What do you call 300 lawyers at the bottom of the ocean?
We have all heard the jokes about how lawyers are the scum of the earth, tearing apart the very moral fiber of a civilized society. Unfortunately this idea has permeated the minds of entrepreneurs so much so that it ends up costing them more in the long run. The idea that someone has to be protected if not represented legally on any and all business deals, documents even intellectual property is a concept not easily grasped by most, and even less so by the current Web 2.0 generation. The effect of this voracious use of the web whether for business or social networking, is that we are in a constant state of information sharing. While there are amazing advantages to this ability to communicate in real time, when it comes to privileged information, information that is sensitive in nature and may be at the very foundation of a business new entrepreneurs are spreading the news so to speak without taking the steps necessary to make sure that they are legally protected.
Why is this happening , and what are the consequences?
Let’s face it, everyone is struggling right now. I am writing this article while contemplating whether I actually am in dire need of the second iced latte or whether that $5 dollars would better serve me in the form of a martini later (definitely the martini). This thought process speaks to the very nature of the problem, money. The idea that startups actually spend money no matter how diminutive on a document as simple as a non-compete/non-disclosure agreement is incomprehensible. People think, “Why do I need to spend money on legal when I’m just showing friends and family?” Or, “I don’t have much to spend, I want every penny to go towards the idea or the product fabrication itself.” This, my friends, is the fundamental difference between an entrepreneur and a savvy businessperson.
So take this as my first tip of many more to come: If you have a unique concept, a developing idea, the next big thing, protect it. Spend a few hundred dollars to make sure that people you reach out to whether for funding or just for advice can’t turn around and rip you off. It happens more then you know.
May 6th, 2009 at 5:19 pm
Why is this happening? Many reasons…
Lack of money in 99% of startup situations, general impulse toward openness on the part of most young people running these companies, the “it won’t happen to me” attitude most of us naturally carry and a dozen others…
Then again, you have to weigh the options… Sure I can spend a few hundred dollars to have a lawyer put together my T&C’s – but why not just “borrow” a copy from my competitor’s site, put that money toward branding, seo, etc. and assume I’m protected by the DMCA & the infamous “they won’t come after me until my company is worth something”
As far as an NDA – is there really THAT much difference between something I get off docstoc and what a lawyer would give me? Most people who are really in position to steal your idea won’t agree to sign one anyway…