4 ms·

>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 a

by jnbiche 13y ago

>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.

ganeumann 13y ago
With lawyers, if everything goes perfectly then they just did their job. If anything goes wrong they're entirely blamed for it. Since they are paid by the hour, there is an explicit incentive to spend as much time as possible to make sure everything goes perfectly. Typical agency problem. It's up to the client to tell the lawyers when they are done. Now, the very very best lawyers, the ones who have a waiting list of clients, would prefer to spend less time on each contract. They want it done right and done fast so they can move on to the next thing. They fall outside this dynamic. But in any given field of corporate law there are only a handful of these. If you are at a startup, you are not using these lawyers (and don't need to). You need to be able to recognize the point at which your lawyer's comments pass the reasonable risk/reward tradeoff and ask them to put their pencils down and stop work.
- throwaway1979 13y ago
  Part of the situation is that the output of a lawyer cannot be measured clearly. The same is true for programmers but more people seem to be okay with shoddy code than with shoddy contracts. If the consequences of bad code were equally drastic as those of shoddy contracts, I'd imagine a lot more time being spent on code quality.
  - tesseractive 13y ago
    Actually, where the consequences of bad code are known to be drastic, a lot more time is spent on code quality. I worked on factory software at AMD for a while in the late 90s and early 2000s. The adage around there was that if the fab was down, it cost us a million dollars an hour. So we had a ton of testing, red tape, bureaucracy, and so on as part of change management. We did major upgrades and such on the 4th of July or during Christmas week, because those were the only times when the fab was down for more than an hour at a time (the hour was once a week at the weekly shift meeting for fab workers, IIRC). In preparation for those upgrades, we had a system set up as a duplicate of the (very expensive) production hardware and we actually rounded up the whole team and did dress rehearsals of the upgrade process, with go/no-go decision times built into the schedule based on timing how long it would take us to roll back the whole massive database from backup in time to ensure there would be no unscheduled downtime. We also had some folks who had come to the company from Lockheed. They helped upgrade our procedures, because as you might imagine, defense contractors are even more hardcore about all this than factory control systems. If you make a mistake in the embedded code inside a missile or airplane, things blow up (the wrong things!) and people die. This is more or less the opposite of a typical startup, where velocity is normally far more important than creating sufficient failsafes against any possible error.
- danielweber 13y ago
  If you don't tell your lawyers what you want, they will try to remove every problem. Tell your lawyers you want decent terms, and you don't want to spend forever working on contracts, and have them explain the risks you face from the contract the other party proposed. Failing to engage with lawyers and then not liking their results is like managers who fail to engage with software developers and then don't like the results. You need to tell them what you want.
  - jankymess 13y ago
    as technical folks, i don't think we fully understand the different types of lawyers there are. you know that eye twitch you develop, when someone asks if you can fix their computer because you "work with computers"? it's similar for lawyers. in my first two businesses, i didn't do enough [serious] transactions to need lawyers. in my third business, i reviewed and wrote our initial contracts, which were eventually reviewed by other lawyers, but that took a ginormous amount of my time and sanity. (for fellow people who suffer from impostor syndrome -- can you imagine walking into every meeting with a client and thinking "is this day i'm revealed as an incompetent contract writer?") for the next set of contracts, i decided i needed a lawyer and got a recommendation from a friend of a friend. this lawyer turned out to specialize in immigration, not business; but assured me that they could get it done. inevitably, in my first deal involving them, i landed in the back-and-forth lawyering described in pud's article (and so many comments here). i really needed the revenue in the company bank account sooner rather than later, so after 4 weeks, i gave in, and signed the contract, but 3 months later got burned. this cost me time, money (both from the customer, AND the law firm), and many nights of sleep. then i had the fortune of becoming friends with a lawyer that specializes in contract litigation. i begged him to draft my contracts, and he refused. he then explained his specialization was in tearing contracts apart, finding points of leverage for his client, and to a lesser extent, being involved in settlement negotiation (but not leading it). to you and i, this sounds like the perfect person to draft a contract. to him, it's an unneeded source of liability that can increase his malpractice insurance rates. he did however, take a look at my originally-blessed contract and tell me to make a few changes, especially rip out the arbitration clauses in my contracts, because arbitration is hella expensive (it really is). so today, i have a business contracts lawyer, an employment lawyer, and when needed, a lawyer experienced in business contract litigation. and for those of you wondering about the cost, it's not that expensive. i do a quick review of contracts i receive and clearly explain any industry-specific terms and practices to my lawyers, and have them do the final signoff. i don't do retainers, in fact, my business and employment lawyers refused a retainer agreement. due to the new custodial laws on how lawyers must account for client money (after a few high-profile cases of attorney-client theft), they don't feel it's worth it for the limited amount of business i do. pay as you go.
btilly 13y ago
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 13y ago
  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.
  - btilly 13y ago
    Absolutely. Doubly so because the lawyer is liable if their legal advice turned out to be bad, but the lawyer does not fully share in the upside if the negotiation goes perfectly.
  - comrade_ogilvy 13y ago
    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.)
jakejake 13y ago
I've worked with several lawyers and had different experiences. One of them basically just negotiated his own payment into contracts. He negotiated an extra $8,000 on a contract. His bill was $8,000. What a coincidence! Another lawyer I had was so busy she just wanted to get in and get done (this was a more boilerplate contract as well). Her total was like $200 which was ridiculously cheap. But I don't think she did much other than make sure all the pages where there. I'm sure most lawyers want to reach an appropriate balance. But that may not necessarily be appropriate amount of risk for you. It may be the appropriate amount of billable hours for them.
DannyBee 13y ago
"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. " Depends entirely on the corporate culture. Where I work, this would be very wrong. As for private lawyers, i think you have it very backwards in practice. Corporate lawyers, in a culture where lawyers are doing what they should be (assessing risks and informing clients about them, in priority order and explaining tradeoffs and possible workarounds), are risk takers. They don't make business decisions, they essentially try to solve legal problems creatively. In these cultures, ineffective lawyers who don't understand what matters get fired. Corporate lawyers, in a culture where lawyers have say over products or business decisions, go very badly, for the reasons you mentioned. It is seriously inept management that puts lawyers in a go/no-go position over business decisions (not "this is illegal we will get arrested decisions"), and even more inept when they don't hold them accountable for whatever time they waste. Most private lawyers are not held accountable for wasting everyone's time. They are still paid. They still get used. People just suck it up. So they actually are almost exactly like what you have described to the corporate lawyers. Very good private lawyers are more like the corporate lawyers in a good culture.

by jnbiche 13y ago

ganeumann 13y ago

With lawyers, if everything goes perfectly then they just did their job. If anything goes wrong they're entirely blamed for it. Since they are paid by the hour, there is an explicit incentive to spend as much time as possible to make sure everything goes perfectly. Typical agency problem. It's up to the client to tell the lawyers when they are done. Now, the very very best lawyers, the ones who have a waiting list of clients, would prefer to spend less time on each contract. They want it done right and done fast so they can move on to the next thing. They fall outside this dynamic. But in any given field of corporate law there are only a handful of these. If you are at a startup, you are not using these lawyers (and don't need to). You need to be able to recognize the point at which your lawyer's comments pass the reasonable risk/reward tradeoff and ask them to put their pencils down and stop work.

throwaway1979 13y ago
Part of the situation is that the output of a lawyer cannot be measured clearly. The same is true for programmers but more people seem to be okay with shoddy code than with shoddy contracts. If the consequences of bad code were equally drastic as those of shoddy contracts, I'd imagine a lot more time being spent on code quality.
- tesseractive 13y ago
  Actually, where the consequences of bad code are known to be drastic, a lot more time is spent on code quality. I worked on factory software at AMD for a while in the late 90s and early 2000s. The adage around there was that if the fab was down, it cost us a million dollars an hour. So we had a ton of testing, red tape, bureaucracy, and so on as part of change management. We did major upgrades and such on the 4th of July or during Christmas week, because those were the only times when the fab was down for more than an hour at a time (the hour was once a week at the weekly shift meeting for fab workers, IIRC). In preparation for those upgrades, we had a system set up as a duplicate of the (very expensive) production hardware and we actually rounded up the whole team and did dress rehearsals of the upgrade process, with go/no-go decision times built into the schedule based on timing how long it would take us to roll back the whole massive database from backup in time to ensure there would be no unscheduled downtime. We also had some folks who had come to the company from Lockheed. They helped upgrade our procedures, because as you might imagine, defense contractors are even more hardcore about all this than factory control systems. If you make a mistake in the embedded code inside a missile or airplane, things blow up (the wrong things!) and people die. This is more or less the opposite of a typical startup, where velocity is normally far more important than creating sufficient failsafes against any possible error.
danielweber 13y ago
If you don't tell your lawyers what you want, they will try to remove every problem. Tell your lawyers you want decent terms, and you don't want to spend forever working on contracts, and have them explain the risks you face from the contract the other party proposed. Failing to engage with lawyers and then not liking their results is like managers who fail to engage with software developers and then don't like the results. You need to tell them what you want.
- jankymess 13y ago
  as technical folks, i don't think we fully understand the different types of lawyers there are. you know that eye twitch you develop, when someone asks if you can fix their computer because you "work with computers"? it's similar for lawyers. in my first two businesses, i didn't do enough [serious] transactions to need lawyers. in my third business, i reviewed and wrote our initial contracts, which were eventually reviewed by other lawyers, but that took a ginormous amount of my time and sanity. (for fellow people who suffer from impostor syndrome -- can you imagine walking into every meeting with a client and thinking "is this day i'm revealed as an incompetent contract writer?") for the next set of contracts, i decided i needed a lawyer and got a recommendation from a friend of a friend. this lawyer turned out to specialize in immigration, not business; but assured me that they could get it done. inevitably, in my first deal involving them, i landed in the back-and-forth lawyering described in pud's article (and so many comments here). i really needed the revenue in the company bank account sooner rather than later, so after 4 weeks, i gave in, and signed the contract, but 3 months later got burned. this cost me time, money (both from the customer, AND the law firm), and many nights of sleep. then i had the fortune of becoming friends with a lawyer that specializes in contract litigation. i begged him to draft my contracts, and he refused. he then explained his specialization was in tearing contracts apart, finding points of leverage for his client, and to a lesser extent, being involved in settlement negotiation (but not leading it). to you and i, this sounds like the perfect person to draft a contract. to him, it's an unneeded source of liability that can increase his malpractice insurance rates. he did however, take a look at my originally-blessed contract and tell me to make a few changes, especially rip out the arbitration clauses in my contracts, because arbitration is hella expensive (it really is). so today, i have a business contracts lawyer, an employment lawyer, and when needed, a lawyer experienced in business contract litigation. and for those of you wondering about the cost, it's not that expensive. i do a quick review of contracts i receive and clearly explain any industry-specific terms and practices to my lawyers, and have them do the final signoff. i don't do retainers, in fact, my business and employment lawyers refused a retainer agreement. due to the new custodial laws on how lawyers must account for client money (after a few high-profile cases of attorney-client theft), they don't feel it's worth it for the limited amount of business i do. pay as you go.

btilly 13y ago

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 13y ago
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.
- btilly 13y ago
  Absolutely. Doubly so because the lawyer is liable if their legal advice turned out to be bad, but the lawyer does not fully share in the upside if the negotiation goes perfectly.
- comrade_ogilvy 13y ago
  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.)

jakejake 13y ago

I've worked with several lawyers and had different experiences. One of them basically just negotiated his own payment into contracts. He negotiated an extra $8,000 on a contract. His bill was $8,000. What a coincidence! Another lawyer I had was so busy she just wanted to get in and get done (this was a more boilerplate contract as well). Her total was like $200 which was ridiculously cheap. But I don't think she did much other than make sure all the pages where there. I'm sure most lawyers want to reach an appropriate balance. But that may not necessarily be appropriate amount of risk for you. It may be the appropriate amount of billable hours for them.

DannyBee 13y ago

"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. " Depends entirely on the corporate culture. Where I work, this would be very wrong. As for private lawyers, i think you have it very backwards in practice. Corporate lawyers, in a culture where lawyers are doing what they should be (assessing risks and informing clients about them, in priority order and explaining tradeoffs and possible workarounds), are risk takers. They don't make business decisions, they essentially try to solve legal problems creatively. In these cultures, ineffective lawyers who don't understand what matters get fired. Corporate lawyers, in a culture where lawyers have say over products or business decisions, go very badly, for the reasons you mentioned. It is seriously inept management that puts lawyers in a go/no-go position over business decisions (not "this is illegal we will get arrested decisions"), and even more inept when they don't hold them accountable for whatever time they waste. Most private lawyers are not held accountable for wasting everyone's time. They are still paid. They still get used. People just suck it up. So they actually are almost exactly like what you have described to the corporate lawyers. Very good private lawyers are more like the corporate lawyers in a good culture.