Ask HN: What type of lawyer can review consultant agreements?
I have an opportunity to take on my first ever contract as a consultant, building software for an existing small SaaS company. What type of law or lawyer should I google for in order to have them review the legal documents I'm being asked to sign around non-disclosure and etc to make sure I'm not signing anything which could hurt my own IP in the future? This is all in California by the way.
My favorite way to handle these types of situations is to contact any lawyer you trust and ask them to recommend someone. They will not only know the correct discipline for your particular scenario, but being in the industry, they’re a better judge of quality than just picking someone randomly out of a search engine.
The first time I needed a lawyer to review business paperwork, I called a local personal injury lawyer who I knew had a good reputation, and they gave me a reference to someone who barely had any marketing presence at all, but was an excellent lawyer. 10/10 would do again.
Seems like a personal web of trust, but what happens when I don't know any lawyers at all?
Full story: I am close to a contract dispute with my landlady (she refuses to keep the heat at the legal minimum level because it would be too expensive for her, and threatened to evict us when I mentioned the law) and anticipate needing legal help soon.
You don’t really have to know any lawyers. You can find a lawyer who has a good reputation easily. They are always up for a chat and know the lawyer that’s would be useful for your situation. There’s a good amount of networking and referrals going on in the legal profession and is perfectly normal to just ask for help.
It’s like if your stomach hurt you might call a gastroenterologist but then he says sounds like something a dietician can help with and tells you someone they recommend. Same thing happens in the legal world.
Not sure what country you're in.. but in the US, most medium sized cities have "legal aid clinics" who can either help you directly or refer you to a local attorney specializing in your matter. The state bar association can do the same but they're more of a generic directory than a referral.
Yes, the state bar will generally refer you to a lawyer in good standing who is familiar with the practice area and is willing to do a 30 min to hour consultation for a flat rate.
Lots of industries have connections to lawyers. I have a personal friend who is a realtor, for instance, and knows lawyers who do title work -- very unlikely they could help you, title work is super specific, but they'd be a good place to ask.
Startup lawyer here (but not your lawyer). This is good advice (ask a lawyer you trust for a referral in the right legal specialty).
More particularly for this question, while the state bar can be okay for referrals, you probably want someone who has worked in labor & employment law, or someone familiar with equity agreements if equity/stock is a meaningful component of the comp (look for a "startup lawyer" or "emerging companies lawyer"). Both of those will be familiar enough with the IP issues and general contract provisions. You'd probably only want an IP specialist if you're specifically licensing prior inventions (or you have IP-heavy side projects that you want to exclude).
Good luck!
Totally agreed here, although it's a bit scary that this is the state of the art solution.
Oh there's lots of solutions to this problem. But this is the most honest.
I've signed dozens of consultant agreements, and I've never run them by a lawyer.
Just read it. I've never seen one that wasn't intelligible to a normal human. If there's anything you object to, raise the issue. Don't be afraid to push back. Nobody's trying to trick the other party; you're just trying to find a set of terms that everyone can agree on.
I'm also in California, so noncompete rules aren't valid. That said, I recall seeing one once in a contract, and I just lined it out.
Other things to watch out for:
* Indemnification clauses. I just say up front: I can't possibly hope to defend you against patent trolls, I can't indemnify you.
* IP allocation. Most contract work is "work for hire", which is fine - they're paying for it, they own it. But there are other situations; maybe you are incorporating some software you've already developed; maybe you're getting paid to add something to an opensource project; etc. Just make sure the contract acknowledges this situation. They're writing the contract, they can figure out the wording.
* Payment terms. If you're billing once a month, and your terms are net-30, you're getting paid two months behind and it really hurts when the company collapses and you get stiffed for your last bill. It happens. Be careful with terms, especially with smaller clients.
For the most part, you can trust the simple english understanding of the words in a consulting contract. They usually aren't long. Just read them.
I’m a lawyer, and think this is great advice. I would add two caveats:
1. Some people are out to trick you. A contract won’t save you from them, but having a lawyer review it beforehand and identify it as an egregious one might be a useful signal that it’s someone you don’t want to work with. In other cases, circumstances in the business relationship will change, and your counterparty may try to extract maximum value from your agreement. In these cases, a tightly drafted contract can help, but in general may not be worth the ex ante expense of hiring a lawyer to look at every agreement.
2. The words on the page matter. Make sure you read them them and understand them. It may be worth having a lawyer on your first couple agreements to talk through the terms of art.
I know for a lot of companies it won't work, but I would actually try to change it to tie payment and development iterations together. The shorter they are, the better. And if possible get them to agree that the next iteration doesn't start until the payment for the previous one arrives. And that there are no checks, only digital payment.
Worth trying.
One way around the billing issues is to act like an attorney, and go with a retainer.
Disclosure: I've worked with stickfigure and we've both been on a job where we got stiffed because we didn't use the retainer model. Lesson learned. ;-)
As a solo consultant it will make sense for you to learn how to do this yourself, at least for small to mid-sized clients. There are a lot of hidden semantics and terms of art in contracts that you will need a lawyer to teach you, because the legal meaning literally cannot be devined in a plain reading. So I would advise overspending the first time to get a few hours of conversation and Q&A, and think of it as amortized later.
A contract lawyer. Call the California State Bar and ask for a referral, they'll give you a list of lawyers in your area that handle this sort of thing. Call at least three of them to inquire about their rates. If your business grows you'll need more legal services in future, so be choosy.
When I needed a US contract reviewing I found someone via Priori and was happy with the service I got. Could be worth a look if you don’t have any personal recommendations. I’d be happy to share the details of the person I used if you like but it was just a fairly simple one off contract review so don’t take it as a proper recommendation!
I would tend to recommend the Bar Association over Google.
https://www.calbar.ca.gov/Public/Need-Legal-Help/Using-a-Cer...
More generally, the type is just "your lawyer."
Most lawyers mostly handle contracts. You probably don't want a trial lawyer or a criminal lawyer or a tax lawyer and likely won't come across an in-house council.
As an aside, [1] if it comes to the point where the fine legal points of the contract are in contention your business relationship has gone bad (or it was bad from the start (there are clients like that)).
What I mean is that the way NDA's between consultants and contractors are really supposed to work is that the consultant is working on the next project for the client (and the next project after that and so on) because that's how the consultant makes their money.
If you are prioritizing your own "future IP" you're shooting your client relationship in the foot. I mean who wants to work with a difficult consultant?
Your lawyer should tell you what you are in for by signing, but unless the terms are onerous, any kind of heavy NDA back and forth is a reveal of lack of experience. Onerous terms are a reveal of a bad client -- new consultants tend to experience more of them because experienced consultants work to acquire and maintain good clients.
Finally, the terms of the NDA and other aspects of the contract should be reflected in your fee. Your business is to charge for the value the client expects. That value may often include saving the client money. But it does not include saving the client money on your fee.
Good luck.
[1]: well that got longer than I expected.
I asked around for people who knew a good lawyer and went with the one my accountant recommended. He taught me how to read the clauses and what they meant. After a while, I got a good feel for what was fair and what wasn't and review my own contracts these days. On a related note, my accountant was helpful by letting me know that my initial rates were too low.
I wouldn't be worried unless they explicitly try to own intellectual rights to stuff you make outside your work. They are just trying to cover their asses with as many clauses as possible but really, only time I'd see them being enforced if you jump right into a competitor and/or create your own competing product.
True, most of these are pretty readable by a lay person, but there may be clauses and phrases in there with distinct legal meaning (e.g. "work for hire") that you might miss if you just review it yourself.
Though I'm not saying you need a lawyer. I've signed plenty of these agreements and never hired a lawyer. Just know you're taking a risk in doing so.
Can I take a somewhat contrarian viewpoint here? Walk in to your local SBA office or even Chamber of Commerce office, and see if there is any kind of free or reduced cost legal assistance available. If this is your first contract, chances are that you don't have a ton of money to throw around on lawyers, but also that whatever contract needs to be put in place won't be anything more than boilerplate contract language. In reality - anyone who has ever come before you as a contractor or small business owner has likely seen hundreds of these. The main reason for you to make contact with a lawyer isn't about this contract, so much as it is down the road if you continue to grow your business, chances are you will need to have that relationship.
This is contract law. Most general or transactional (aka business or corporate) law firms -- as opposed to criminal or family law -- will handle this sort of thing. Contracts are the bread and butter of lawyers. It's what they live for.
I would suggest a solo or small law firm as your business will be more important to them. And attention to the agreements you have questions about is actually what you're looking for. Larger firms will probably just hand you off to a paralegal with a quick review by an actual lawyer. And then charge you way more.
Others have provided recommendations of how to find a lawyer.
I would also advise you read up more on basic contract agreements.
When I started I found Nolo's book on "Consultant & Independent Contractor Agreements" very useful. Archive.org has 5 copies at https://archive.org/search.php?query=nolo+Consultant+Agreeme... .
I do this. Reach out to me at the email in the profile. My normal rate is $495 an hour, and I wouldn’t expect this to take more than an hour or two.
$495 an hour for this is insane
I take it you've never hired legal counsel before
I have, but personally I prefer to pay something in the ballpark of market rate.
IANAL but I've been a legal assistant for 22 years.
I would find a labor & employment attorney, with the caveat that you want one that traditionally does work for tech labor and not tech employers.
With most legal specialties, you'll find that attorneys often gain experience defending one 'side' of the argument.
Try asking questions to ChatGPT: https://chat.openai.com
Before spending money on a lawyer, check what happens in your state in breach of contract suits for the amount of money you expect to get sued for (or have to sue for) should the relationship fall apart. In some states (maybe most) suits that would arise from a contractor agreement will go to mediation/arbitration automatically. When that happens the mediator will likely pay more attention to the original intent and who did what, or didn't do what, rather than specific details of the contract.
Many, often most, terms of the kinds of boilerplate contracts you get in consulting/freelancing are covered by law anyway. As long as you have spelled out the expectations you can assume the fine print is just repeating what the law says already. And contracts cannot void or override state or federal law.
You need to clearly describe:
- What you promise to deliver, the more detailed and specific the better.
- How much and how often the customer will pay you.
- Start/end dates for the contract.
- Who owns the finished work product (generally defaults to the customer but best to spell that out).
If at all possible contract, charge, and get paid for specific deliverables as opposed to a fixed fee for a vague statement of work, or hourly for whatever the customer asks/expects you to do. It's much easier to enforce a contract that says "Set up staging and production instances for web server in AWS or GCP, with specs X, Y, and Z, by DATE" than one that says "Set up hosting environment." As the project proceeds you should agree on the deliverables with the customer, and how much those are worth, not the time you think it will take. You should avoid putting yourself in a position where the customer can owe you a lot of money, or you could get sued for a lot of money. Fixed-fee projects for thousands or tens of thousands of dollars with vague specs and requirements just lead to trouble, because you and the customer probably have very different expectations and interpretations.
No one knows how to write complete and unambiguous specs that everyone interprets the same way. No one knows how to estimate software development or plan for the unknown unknowns that inevitably arise. We can call it engineering but really it's a lot of guesswork, and your customer will proceed from a different set of assumptions than you have.
If you do get sued, or you have to sue, you will almost certainly spend more money on lawyers and lose money on non-billable time than you can hope to recover. Don't count on a contract to give you a slam dunk. Even if you "win" in mediation or court you just get a judgment, not a bag of cash, and collecting on a judgment turns into another problem to waste your time. The legal process moves slowly, costs a lot of money, imposes stress, and reduces your billable time. Mediators will probably not understand anything technical and they want to get the case over with, so they tend to split the difference, pocketing a fee and ordering payments to attorneys.
IME, it seems that most of the lawyers with experience in this area primarily work for the companies that hire consultants, rather than consultants themselves. And their skillset is focused on drafting contract language that favors the customer rather than the vendor.
That's not to say that they couldn't apply that same skillset to drafting contracts that protect the interests of the consultant. It's just an observation.
Keywords: Contracts/Licensing/IP lawyer, California. Google it.