There’s an old saying that business owners refuse to work a 40-hour-per-week job for someone else, so instead they work 80+ hours for themselves. We see this play out time and time again with many tech entrepreneurs.
Tech entrepreneurs are by nature problem solvers and take great pride in being able to solve challenges themselves. They are generally quite willing to share information freely with others in an attempt to build the tech community as a whole. Combining these traits results in a desire to scour troves of free information in pursuit of solving a problem (often times at all hours of the day/night), irrespective of the risk associated with the problem.
We see far too many new or prospective clients send us the “template” agreement they have been using since forming their company, only to learn it does not apply in the manner they think it applies or, worse yet, does not say what they think it says. Often times, these self-made templates are missing vast areas of important information, such as a license grant in a software agreement, or third-party disclosures in a privacy policy.
Preparing a set of contract template for a tech company may not be nearly as costly as the owner thought it would be, especially in light of the risk to the business in the event the company needs to enforce the agreement. This seems to be the primary reason early tech entrepreneurs go at it alone: fear of spending too much capital on anything but product development or marketing.
Although not a scientific analysis, the tendency to prepare documents themselves favors entrepreneurs who bootstrapped their companies, rather than those who had seed or angel funding. Once a bootstrapped company reaches a level of runway in its owners’ minds, they tend to be more willing to seek assistance from legal professionals.
The risk in preparing legal documents yourself is not worth the reward of saving a few dollars in the company’s early stages. There are occasions in which companies are too new, and their business models/product development is still evolving, and we recommend they wait to have any documents prepared (e.g., EULA, terms of services, privacy policy, etc.). That is part of having a trusted relationship with a third-party professional who genuinely takes into account their clients’ needs and best interests.
Whitehouse & Cooper’s attorneys strive to be that trusted professional. We continue to offer free initial consultations because they are equally as valuable to us as we hope they are to our clients. We know the type of companies we enjoy working with, as their passion for their product/service comes through loud and clear in even a shortest of conversations.
Before spending hours of your time misdirected from your product or service, have a conversation to find out what the cost really would be to have legal services performed by a professional. It might not be nearly as costly as you imagined, and you might appreciate the extra hours in the day to devote to expanding your business.
