My company is in the blockchain space and there is a low chance of any conflict.
The potential client is a director at a wealth management firm. She's requested that I sign an NDA before we meet.
Should I sign it??
If you go with option (2), you can buy yourself a little time to try to qualify the client prospect by saying you'll sign an NDA, but you'll have to have it reviewed at some expense before signing, so you'd like to make sure there's an actual deal there before signing.
† This is probably not exactly the word I want to use here.
Please would you explain what you mean by "practically universal".
NDAs are typical when sharing perceived sensitive information. If the clauses are wholly about protecting that information transference and not otherwise binding you, then consider it. If the NDA clauses would restrict any further business by you in the market or domain, then run.
IANAL - if you have access to one and can afford one - do that
You can clause-by-clause compare an NDA to your own standard MNDA and, if you're not confident they're basically the same document, offer your own MNDA instead of theirs.
If this is your livelihood, getting a lawyer is even more important. Consider it a cost of doing business.
Regarding your startup, my personal opinion is that it is not smart to work on gig which is in fintech while you are working on fintech startup. It is just not worth trouble. Even if you do not sign NDA. Find some other gig. This my personal opinion.
But yes, I totally agree here. I once lost out on a great opportunity because I was stubborn about signing an NDA that probably would have had zero effect on my future work. In reality, it's usually a formality that companies make you sign to protect themselves. Or maybe because their investors demand it. But most companies aren't looking to sue you and most people signing NDAs aren't looking to screw over the companies they do work for. But yes, occasionally companies do come across someone who is up to no good (e.g. an unscrupulous consultant who also does work for a competitor) and in those rare cases they want the NDAs there to protect themselves.
As for signing an NDA, I've found that often people who require them are pedantic about unimportant things and difficult to work with, so unless there is a very good reason they'd need one I'd be very cautious about getting involved.
I've literally walked away from deals because of pissing contests over signing an NDA. But sometimes I say screw it and just sign it if I'm already interested in the work; although in that case, I make sure it's a mutual-NDA. Pick your battles and all that.
But here's the thing: they're a bad way to start a prospective relationship and unenforceable. So it shows that the person you're talking to is a) litigious and b) doesn't understand how the law works. Those are people I tend to avoid.
I'll also say this: I've never signed an NDA and then been told something I didn't know already.
Of course there's nuance there, but in the case of "Hello contractor, I've got an idea and I want you to sign an NDA for me to tell you about my predictive analytics solution", unless the contractor literally steals the name of the company and weirdly specific plans you provided in writing, there is no case. And even if there was a case, do you have tens of thousands of dollars to chase it?
Is there a famous case where an NDA became a key factor? I think Facebook would be the one everyone thinks of, but that wasn't a case of an NDA, there was a lot more going on there. But if Mark had just said "Actually, I'm severing any business relationship and starting an entirely new codebase, company, etc. by myself" he probably would have been fine. Especially in California.
As I said elsewhere on the thread: it's true that some companies try to sneak more general IP agreements into NDAs, including noncompete clauses, but the terms of a standard MNDA are pretty straightforward.
How are you 100% sure of that if you haven't heard the idea from your potential client?
Not worth my time to go through those hoops. If they think their stuff is so snowflake special and need to protect it with an NDA, they can pay my fee for signing an NDA.
NDA's and Non-Competes both change my requirements.
Without them my rates are $150/hr with 40 hours pre-paid upfront to discuss the project. When we move forward those 40 hours are credited to them.
If non-compete/NDA is involved, my rate goes to $300/hr with non-refundable $10,000 deposit that does not translate to credits.
The most likely scenario: if their startup does really well and becomes popular, you can be sure that this company with the NDA will look and see if they can grab some money with a lawsuit threat.
For example, for early discussions a mutual disclosure agreement is another nice way to get compliance with a company's standard legal terms (ie. both parties agree to not reveal anything confidential or sensitive), and can be useful to get things started far enough to get upper management support required to make exceptions to their standard legal procedures. (I've been in the situation where my and a supplier's legal team's where far and distant enough from a project not to prioritize resolving incompatible differences in standard contract terms for months eventually requiring a loud "nudge" from upper management behind a closed door.)
For companies large enough to have a large bureaucracy of legal staff whose standard terms are a Byzantine compromise of many different departments / businesses requirements / and past initiatives. Then local legal aids will typically had a fixed set of options of types of contracts they'll entertain quickly (in order to get anything done). For example, they might have a mutual disclosure agreement on file. Later, if the questioner offers something important enough to get upper management's attention minor modifications can be made within limits. Then again you have to offer something unique and important for that to happen.
But most importantly, find a lawyer that can balance your needs and what is practical.
For example, real world here. I was signing a contract with a contracting house to work at a big bank. The lawyer told me: "This is a basic - screw-you one-sided contract. But don't worry too much about that - because the more one-sided sometimes the better when you go to a judge. HOWEVER, these 3 items you MUST get changed."
One of the specific things I remember is the phrase "related to" because in software everything is related to everything else in a legal sense. (IANAL)
Contrast this with a well-meaning, less experienced lawyer friend who said - you have to change everything - it is a horrid contract.
Because I was very specific, and could clearly articulate the reason for the changes - the changes happened. But big difference between the 2 different lawyers' suggestions.
Non-competes are the problem and a huge anti-innovation monster out there lurking to get you. They can appear in NDAs, contract agreements and standalone. Refuse to sign these or make sure they ONLY last as long as the contract itself if you must. Some clients try to get you to sign a non-compete for 2+ years on 3-month contracts, many times they are just sending on a default template but some do it on purpose. That is just blatant ownership especially when you come on to transfer knowledge and skills to them in building up their products. They can own the work you do for them because they paid for it, but don't let them own you.
Yes, I'm happy to treat confidential information confidentially.
Don't mess with my ability to earn a living, though. That's what non-compete agreements seem like, to me.
¯\_(ツ)_/¯
There's a pro-con to it, no doubt. If you think you have leverage, skip it. If you don't have leverage, probably easy enough to eat it.
If their NDA is basically the same as your NDA, it's not worth fighting to make sure you're signing your paper and not theirs.
Unless you read and understand ALL of it and there is no crazy terms in it.