wikipedia.org/wiki/Fucked_Company)

------
petercooper
I've been trying to find a post by either Derek Sivers or Tim Ferriss along
these lines. It was about basically ignoring annoying rules and regulations if
the potential penalty was either small or unlikely to be incurred. Anyone
remember it?

~~~
lamby
It's certainly in the 4HWW book. Probably in the context of ignoring emails.

------
6d0debc071
Lawyers can either be your best friend or your worst enemy in getting a
contract worked out. If they're just posting letters back and forth at each
other, I'd try and find a different lawyer _fast_.

A conversation needs to take place with the interested parties so that people
know what they can compromise on and what they can't - see how much leeway
they're prepared to give each other. Marked up contracts, after the initial
exchange arguing about things that the client perhaps doesn't even care that
much about, is not such a conversation.

------
crazygringo
> _This lesson in total disregard for risk served me well. They say
> entrepreneurs are risk takers. I think of myself as too lazy and
> irresponsible to fully understand the risk._

I recall a study somewhere (can't find it now, unfortunately) that concluded:
it's not actually that entrepreneurs are people who intentionally take bigger
risks than others. It's that they have so much self-confidence that they
believe things are less risky than they really are -- somewhat self-
delusional, perhaps? But hey, that's how things get done.

------
dctoedt
Relevant: The funniest lawyer cartoon ever, at
[http://dilbert.com/strips/comic/2008-08-28/](http://dilbert.com/strips/comic/2008-08-28/)

------
josephjrobison
The fact that he closed with

"It works for me.

I’m not sure what the lesson is here."

Takes it from another 'oh this entrepreneur has a few specific experiences and
things he has business wisdom' to just funny and awesome.

~~~
rzimmerman
It turned from "I'm not a laywer, but.." to something that was unexpectedly
deep and thought provoking.

------
bcoughlan
Perhaps the lesson is that getting sued is an occupational hazard.

------
kaa2102
I don't think entrepreneurs should be lazy or blind to risk; rather, they
should use strategy, options and flexible arrangements to eliminate, minimize,
or transfer risk. Big companies didn't want to handle fraud for online
payments - Paypal founders figured it out. The OP could have brought the
employee on as an independent contractor. Moreover, forming a corporation
would help to limit the risk of non-delivery with the $400k contract.

------
ianstallings
Although I think you should _always_ have a lawyer around to highlight and
explain the risks, business is not always cut and dry and contracts disputes
sometimes require you go to court. After all, you just need an impartial party
to make a determination. It's part of business and entrepreneurs should get
used to it. Especially in our field where people throw around Intellectual
Property wants/demands so easily.

------
rrhyne
While I definately believe in taking risks, be sure to protect yourself. If
you are doing anything unique for a client protect your IP and have a non-
compete.

------
marincounty
Take the risk, but try to protect youself--become judgement proof if you can?
I sometimes think if you're doing something risky, with the real possibility
of getting sued it's not unreasonable to hide money in a tin can. Ha--Ha. Yes,
it's not conventional advice, but it might keep you from being homeless, or
despising all lawyers.

------
jwb119
The lesson from this isn't that you shouldn't get a lawyer to review your 400k
business critical contracts, it's that you should pick a lawyer who knows
what's important to fight about and what's not, and understands the objectives
of the business. The "Sue me!" attitude is pretty shortsighted thinking.

Disclaimer: lawyer here.

------
eplanit
You should not engage in contracts as an individual person. Form a corporation
(a sub-chapter S if you're a very small team or an individual). As owner of
the corporation, you can legally indemnify yourself. The company acts as a
shield to protect the assets of the owners/stakeholders.

------
workhere-io
_This lesson in total disregard for risk served me well. They say
entrepreneurs are risk takers. I think of myself as too lazy and irresponsible
to fully understand the risk._

This attitude works very well - right until everything goes horribly wrong and
you wished you had tried to minimize risks.

~~~
acjohnson55
No kidding! Can you say, "survivor bias"?

------
snorkel
It is a truth of business that contracts are mostly for defining expectations
and escape routes, but as long as the client is satisfied none of those
clauses will be enacted, especially because most businesses have more
important things to do then go to court.

------
DanBC
Just signing anything is great until they do sue you and you're fucking
screwed.

Tenancy agreements is one thing where it pays to look through and say "come
on, you didn't get a lawyer to draft this, let's cross these bits out."

------
mverwijs
Reminded me of "Screw you. Pay me.", a video that advices to get a lawyer
before you sign anything.

[https://news.ycombinator.com/item?id=2450424](https://news.ycombinator.com/item?id=2450424)

~~~
otikik
Note that the original video was titled "F*ck you. Pay me.". The linked
venturebeat article decided to use a synonym for some reason.

------
acidx
The title remembers me of the Sosumi sound that came with Mac System 7
onwards:
[https://en.wikipedia.org/wiki/Sosumi](https://en.wikipedia.org/wiki/Sosumi)

------
mydpy
By following the advice in this blog, aren't we letting the big corporations
hold all the legal cards and potentially put smaller operations in very
uncomfortable positions? That isn't right.

------
thebandrews
How did this make it to the front page of hacker news for a second time?

[https://news.ycombinator.com/item?id=2985195](https://news.ycombinator.com/item?id=2985195)

------
Yuioup
The lesson here is that you couldn't resist bragging about the fact that you
briefly made an exorbitant amount of cash during the DotCom bubble ... and
that your dad is a bad-ass.

------
ktran03
As a newish freelance/contractor, what stood out to me is that's a shit tonne
of money made there. I wonder if there's contracts close to that floating
around still.

------
teeja
I never heard Robert Young say "fucking sue me" in _Father Knows Best_. But
then fathers don't wear fucking fedoras these days either.

------
call
Previous discussion, posted by the OP.

[https://news.ycombinator.com/item?id=2985195](https://news.ycombinator.com/item?id=2985195)

------
suyash
$400,000 for an e-commerce site? Can't believe that happened. Anyone can point
me or tips as to how to get those 6figure plus contracts now days?

------
FrankenPC
The only downside to this article is the URL with profanity in it...apparently
it can't make it through my corporate firewall!

------
Silent_Wolf
In this case you should have gone to a lawyer who knows this type of biz. not
some random or general lawyer lol

------
lnanek2
I have seen many deals die with the lawyering back and forth, even if both
parties agreed on the essentials.

------
grandalf
Not getting a good contractual arrangement is all fun and games until you're
the Winklevoss twins.

------
jesusthatsgreat
this is an attitude that you need to _earn_ , not the kind of attitude that
you should start out with...

the reality is bad things happen sooner or later and this attitude banks
entirely on linear growth. the bigger you are the harder you fall, so if
you're hiring employees without knowing whether you can afford them or not,
then that's just wreckless and shouldn't be praised or encouraged.

it's almost an 'all or nothing' approach where you reinvest everything you
earn indefinitely because you want the snowball to keep growing. sooner or
later, the snowball will start melting or you'll have to push it uphill and
this philosophy will have to be 'put right' by sensible people who only spend
what they know they can afford.

it's a bit like playing the lottery and the guy that wins is giving advice to
those who want to win - "play every week, buy as much as you can, that was my
secret"... yeah, well that will work for some people, but for most people it
won't work.

------
skidoo
This ideology works wonders within the United States government's war on
terror especially.

------
vph
The obvious lesson here is: listen to dad. If you are starting out, have a
mentor.

------
aceperry
"It works for me.

I’m not sure what the lesson is here."

The lesson is: he needs to get sued. :-)

------
presspot
Well put.

