Legal Advice for Freelancers and Startup

Once I had a wedding intern (who was also a law student) to create a legal document. I was doing my best to keep it concise and she was trying her best to protect me with legal English. It was stupid.

A legal document might be an important marketing tool in certain business scenarios or if you’re a law firm where the presence of a dense block of text makes you look more official. If that’s the case, you might want to buy that or do a google search because stealing legal documents is always a fine thing to do. 

Generally, the goal is not to get sued (or sue others), not to have a legal document in case you get sued. You can write a legal document that will help you not get sued. There are two important points.

One, write it in really clear English so you both know what you actually agreed on. Process, timeline, deadlines, payment terms, additional fees and so on. That dramatically decreases the chances of you getting sued. 

Most of the time people sue because they are hurt and angry, not because they think they can make money. If they know what they signed, they’re way less likely to feel hurt and angry because they know what they signed. 

Two, which I learnt from Seth Godin, put a clause in that says, “Any disagreements will be resolved through binding, informal arbitration. You pick a lawyer. I pick a lawyer. The two lawyers pick a third lawyer. Submit up to five pages of material to state the case. That lawyer spends three hours looking at memos and decide who’s right. Everyone will abide by her decision.” End of discussion.

Both sides can’t outspend each other because the whole thing is only going to cost $1,500, 3 hours of a lawyer’s time. This way no one can bully their way into victory and the whole thing gets done in 3 hours. The best thing is you’ll almost never need it as you both will try to find a way to agree with each other because it’s not worth a crapshoot. 

In the case of getting paid, using a legal document to threaten someone is never a good idea. You end up paying more in legal fees. The way to do it is to get a deposit upfront, and then the rest of it before you submit the work. Get paid when you have maximum leverage. Of course, you can trust them to pay on-time later, but that’s on you. 

As the business goes forward and get bigger, what you want is a lawyer who works with you in the following way: 

You write down what you want an agreement to do. You do all the hard work of figuring out what you want. And then go to the lawyer and say, “All I’m paying you to do is make an agreement that does this. I’m not asking for advice about how I should win. I’m just asking you to make the agreement do this”.

It’s going to be a long time before you need what Airbnb has. Airbnb has millions of users that they have to worry about edge cases. You don’t have to worry about edge cases because you should be busy building your business, and when your business is big enough to afford a lawyer, you’ll know what to do. 

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