As part of the diligence process when we sold StyleFeeder to Time Inc. last year, I had to come up with a detailed list of all (yes, all) contracts that the company had executed. To my surprise, this amounted to several hundred agreements that I had executed with employees, affiliates, hosting partners and – something relevant to this discussion – contractors. Imagine my culture shock when I wandered into Time Inc. in a post-acquisition haze and expected to sign contracts on my own and was instead shown the laborious process required to get something simple signed. Normal trajectory for getting something signed frequently took a whole month (yes, in the Gregorian calendar! I know!).
Previously, whenever I wanted to onboard a contractor, we would simply whip out our template legal docs (which I shall come back to in a moment), fill in a few blanks, get the contractor and me to execute it and then file it away in our filing cabinet. It wasn’t until later that I realized how critical this ability was to our success.
Sometimes you need a designer. Or an iconographer. Or a developer. Or whatever. It should be easy to bring that person on for a week or a year to help make your project successful. It should not require any effort as effort is a chilling effect. You should also empower people to make these decisions and expand and contract your team as necessary.
I signed 18 contractor agreements with people or companies that did work for StyleFeeder. Most were designers or developers and were located all over the place, from a few blocks away to Maryland to Brazil to far-flung corners of Canada to Romania. Bringing someone on board took maybe five minutes, but consisted of a few key agreements:
- NDA – a standard mutual nondisclosure agreement that says you won’t convey information about the gig to anybody
- PIIA – a proprietary information and inventions agreement that assigns all the IP and ownership of the work the contractor does to the company
We had four agreements based on whether the entity was an individual, a company and their location (either inside our outside the US). Our law firm, Gunderson Dettmer, made this really practical for us. The agreements were reasonable, short and simple and were never met with any objection by any of the parties we did work with. The fact that these docs were simple and easy to process gave me great confidence that everything we were doing was done properly as there was precious little that a competent person could screw up.
If you’re starting a company, be sure to ask your legal counsel for docs like these as there are a few nuances that you should be aware of (entities in Quebec, for example). And if you’re managing a company, insist with iron-fisted stubbornness that every contractor sign the docs and that they are stored in your filing cabinet. If you’re lucky, a grey corporate lawyer will come along and ask you for them some day.