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It’s true. Our counsel informed us that we didn’t need to register. Counsel was wrong. Now we have new counsel :) We’ve submitted all the paperwork and have wo
by austenallred 7y ago
It’s true. Our counsel informed us that we didn’t need to register. Counsel was wrong. Now we have new counsel :)
We’ve submitted all the paperwork and have worked closely with California. This all happened a long time ago.
I’m not sure what the right level of regulation is (it’s hard taking care of 50 states at once - one state registration was 2,277 pages and weighed 25 pounds https://twitter.com/austen/status/1153450365712388096?s=21 https://twitter.com/austen/status/1153450365712388096?s=21), but it’s reasonable that it would be regulated somehow.
- algodaily 7y agoGlad you got it sorted out!
- moate 7y agoGlad you got that sorted out. Lambda school does seem to be "one of the good guys" out there in this market, so I'm glad to see you're taking the steps to keep that reputation.
- austenallred 7y agoWe’re trying
- TimTheTinker 7y agoNot directing this at you, but to all - this is a concrete example of why you shouldn’t blindly trust legal (or medical, or spiritual) advice. Ask questions, make sure you understand, and think critically. No one is infallible.
- austenallred 7y agoCorrect. Live and learn.
- Chris2048 7y agoI thought lawyers are liable for bad advice?
- austenallred 7y agoIf that were actually true they’d all go out of business.
- Scoundreller 7y agoThey do/should have insurance for this kind of thing. And usually lawyers are personally liable, so there is no “going out of business” unless they go personally bankrupt. Dunno how true all of the above is in CA. Get your own lawyer’s advice :)
- mc32 7y agoLegal counsel is about risk mitigation: do we fire this person? The question isn’t whether it’s moral or ethical. It’s what the risk exposure? What are the likely outcomes? Do we have our bases covered? Fire them! (Or, we can’t, it overexposes us, create a new department, assign them and then dissolve the department some time later and declare them redundant).
- Chris2048 7y agoI'm not sure what you mean by this. When counsel tell you something is legal, and it isn't, there's little subjectivity.
- fhbdukfrh 7y agoThe law has a few concrete, definitive truths but a huge volume of interpreted and subjective (and contradictory) statutes as well. Otherwise we wouldn't need lawyers in the first place
- vageli 7y agoExactly this! If the outcome for every case could be known in advance algorithmically or something we wouldn't have lawyers. Since the law is written by people and interpreted by people, it remains blurry when you zoom in close enough to specific unsettled cases.
- rolltiide 7y agoI think this is a concrete example of why to blindly trust legal advice. There are some laws explicitly written to say that ignorance of the law is an excuse. "knowing an willing violation" (I don't know if this is one of them though) Taking that to the logical extreme of having a legal opinion with every email puts you in a very privileged situation with the state It exponentially increases the cost of the state to investigate. The state now knows you have a lawyer already, but doesn't know the contents of the advice and doesn't get to use things under attorney-client privilege even if a judge approved a fishing expedition that exposed your digital artifacts. And in the meantime it lowers your compliance burden if the advice says you don't have to comply, depending on how you compensate your lawyer your costs were super low. If there is potentially criminal liability, but the burden of proof is a knowing and willful violation, then you're practically exempt because of the lawyer on payroll. So in this case they negotiated the fine and get to improve operations. Costs of investigating and prosecuting aside, the state likes to see a rationale for compliance. The lawyer also provides that, which you would prefer to have some case law to support it. This doesn't result in sanctioning the lawyer, its just not worth it to the state.
- testvox 7y agoKnowingly and willingly usually refers to the level level of awareness that is required to be held culpable for a crime or violation. If the Lambda school was unaware that they were committing the conduct proscribed by law then they would have a defense (assuming knowingly and willingly was the standard required). However they do not need to be aware that the conduct was proscribed by law, just of the the conduct itself.
- deleted 7y ago[deleted]
- duxup 7y agoReminds me of this story: https://a16z.com/2014/02/06/why-i-did-not-go-to-jail/ https://a16z.com/2014/02/06/why-i-did-not-go-to-jail/ TL;DR, A widely respected CFO makes a suggestion regarding stock and being competitive as far as employee compensation. CFO says that they have done the same thing at numerous companies. The CEO is not very knowledgeable and asks the general council (who unlike a lot of places at the time reports directly to the CEO, not the CFO) to weigh in. General council says don't do it, so they don't. 2 years later, CFO goes to jail, CEO and everyone else stays out of jail because of a good decision. I would extend your lesson and say to be sure you are asking a lawyer who has knowledge / experience in the area of law you're asking about.
- ww520 7y agoThat's an amazing story. Did PWC's people go to jail as well?
- duxup 7y agoI don't know as I've no specific information on what they actually did. However, it sounds a bit like backdating stock options type thing, and a fair amount of people went to jail over that across various industries.
- icelancer 7y agoA bunch of companies did it simply because they thought it was best practice, not for specifically immoral means. The majority of people who did it accidentally and could prove it with a paper trail of trying to follow auditors best practices got off with fines / warnings, which seems appropriate.
- duxup 7y agoBack dating stock options (i'm still assuming that is what the situation was, I do not know) certainly was commonplace, I don't know how many people really knew the law. I DO think there is something that should set off someone's spidy sense that "Wait, we're changing the dates on these options that already exist?" or "We're lying about the dates / price these options were really granted at?". To me at least that raises a lot of questions just changing the date on something financal to say it happened in the past like magic. I'm not a lawyer, but I'd be very nervous about that.
- staticautomatic 7y agoIn some instances, reliance on counsel's opinion can at least be a defense against claims that you intentionally did something wrong.
- scarface74 7y agoThere is no such thing as “trusting” spiritual advice. By definition, there is no scientific way of confirming whether the advice is good. But the legal system is so complex, how are you as a laymen suppose to verify it if you are basically the test case for trying something new?
- bushido 7y agoLegal advise can be tricky, specially when trying to do something new. I have seen a few situations where this scenario played out Out of curiosity, was the paperwork cumbersome, or did the old counsel just not know? note: I considered rewording the "not know" bit since regulations can be tricky, there can be other reasons why they might've felt that the need to register wasn't there. Most of which I feel, for counsels, falls into the didn't know, didn't look category.
- austenallred 7y agoOld counsel read the regulation passed by the BPPE and said it didn’t apply to us because we didn’t have physical classrooms. The BPPE disagreed. It took two people two months full-time to prepare and submit.
- bushido 7y agoThat amount of paperwork sounds for a lack of a better word – insane. I can't see it being easy for any side of this quantity of paperwork being able to get it right easily. Perhaps there is an opportunity for some start-up to help solve this. -- On a different note, I love what you folks are doing and keep pitching lambda to folks who're stuck in long uber/lyft rides with me.
- austenallred 7y agoWe’re lucky enough to have enough time/money to assign people to it full-time. I don’t know how a small school would comply.
- deleted 7y ago[deleted]
- dsfyu404ed 7y ago>specially when trying to do something new New is the easiest case. If your "new thing" entrenches the status quo and generally benefits those on the top of society the law will be interpreted as in your favor as it can possibly be. If your "new thing" threatens the status quo or makes the poor more able to annoy those on the top of society the legal system will go through whatever contortions it must to throw up roadblock after roadblock. If your "new thing" is somewhere in between or if most people are indifferent but there's small vocal minorities who feel strongly for/against your thing that's where it gets interesting.
- libria 7y agoGood on you, mate; this is just a bump in the road. Keep on giving bootcamps a good name.
- neom 7y agoIf you don't mind me asking, were you using a boutique lawyer or a big firm?
- austenallred 7y agoBig firm. We should have been using an education-specific boutique for this specific thing, but this started happened when we were tiny and still figuring a lot.
- neom 7y agoI can attest to having a similar issue in a startup that got large, we used one of the big firms for 100% of the work and should have been doing 10% of it with a specialized firm. It's not really startup advice you get, but it can be very costly later. Glad you got it sorted out.
- bertil 7y agoFor what it’s worth, $75k and whatever time you spend on this doesn’t seem like a massive amount. I feel like you took a risk when you had many other things to do and the risk was calculated and overall worth it — even if you got unlucky.
- austenallred 7y agoIt could be worse. I’ve never lost any sleep because of it. Regulators have the best of intentions in California so far as I can tell, so just a few hoops to jump through.
- ikeboy 7y agoIs it possible to get the fine covered by malpractice?
- jononor 7y agoAre you seeing any positive side-effects from doing the regulatory paperwork? For example from establishing management/quality processes that you did not have from before, but where actually beneficial?
- austenallred 7y agoNo, but that may not be true for all schools.
- quickthrower2 7y agoLack of competition?
- austenallred 7y agoNah, most schools are unregistered and are too small for California to care about.
- mychael 7y agoI would be an even bigger fan of Lambda if you guys fought this or left CA all together.
- davidw 7y agoI think they're in the business of teaching people, not fighting anti-government crusades.
- mychael 7y agoIt sounds like you're unfamiliar with the Higher Education Bubble and it's root causes.
- davidw 7y agoNot intimately, but this is good work: https://marginalrevolution.com/marginalrevolution/2019/05/why-are-the-prices-so-dmn-high.html https://marginalrevolution.com/marginalrevolution/2019/05/wh... Big props to the author too, who leans pretty libertarian-ish, for following the data where it leads, rather than trying to make it fit his ideas.
- deleted 7y ago[deleted]
- austenallred 7y agoNot the hill I want to die on
- stickydink 7y agoWhy?
- Radle 7y agoBut why? It's not California's fault that these guys got themselves bad legal counsel.
- merpnderp 7y ago25 lbs of paperwork to register an online school? Sounds less about protecting students and more towards protecting incumbents and cronies.
- austenallred 7y agoThe real fun ones are where we have to submit the curriculum for approval every time we make a change (considering we make small tweaks to curriculum every day - they did not plan for that use case). Good thing there are APIs for printing and mailing changes to a diff :)
- marcoperaza 7y agoI wonder if there’s a First Amendment claim there.
- pkaye 7y agoHow long does it take to get the approval back? I bet they don't even read the list of changes.
- austenallred 7y agoThe first draft they send highlighted grammar errors with a red pencil. After that I'm sure it's just stacking up somewhere. It's a waste for sure, but changing the system is a long process.
- gigatexal 7y agoCan you go after your old counsel using your new counsel for damages?
- austenallred 7y agoI don’t know. If we could it wouldn’t be a good use of time or money.
- cheez 7y agoIn the past, I've asked for a 100% refund of fees before filing a complaint with the association and have received back 50%. You may want to go that route. Literally just one fax. They want to avoid any complaints on their record, especially valid ones.
- gigatexal 7y agoOf course your choice to make but I would fight them.
- choppaface 7y agoPut the info in a shoebox and weight the statute of limitations. I've seen a start-up sue its lawyers and sadly that was the main way they generated revenue that quarter.
- anonymous5133 7y agoHow hard is it to register and what exactlty are the requirements or rules you must follow?
- bufferoverflow 7y agoSue your old counsel? They will probably settle.
- austenallred 7y agoThe thing about running a startup is you have enough problems to solve you really don't want to create new ones.
- bufferoverflow 7y agoIt's the job of your attorney. It's possible all it takes is one strongly worded letter and they will settle.
- codegeek 7y agoMay not be that simple. Attorneys understand the "send a threat letter and hopefully they will settle" model well. Also, their current attorney will probably charge just to send that letter.
- Alupis 7y ago> Also, their current attorney will probably charge just to send that letter. Surely not $75,000 for a letter. A few hundred, yes. Recouping even $5,000 (in a "f u, go away please" payment) would be a big win for a scrappy startup, no? Their old law firm probably would prefer not to be drug around town making it known they gave very wrong, and very costly advice. They'd prefer the matter just went away. Those conditions are ripe for a quick settlement.
- deleted 7y ago[deleted]
- pnw_hazor 7y agoGiving advice that turned out to be wrong is a long way from proving legal malpractice.
- trazire 7y agoAre you going/have you registered with the State of California now?
- austenallred 7y agoYup, we've submitted our registration.
- noodlesUK 7y agoI’d love to see some lightweight analysis of the different regulatory burdens you’ve dealt with in each of the states you’ve registered in. How many places have you had to liaise with? How deep does it go? Just state level, or do you have to interact with Educational Service Districts etc?
- austenallred 7y agoI'll comment after we're done with it, don't want to complicate it while we're still in the middle of it.
- jcims 7y agoI think it would be interesting to know how much you feel this process has influenced the actual curriculum and delivery methods. The last thing we need right now is a regulatory approval process creating some kind of pedagogical monoculture that doesn't allow us to explore new ways of educating folks young and old. There are certainly risks involved with deviating from the norm, but there are undoubtedly rewards waiting to be uncovered as well. I think the main thing regulation should do is help manage how much risk the students are exposed to. They can filter out low effort scams while allowing experimental programs that can rationalize their approach a wide latitude to innovate and even fail. Based on my cursory assessment of Lambda's model, they would likely survive this type of scrutiny.
- austenallred 7y agoNot at all. We have to take what we're currently doing and try to retrofit it to what regulators are expecting. I don’t think (for us) this process have improved the school at all.
- jcims 7y agoRetrofit in reporting or delivery? That’s precisely the effect I’m interested in. Even if it doesn’t impact what you deliver to students there is still a chilling effect and possible blockers to developing novel approaches. The juice may still be worth the squeeze for larger/funded ventures. Your efforts to translate what you do to what regulators want to see is probably worth it. However, smaller outfits might be inclined to avoid that work by following the regulatory ruts and deliver exactly what they are looking for to avoid these costs/complexities/risks.
- madenine 7y agoGlad to hear you're working through it. At Metis, state and federal regulation (we're accredited) is a big burden - but something I as an instructor feel is in the best interest of my students.
- nickpinkston 7y agoThanks for your continued transparency dude.
- cgag 7y agoYeah, I also wouldn't want my kids to grow up in a world where someone could exchange knowledge for money without a license, but this is ridiculous.
- tolmasky 7y agoI do mean this completely naively, as I was not even aware that "exchanging knowledge for money" required a license before this, but why do you feel this way? I'm so shocked that this isn't simply about certification (aka, you can't give out some sort of officially accepted slip of paper without a license, which I would at least be able to come up with arguments for), that I am really curious as to how this is an issue. In particular: 1. It seems you can exchange knowledge for money as long as you don't have a physical presence in the state. Do you think this is an unfortunate loophole that in an ideal world would be "fixed"? If I create a new framework or technology and live in Bolivia, do you believe that ideally before I can offer a course on it online that accepts payments I should first be licensed in the state of the person taking the course? Should random people who happen to live in the state have a leg up on me teaching the technology I invented simply since they live there already and it is probably easier/in-their-means to get registered? 2. It doesn't seem to have anything in particular to do with "bad knowledge", as there are plenty of people willing to teach bad things for free (you can define bad however you want here). And separately, as far as I can tell, no one is really checking the courses are good or anything. Using the example above, would California have the capability to know that my React course is up to snuff? So what is the registration for? Why is the sale of knowledge different than the sale of t-shirts? 1. Is the only goal to have these places on file for easier class-action lawsuits later? That might make sense? 2. Is it because tuition is particularly expensive, so it is known to attract more scams? So, merely a consequential result and not anything inherent to knowledge itself. 3. Is it because this sort of "institution" qualifies for government assisted funding/scholarships? In that case I could certainly understand it. Any of those reasons could make sense, but none lead me to the feeling that the sale of knowledge, of all things, should of course necessarily be licensed/registered outside any other variables.
- cgag 7y agoSorry, I was being sarcastic and I think we're in agreement. I think it's pretty sad that the OP suggested it should be regulated (but I also suspect they only said that because they run a business and can't really say anything political). It's clear from the replies however that many people agree with what he said though.
- kaushikt 7y agoLambda School is preparing to enter India as well right? How is it regulated there? better or worse?
- GordonS 7y agoGiven all the dodgy looking "English School" signs and graffiti I've seen in several Indian cities, I'd guess there's a lot less regulation. That might of course differ for a large foreign company, so I would still be interested in hearing from the OP on this :)
- TheCoelacanth 7y agoNot necessarily less regulation, but less enforcement for sure.
- martindale 7y agoWhat about your experience suggests that regulation is reasonable?
- acjohnson55 7y agoSo much for "states-as-laboratories" [1]. There may be some usefulness in that concept, but without eventually harmonization of best practices, it can also be incredibly wasteful and create harmful barriers to entry. [1] https://scholar.valpo.edu/cgi/viewcontent.cgi?article=1888&context=vulr https://scholar.valpo.edu/cgi/viewcontent.cgi?article=1888&c...
- 1123581321 7y agoThis is actually a good case for the concept as some states will improve their processes to better work with educators like Lambda and the learnings will spread to many of the other states over time. The only way for their to have been a unified process for paperwork, previously, would have been to require too much and to implement a process to prevent states from proactively updating their process quickly enough to be helpful.
- tvanantwerp 7y agoThere's really not much pressure for states to adopt best practices. I work at a tax policy think tank, and a lot of the most populous and richest states also have some of the most poorly constructed tax code (e.g., CA's Prop 13). They can get away with it because people want to live and work there regardless. The network effects of established urban areas--especially with specialized industries like Silicon Valley has--are difficult to overcome.
- 1123581321 7y agoI certainly don’t dispute your assessment there, as an IL resident. In quieter areas where regulators have more ability to make changes without making newspaper headlines, and a larger portion of a department’s scope can be covered at a specialized conference, don’t better practices spread a little more quickly?
- mehrdadn 7y agoOut of curiosity, which state had the 25-pound registration? EDIT: Whoops sorry, didn't realize my comment was submitted twice.
- austenallred 7y agoShouldn't talk about it yet.
- mehrdadn 7y agoOut of curiosity, which state had the 25-pound registration? And what was the average and minimum you saw?
- austenallred 7y agoDon't want to talk about those things just yet.
- jammygit 7y agoWhat do you actually do to find out what the regulations for 50 states are and how to comply? Just hire experts?
- austenallred 7y agoYup. Seems crazy but a lot of people make their living that way.
- tvanantwerp 7y agoI work for a DC-based non-profit. As we solicit donations in all 50 states, we have to register in all 50 states and meet their varied paperwork requirements. A small industry has sprung up around non-profit state registrations, and we are happy to outsource to it; we'd never manage it otherwise.
- wrycoder 7y agoRegistrations are one thing, and there are indeed many organizations more than happy to take your money to do a quick registration. But how are you going to handle the yearly (or more often) tax filings in all these jurisdictions going forward?
- conroy 7y ago> This all happened a long time ago. The citation date is March 20th of this year, which is only four months ago. When will Lambda School be fully registered with California?
- austenallred 7y agoAs soon as the BPPE reviews and accepts the application.