Why we don't sign NDAs
I’ll start by apologizing.
Generally speaking, the NDA request happens at the beginning of a relationship. So if you’re reading this, it probably means this is one of your earliest interactions with me and/or my agency.
This isn’t how I like to start any relationship. It feels combative and maybe a little petulant. However, in an interesting twist of meta-irony, the importance of starting our relationship in the right way is the primary reason for my decision.
Here’s a list of reasons I have decided that no one from my agency will sign generic NDAs:
The protection language is almost always far too broad, vague, ambiguous, and otherwise nebulous. This puts us at a massive disadvantage and creates an open-ended risk profile that, in many cases, is years long.
Even if we’ve done absolutely nothing wrong, the simple act of allowing an NDA to be put into place opens us up to the possibility of abusive or frivolous litigation.
Organizations change hands (often). While we may love, respect, and trust each other to the ends of the earth, if your organization ever changes hands, so too does the agreement. This places us at risk of being suddenly thrust into ill-defined legal requirements with people and/or organizations that aren’t guaranteed to play fair.
The remediation language is almost always far too open-ended and requires that we agree to eventualities that are near impossible to fully define. You’ll often see language like “irreparable harm” and “cannot adequately be compensated with damages,” etc. This is what Nassim Taleb would define as “negative optionality” which means the potential negative outcomes are near limitless.
Cost to Benefit
The risk reward-ratio is strongly stacked against us. The worst case scenario of potential frivolous litigation is complete and total devastation (oftentimes, both professionally and personally). Our best case scenario is earning one new client. While I would never want to diminish the value of earning a customer, the mathematical truth must be stated clearly whenever working to mitigate risks.
Between our client list and the customers we serve on behalf of strategic partners, we work with thousands of organizations a year. The likelihood that a few of these organizations are somehow thematically related is very high. Because so many NDAs include vague non-compete language, this puts us at the disadvantage of possibly being in immediate (and unknown) breach of contract.
What we will sign…
With the above stated, I understand there is the need for legitimate legal protection. Here are the specific instances when we’ll consider signing an agreement:
Clearly and specifically defined intellectual property
If your organization has very specifically defined and unique intellectual property that we will be exposed to over the course of our engagement, we’ll consider an NDA that is equally specific in definition.
White label and referral partners
A large segment of our business involves a strategic partner. I obviously understand the need for strategic partners to protect their clients, vendors, and employees and will consider signing clearly worded non-solicitation and non-recruit agreements.
Specific use cases
Obviously, I don’t know everything about everything. If there’s a specific use case that requires legitimate legal protection, I’m more than happy to entertain the discussion as long as it can be approached in a friendly, “win/win or no-deal” paradigm (thank you, Stephen Covey).
In any of these cases, please understand that I will have our legal advisors involved in the discussion and in drafting or modifying the agreement so it is suitably win-win. In this instance, the project in question would need to have an adequate degree of potential upside to justify the time and expenditure associated with this exercise.
If you made it this far, I hope I haven’t offended you. Your business is important to me, truly. I would love the opportunity to help with your marketing efforts and hope we’re still positioned to move forward with the understanding that my team and I take every reasonable measure to mitigate risks and fears that prompt the desire for an NDA.
If this is a deal-breaker, I completely understand and respect your decision. My hope is that we haven’t spent too much of each other’s time before landing here. I wish you the best of luck in your business endeavors.
Founder & CEO