It's About Agreeing, Not Legalese

You don't often hear about major lawsuits caused by a misunderstanding over an indemnification clause. In fact, it's much more basic misunderstandings or absences of clarity that tend to result in legal fights.

In all my years of doing deals using business contracts, especially in the context of large corporations, I was amazed at how often, draft after draft, markup after markup, really basic stuff in contracts was messed up. The dates would be wrong, what people were actually supposed to do would be forgotten, the monetary sums would be calculated incorrectly, etc.

How did we get to this point? Where contracts are supposedly airtight in form but overlook function? Why does it have to be this way?

I started marking up my own contracts about 5 or 6 years ago. I have no legal training, but I got tired of sending lawyers my comments and having the drafts still come back all wrong. It just seemed easier to mark them up myself. And something surprising happened: most of my changes were accepted by lawyers. Then I started axing sections that were confusing and eliminating sections that I thought were contentious and unnecessary. There would be some pushback, but I got them through in most cases. My deals happened faster, my partners valued my clear and simple contracts.

When things were fewer pages and simpler, prospective partners also realized I stood by our discussed business agreement. Long contracts with small print are for gyms trying to prevent you from being able to quit, not partners.

I started focusing on the Exhibits, the parts of the contracts tacked onto the end, usually left to business people, untouched by lawyers. This was the meat.

And in the interest of doing more work and getting things done, I would read the agreements carefully and see if anything struck me. I'd make my own suggested changes and then ask my counsel, "Is there anything in this agreement that will kill me? If not, don't make any changes." I've been privileged to work with some great lawyers who get this. Lawyers who know that the mark of a great legal advice is simple documents, fewer markups, and risk assessment, not red ink.

When Jared Grusd and I were at Google together, the document to do deals in my program was 10 or 15 pages long. I kept asking Jared, who was the most senior lawyer in the NYC office, if we could cut sections to make the deal easier on partners.

Jared kept cutting. Then one day he said, "I'm gonna knock your socks off when you see how short it is." I asked if it was 3 pages. He told me it was 1. In fairness, it was two columns on one page. But it was a huge reduction in length. Partners started signing it with no markups. We did a lot more deals.

Simple agreements have become a passion of mine. Letter agreements are binding. Napkin agreements are binding. Why not question 10 pages of legalese?

When Jared and I met Abe Geiger, we found an entrepreneur and CEO with a passion to tackle this problem from the ground up. In Stu Ellman and RRE, we found an investor partner experienced in building companies from the ground up and in rebooting unnecessarily complex industries - most notably in financials and payments.

Shake, which is available today, allows any person with an iPhone to execute simple, binding agreements, in plain language with the minimal amount of words and steps. Answer some questions, read a simple agreement, sign on your phone, and send it to the other party. Or if you're in the same room, do it together from the same phone. The team is starting with a few agreements (NDAs, consulting, lending) but this is just the beginning.

I'm proud to serve on the board of Shake and to use the agreements for many of our contracting needs at BuzzFeed. I'm particularly excited to use the NDA when our clients and partners request confidentially, often on the spot, when they want to disclose something like a confidential marketing campaign or partnership program.

Abe and the Shake team have no less an ambition than to completely change how people do legal agreements. And it starts with Abe naming the company and app Shake, as in handshake.

Using Shake should be about the bond of stating the facts, agreeing, and shaking on it. In many ways, Shake is a return to old traditions plus a layer of technology. It also is part of a big trend toward the consumerization of all technology. I hope you give it a try and let Abe and the team know what you think.