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The Top Ten (Sixteen) Lies of Lawyers

Written by: Guy Kawasaki

Article Overview: Like CEOs, marketers, engineers, entrepreneurs, and venture capitalists, lawyers tell their own specialized tales. Most of my experience is with lawyers who do work for tech entrepreneurs, so this is my focus.

The Top Ten (Sixteen) Lies of Lawyers

Like CEOs, marketers, engineers, entrepreneurs, and venture capitalists, lawyers tell their own specialized tales. Most of my experience is with lawyers who do work for tech entrepreneurs, so this is my focus.

“I’m really excited about what you are doing and will give your company my personal attention.” Once someone gets to the partner level, making it “rain” is as important as doing “work.” This is part of a standard sales pitch, so don’t let it go to your head.

“Our firm is really excited about what you’re doing, so we’d like to invest in your company too.” Also part of the standard sales pitch. Most firms invest in most of their startup clients—it’s simply the law of big numbers: Invest in enough dumb ideas, and one will turn out to be a Google.

“We can work on the billing so that you pay us when you get financed.” The final flattery in a good sales pitch. As with the others, don’t think you’re special. This is a common offer.

“I’ll have that to you by the end of the day.” The important question for you to ask when you hear this is, “End of exactly which day?” Because every day has an end. And you should find out how your lawyer defines the end of the day: 6:00 pm or 11:59 pm (thanks, zakstar).

“Don’t worry about the date on that option grant; it’s not a big deal.” Unless you enjoy getting indicted, you should run from a lawyer who utters such stupidity.

“The bill would be lower if it weren’t for the lawyers on the other side.” You do realize that the lawyers on the other side are saying this about your lawyers too, right?

“I thought you were more interested in getting it right rather than saving a few dollars.” In other words, the legal bill for your series A funding may exceed the amount of capital raised.

“Your case is much stronger than theirs; I’m sure we can convince them.” If your position is so strong, you don’t need lawyers. It’s when your position is weak that you need them. Also, your opponent is hearing the same thing about their case.

“We have relationships at the highest level in Shanghai/Munich/Mumbai/New York/LA.” In other words, someone from the firm once flew in first class to Shanghai/Munich/Mumbai/New York/LA with the vice premier’s uncle’s sister’s nephew.

“We’d much rather be on the company side than on the investor side.” Let me get this straight: Your lawyer would rather be on the side of two guys/gals in garage who are raising $500,000 than a venture capital fund managing $500 million whose partners play golf at the same country club?

“We usually don’t bill the full retainer; it only happens if there are unforeseen issues that come up.” One of two things is happening: either you’ve been sandbagged with an artificially high estimate or your lawyer just passed the bar.

“Sure we’re busy, but I’ll make sure you don’t get handed off to a green associate.” Translation: Your main contact passed the bar a year ago.

“I’ve done work with Google/Microsoft/Apple, so I know how to structure deals with them.” Translation: “My favorite search engine is Google which I use on my Windows laptop while I’m listening to my iPod.”

“We think you will have a very strong patent.” If you hear this, ask this question: “So if Microsoft infringes on it, we’d win?”

“We know the opposing attorneys, so we’ll be able to work out something quickly and cheaply.” This is like asking the hotel concierge what restaurant he recommends. There is usually no such thing as quickly and cheaply. There’s only “good and expensive,” “quick and lousy,” and “cheap and lousy.” Pick one.

“I can call several venture capitalists to help you secure funding.” Actually, you should select your lawyer as much for his/her connections to the venture capital community as much as legal expertise. However, take this very literally: He/she “can” call—this is different from “will” call.

My buddy Mathew Johnson suggested this topic, so if you’re a lawyer, and this posting upsets you, blame him.

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Article Tags: ceos, dumb ideas, flattery, google, law of big numbers, lawyer, lawyers, marketers, opponent, partner level, personal attention, rain, stupidity, venture capitalists



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Re: About: product production! - At the end of the day, having a patent, copyright or trademark are pretty much useless because if the person who infringes on your legal rights and has more money than you... they'll bleed you dry (i.e. outlast you by being able to pay legal costs) long before you can finish the lawsuit. For instance, let's say the City of Toronto copied my artwork. Do you really think I can file a lawsuit and win against the City of Toronto?? Not a chance. Lawyers will try to tell you differently, but that's only because they want your business.
Re: About: product production! - [quote:2mv0ur0r]Most importantly,with all that has been said...when is it absolutely appropriate to patent your idea? Why do people file for patents if it is not necessary? I would really like to know this please. I appreciate your helpful tips a lot! THANKS. [/quote:2mv0ur0r] Dear Fresh Goods, It is absolutely appropriate to patent your idea when your goal is to license your invention. When you license your invention you are selling rights to manufacture your patented invention. Without the patent you have nothing to sell. People file for patents because they believe it is the right thing to do. Lawyers are very quick to say "You need a patent." This is easy money for the lawyer.
9 Lies that are holding you back - I've picked up this book to assist me with my conversations when coaching business clients and I've found it to be quite enlightening as distinctions are made. The book is titled "9 Lies That are Holding Your Business Back..." by Steve Chandler and Sam Beckford (aka Small Business Millionaire). I'll use this post in two ways: 1. To highlight A Lie 2. To help me internalize the concepts by writing about it in my own terms/understanding so that I can use it in future conversations (yes, I'm feeling a lil selfish and want to take you guys along with the journey) first post to arrive shortly on the First chapter: Lie#1: I Just Need to Know [i:23sag391]How[/i:23sag391] to Do This"
Business plans are a waste of time - I really like what Shri said in a previous post about how the usefulness of a business plan depends on the individual. However, after reading some of Martin Lindstrom's "Buyology: Truth and Lies About Why We Buy"... I'm beginning to think that all business plans and traditional market research (i.e. using focus groups, surveys, etc.) are a total waste of time. No joke, I'm serious. Lindstrom says "That's because, just like market research, economic modeling is based on the premise that people behave in a predictably rational way", but "Most of the brain is dominated by automatic processes, rather than deliberate thinking. A lot of what happens in the brain is emotional, not cognitive." ("Buyology" pg 28). Basically, consumers will tell you one thing, and do simply do another with their unconscious minds.
Re: Some attractive terms in advertisement - [quote="lane_hug":sqdmyojl]Some terms can make the advertisement look more attractive, like unlimited, free, life time guarantee, and more. These should be definitely incorporated to ensure fast sales.[/quote:sqdmyojl] You've got to be careful with such terms, though. Take as an example the poor Korean dry cleaners who had the words "Satisfaction guaranteed" on their storefront window. They lost (supposedly) a pair of slacks from some loony judge, who proceeded to sue them for MILLIONS of dollars (over a $100 pair of slacks) because they did not provide him with satisfaction. [If the sign had said "Satisfaction guaranteed or your money back" perhaps none of it would have happened...] These days more and more people are apt to sue at the drop of a hat, and if you promise them something even though common sense says you wouldn't have meant what you said (for example Pepsi got in trouble because their commercial for Pepsi points, at the time the movie True Lies came out, featured a Harrier jet as in the movie. A few looney businessmen bought up all the points the could to get that jet, although they were told it had just been dramatic license, and ended up suing Pepsi for misleading advertising. The suit was dismissed, but the fact that the guy was able to find lawyers who'd even take the case on is scary. To cut a long story short, be careful what terms you use, and think to yourself what you'd have to do if people took them literally.


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