We started doing some consulting recently and a new "potential" client sent us an NDA to sign before telling us what he wants us to build. I've read that it's not good for consultants to sign NDAs and a lot of them don't. Do you sign NDAs?
Every single client we work with has an executed NDA. If you're going to consult professionally, you need to be able to sign reasonable NDAs.
What that probably means is, you need to get a lawyer to do contract review for you. In other words, every NDA you sign is going to cost you a couple hundred bucks.
Early on, you might eyeball NDAs and then sign them (D.C. Toedt's resource posted crossthread being one way to do that), but once you have an established practice, the risk/reward on freelancing your own legal review stops making any sense at all.
Anybody who tells you consultants never sign NDAs is someone who doesn't do serious consulting. How could it even be possible to consult seriously without signing NDAs? You'd only be able to work on and with public information for clients. I get the sense that a lot of this "never! no NDA!" sentiment is a mix of two things: (a) confusion over the fact that venture capitalists don't sign NDAs (though maybe they should) and (b) the fact that a lot of people who call themselves consultants are really doing one-off freelance work for tiny companies, which, sure, if that's your cup of tea, but...
I think the question to some extent is about the stage you sign an NDA. While it's perfectly normal to sign an NDA when you start a contract, I wouldn't sign one before initial conversations unless I strongly trusted the client, because without knowing the scope of the project you have _no idea_ what's going to be covered by the NDA and it may include things that cause you significant problems down the line.
As a general proposition, someone being asked to sign an NDA in a situation like this will want to look for provisions such as:
1. a requirement that all confidential information be reduced to writing and marked as confidential (to reduce the chance of the discloser later claiming "but I told you that, and I told you it was confidential!");
2. explicit exclusions from confidentiality, e.g., things published, things independently developed or received from others, etc.;
3. a time limit on the confidentiality obligation.
Self-cite here: For a detailed discussion of various types of clauses in NDAS, see http://www.oncontracts.com/confidential-information/. It needs some stylistic editing (I was experimenting), but it includes:
* colored-symbol "ratings" indicating my personal view of how acceptable-versus-dangerous various clauses usually are;
* extensive commentary in a MAN-style format;
* links to actual contracts in the wild that contain similar language.
Is the client real? I only ask because I frequently find that unfunded companies are the first ones to ask you to sign an NDA. Also a company that is doing anything really confidential will employ people on site as opposed to outsourcing.
I can't tell you how many times I've signed an NDA and the person turned out to be a total flake. Usually said flakes know nothing about technology and some idiot told them that having an NDA was important. It's like a child playing dress up — and what's sad that child may be a lawyer or some other vague professional who doesn't know what they don't know.
I've had that. Some one-person marketing agency who wants a Wordpress installation, and you have to sign an NDA because they're going to 'revolutionise the industry'.
It drives me up the wall I tell you!!! The worst are the non-tech types who think they're the next Zuck — you sign the silly NDA and their "idea" is always some vague parody of something that's out there. It's like being a character in a sitcom except it's wasting your time.
I think the only solution is to charge a consulting fee to "look at the idea" which scares away the amateurs. After all if you aren't willing to spend $1k for me to evaluate your "idea" then you aren't serious any way.
If the gig looks like a real thing, I sign the NDA and other related paperwork after review with my lawyer. He quite often gives the agreement a good beat-down. My favorite voicemail of all time was from him after reviewing one such agreement. The entire voicemail was "Egregious".
I don't sign NDAs casually--that is if someone wants me to hear about an idea for a startup, I won't. But for any situation that I have done actual business with there has been a signed NDA.
For perspective, many of my engagements are multi-month situations.
If a company is into something interesting and you are doing interesting work for them, this means that 1) they are in some kind of competitive position and 2) waht they are doing is Interesting and 3) you are part of their leverage in their business situation.
I do like a lot dctoedt's recommendation (do check out his link), and have made some of them bi-directional. That is, they also have to pony up agreeing to keep whatever trade secrets I bring to the equation under the same terms. This, of course, triggers their reflex to say "well you have to tell us first" and then there is no trouble making that symmetric.
Not if I can help it and hopefully never again. I now have my own NDA that's fair to both sides that I will try to get them to agree to instead of whatever horrible NDA they found on the web.
But I've found that I can often rule out working with a client without ever seeing their NDA material. I've learned that the number one question I need an answer to is whether they've ever worked with subcontractors or consultants before. If they haven't, they're wasting my time.
No, never. The risk you are taking is tremendous when signing an NDA. Who is to guarantee that an exact same of your client's idea/technology is not developed elsewhere and your client will hold you responsible for leaking it?
There's also more realistic concerns as well. Most NDAs are written way too broadly. Excluding yourself from a part of the market because of such an NDA is just silly.
What kind of clients do you work with? I'm trying to understand who could be engaging consultants who would be free to post to Twitter anything they learned about upcoming business plans or software releases.
Clients mostly with MBAlike backgrounds come up with NDAs. If I were to stereotype; an investment banker with a lower to mid six figure bonus, who watched Social Network over the weekend.
They're meaningless, so no harm in signing, so I sign.
It's a lot like when a guy claims he's the devil and gives you $50,000 if you'll sign away your soul. Meaningless, so you sign. But that case is slightly worse because you have to sign in blood and the needle pricks.
What that probably means is, you need to get a lawyer to do contract review for you. In other words, every NDA you sign is going to cost you a couple hundred bucks.
Early on, you might eyeball NDAs and then sign them (D.C. Toedt's resource posted crossthread being one way to do that), but once you have an established practice, the risk/reward on freelancing your own legal review stops making any sense at all.
Anybody who tells you consultants never sign NDAs is someone who doesn't do serious consulting. How could it even be possible to consult seriously without signing NDAs? You'd only be able to work on and with public information for clients. I get the sense that a lot of this "never! no NDA!" sentiment is a mix of two things: (a) confusion over the fact that venture capitalists don't sign NDAs (though maybe they should) and (b) the fact that a lot of people who call themselves consultants are really doing one-off freelance work for tiny companies, which, sure, if that's your cup of tea, but...