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From the beginning, digital studios large and small have leaned on contracts, SOWs, and MSAs that weren’t quite right. Either they were based on agreements that had been created for a different industry or we worked with lawyers that didn’t quite understand the nuances of the work.

Many of us rolled our own which lead to some great innovation while also exposing us to more than a few liabilities. Finally, there is a standard base level agreement for digital services. Crafted by Gabe Levine and Josh Barrett, the Bureau Standard Agreement for Digital Services is a starting point for digital agencies that has been written based on the work that we do. Listen in as Gabe and Josh talk about the origin, process, and future of this large step forward for the industry.

Be sure to join us for Owner Summit 2018! You'll learn more great insights and connect with digital agency owners from around the world. Plus you'll get a copy of the new Bureau Standard Agreement!


Carl Smith:
Hey everybody and welcome back to the Bureau Briefing. It's Carl. Today we are having an episode that has been a long time coming for any woman, who runs a digital studio. Today we're gonna talk about the first agreement that's being created for digital studios, specifically around more of the CMS type projects, the marketing type sites. It's a beginning. I'm really excited to have with me today, Josh Barrett, from Create Legal and Gabe Levine, from Groundwork Legal. How are you guys doing?

Josh Barrett:
Really well Carl. Thanks for having us on. 

Gabe Levine:
Yeah, I'm good. Thanks dude. 

Carl Smith:
Yeah, so this came up, because in one of the slack channels, somebody basically started a thread and said, "Hey. Is everybody else still dealing with the fact that we're working with old baseline contracts from the print world," and that sort of thing. And then, somebody actually called you out Gabe, and said, "Hey Gabe Levine. Fix this." What was that like, when you got the call to the Slack Channel?

Gabe Levine:
Nice. I mean, you may remember Carl, from the very first, what was it then, Shop Talk. 

Carl Smith:
Oh yeah. 

Gabe Levine:
The name of Owner Camp prior. This idea had crossed my mind. I brought it up. One of the reasons is that, for any of us who've ever signed, or worked with in any way, the construction contracts, they have this lovely form, right, that is very beneficial in general to the general contractors and subcontractors. It crossed my mind that all of the shittery, that I was dealing with, in trying to negotiate these things, stemmed at least in part from the other side saying, "Well, it's standard that x, y, z."

I had this experience of representing numerous agencies, but no sort of retort, other than the AIGA, which they seemed dismissive of and frankly, which wasn't tailored really for most of the work I was doing. When I saw that I was like, "Okay, it's time. Get your ass in gear." I'm definitely not doing this alone, so, "Hi Josh." 

Josh Barrett:
Well now, I remember you texted me. You're like, "We have this discussion on the Slack, and talking about doing this agreement. Do you want in?" I was immediately, it's like, "Yeah, let's do it." 

Carl Smith:
I have to say on behalf of the thousands of digital agencies that are going to know about this at the beginning of 2018, thank you. We modified and hacked ... You've both seen them. You've seen the documents that we created on our own. I'm kind of curious. When you first started engagement with a digital agency, and you look at basically the agreements and the contracts we've come up with, do you see a lot of the same mistakes? I mean we were doing the best we could. 

Josh Barrett:
I mean, Gabe and I both see hundreds of agreements per year inbound and the ones our clients come to us. You know, they range from, you know, okay to dangerous. We're hoping to narrow down the amount of opportunities where we're in the dangerous category. A lot of 'em, or not a lot, but a good number of folks come to us, whether I've seen it with freelancers and I've seen it with large agencies that come to us with some version of the AIGA standard form of agreement. 

Carl Smith:
Yeah. 

Josh Barrett:
I'm on the board of the local chapter of AIGA here. They do a really good job. That agreement is actually a great comprehensive, sort of issues checklist. We didn't think ... It often doesn't work for many digital agencies, because it's pretty one sided. It's kind of full of legalese and so, even though I refer to it often. I know the people that wrote it. I've visited with them, in person. We thought we could come up with something that was a little bit more practical and based on our experience and what it takes to get you know, have an agreement that's sort of down the middle, that can get signed and get that deposit in the door, so the agency can get to work. 

Carl Smith:
Well yeah, and I think that's a huge part of it. I think that's also part of it. When Gabe and I first met, I was the person that he just published about why contracts weren't necessary in a fairly major digital publication. Gabe luckily saved me. He was my salvation. One of the things was, it took so long to go through that contract process. We did start with the AIGA. I have to say, thank goodness it was there. I don't know what we would have done if that hadn't been there. Just like you were saying Josh, there's that good checklist, kind of part of the AIGA contract, but now we're moving on to create something for us. What is that process like? I know the two of you worked together. How did you start?

Gabe Levine:
Well, started with a bang right? We're exchanging stuff over email and a Google doc. As things do, you know, for a week or two or more, it kind of went by the wayside. I knew to get my ass in gear, I needed a deadline. I wanted to meet with Josh in person. He's up in Portland. I'm down in the Bay area. I asked him if that was cool. He was cool with it. We scheduled a date up in Portland. A couple of weeks ago, I went up there and we got a ton of work done on the MSA, kind of reached from version 1.1 to now we're at 3.3 in that drafting. I think we're pretty close to there on the MSA. We have a draft, SOW to iterate on now as well. We'll trade that back and forth. 

Josh is gonna come down into the bay area and we're gonna get to work on putting together some guidance and introductory materials for people. I think Josh was a little reticent, like, maybe we're gonna disagree about a lot of stuff. Of course, for those people that haven't worked with me too much, maybe I seem like I'm a little bit tough to [inaudible 00:06:56]. But, I was, as it turns out very agreeable. We got a ton done. I know Josh also sort of has unique ideas that I'll let him talk about, in terms of format and he's exceedingly good at cutting too much wordiness and legalese, so that was an important part of the process for us in this as well. 

Josh Barrett:
Yeah, I think even though Gabe and I have similar practices, I probably say with me being up in Portland, more of my clients sort of bend to the design side and maybe in San Francisco they bend more to the development side. I don't know if that's a stereotype or universally true. We do have different experiences from other places in our career. We knew that combining those experiences would help create a better product. 

We really did try and balance those experiences and have something that was tight, well written, as a piece of writing, and that was efficient about getting the job done, that it had to do. I mean, you know, clients like short agreements, because it's less brain damage to read through. There's also business reasons to be as efficient as possible, because you know, clients are more likely to be able to read through and agree to a short agreement than a long agreement. We really worked hard to be efficient both with the SOW and the MSA document. 

Carl Smith:
I think that's critical for the shops as well. When you're trying to close that prospect, the last thing you want is to shove a volume of words in front of them. By the same token, it's a fine balance, because you also want to look like a professional entity. You don't want to look like somebody that's just gonna get pushed around. It's an interesting balance to strike. I had not even thought about it, until we were on this podcast, how well the two of you balance each other out. That is awesome. 

One of the questions I have ... You were hinting at it a little bit. You've got more design oriented clients in Portland. I think that does hold true, by the way. I think San Francisco, while there's a lot of great design, there's a real emphasis on the development side. Just looking at the shops themselves, they were all so different, right? I mean, just ask somebody about the project management system they use. They will roll their eyes, because nothing fits them. 

Josh Barrett:
Right. 

Carl Smith:
It's the same thing here. It's like, no agreement is going to fit any, one shop. When, you start looking at that ... How do you find the baseline that we can all start from?

Gabe Levine:
Yeah, well, so, obviously it's hard to craft anything that's one size fits all, right? You're much better off, if you can take this thing and run with it with your own lawyer, whether that's one of us, or someone else, and use it as kind of a guide in a template. What Josh and I did ... I think it was Josh who originally had this idea, was to think about doing versions. Right? 

If we're gonna ship this, and get anything out the door, we gotta confine ourselves to something in this first version, otherwise we'll be trying to solve a thousand problems. That's what we did. Like you said at the outset Carl, we tried to keep this, sort of, tailor it to front end development, CMS level development and design work. Then, in later versions, we may wanna iterate on that. I think likely will, and give different template statements of work, for different types of work that agencies do. 

Carl Smith:
See, I love this idea of somebody being able to take this, and work with either of the two of you, or if they have a lawyer they've been working with, and those of us that had lawyers, that were not specialized in the digital space, we suffered, because they didn't have a grasp of how different it was. It feels like this could be almost like an on ramp for them, to start to understand, "Oh wait. This is different." 

Josh Barrett:
Yeah, there are a lot of differences. I think the point about a template is really important, because I can think of a couple of clients I met with in the last week. They would describe themselves ... We do small business websites. We build on WordPress and we do front end design ... I mean those are exactly the words they would use to describe themselves. 

When I peel back the layers and talking to 'em, they have different processes that they manage. They think certain of their strengths are different, or they have different risk profiles that they're comfortable with. One client might be more cavalier about certain things, and another client is very risk averse and so, even if for any particular project, the deliverables would be identical. Businesses are still different and so the agreement will need to be customized to reflect those things, but yes, it's a great launching point to be able to get into those things with one of us, or someone's own lawyer

Carl Smith:
When we look at this, and realize that it's a first version, what are, like at a high level, what are the things that you're hitting on in this MSA statement of work kind of combo?

Gabe Levine:
Yeah, all the key ... Everything you need and nothing you don't maybe is the way intellectual property and ownership and licensing, termination and the important kill fees, obviously invoicing and payment. There's a really important section both in the agreement and the SOW, about client obligations and assumptions to ensure that the client is doing its part and providing its deliverables when it's supposed to and that it's cooperating over the course of the project. We've all seen plenty of projects go off the rails, when a client isn't the most cooperative. This agreement is built to give the agency some choices when those things happen.

Carl Smith:
You know, I remember there was a video on termination and kill fees. I can't remember what it was called though. Gabe, do you have any clue what that was?

Gabe Levine:
F ampersand something. 

Carl Smith:
Gabe, did you handle that section of the draft?

Gabe Levine:
You know, I mean, as much as you can pair program a contract, we did. 

Carl Smith:
Nice. 

Gabe Levine:
It was really fucking fun. I mean, Josh and I ... It was. Josh and I have the benefit of having our own practices, which means we get to do a lot of things that are great, that lawyers that have to sit in a large, or even a medium size law firm office every day. What we don't get nearly enough of, is collaboration. I personally miss it. I'm pretty damn sure Josh misses it too. 

Josh Barrett:
That's right. 

Gabe Levine:
Yeah, so it was really fun process. As we were finishing up the day in Portland, I was like, "So when are you coming down to San Francisco, so we can dot the, I's and cross the T's?"

Josh Barrett:
Well, in just like a couple weeks, or maybe it was 10 days after we finished, Gabe you just sort of texted me out of the blue. You're like, "I'm really excited about what we made." I'm like, "Yeah. I think this is really great." I'm excited to use it in my own practice with my own clients, and you know, just it upped ... Working on it with Gabe, upped my game. I think Gabe would say the same thing. And so we have some new stuff to help our respective clients with. 

Gabe Levine:
For sure. Yeah, the knowledge in that room Carl, just the sheer power. 

Carl Smith:
I'm excited because we're gonna be sharing this at Owner Summit, right? This February, when we're getting together at the Isle of Palms in Charleston, we're gonna have 150 owners, who I think are gonna be salivating to just find out more. That to me is when this gets really fun. We're gonna be able to start giving everybody something where they can say, "Well, the industry standard is ..." Right? We've said it a lot, but it's been total BS. We just say, "Hey. If you just say it's the standard, it's totally fine. Everybody will believe you. Nobody knows." Now we're gonna have something that we can actually have be our version, or have the impact that, that AIGA contract had. 

Gabe Levine:
That's the hope. I mean, ultimately, this has a lot of reasons for being. That first time that either Josh or I are in a negotiation, and we're able to ... Either this comes up, on the other side, or we're able to point to it and show the potency of the bureau, because a very important part of this, is the bureau community, and the fact that there are so many member. Really the higher, to use a sort of term of art I guess at the adoption rate. 

More people who are using this, and the more it's talked about, and amplified, the more it'll be better for everyone who's trying to use it as a standard. The more I think Josh and I and other lawyers, who are trying to help out agencies can say, "Oh no. Your standard is not the standard. That's the standard for funded startups in Silicon valley. The standard for agencies is ..."

Carl Smith:
Right. 

Gabe Levine:
And then point to it. 

Josh Barrett:
No, that's great. You know, I'm really looking forward to feedback at Summit and afterwards, just because ... I mean, it happens every day, where ... I've been doing this for over 20 years. I work on contracts every day, and then a client asks a question or raises something. It's a little wrinkle on something that I haven't thought about. I get to think about it, and come up with something new, or realize, "Hey. We can tackle that. That'll benefit a bunch of people," and so I'm really looking forward to the feedback. I think that will help develop it into that, kind of industry standard tool. Rising tide il float all boats. 

Carl Smith:
Obviously, February you're gonna be presenting it. You're gonna be unveiling it as it were, this first version. Then what? How do you keep it fresh? How do you expand it out?

Gabe Levine:
Well, we'll probably have to have goals and irregular schedule of meetings. To be 100% honest, I don't know that we've thought that far ahead. I think we're planning on iterating and rolling out with a new version, say maybe every six months. Then there will be updates presumably to the ... The version will really I think be, more about SOW's, versions of SOW's tailored to specific things that agencies do. You know, marketing SEO, advertising SEM, something that's more focused on development. 

You know, something that is more focused on branding, which is more unique than a lot of this, and creating logos and trademarks for businesses. And then, as we go, sort of on what I suspect will be an irregular schedule, we'll probably give updates to the MSA, when we uncover those things that Josh was talking about, you know, those little nuggets that we think we can add to help out. 

Carl Smith:
I can see where we can keep the Bureau community involved in this, by the people who are using the contract, can feed back to you in mass. This is the pushback we're hearing. These are things people are asking. You know, different questions around it from the client side, so that when you do every six months or however, you could go in armed a little bit, knowing what the masses are hearing. The masses. You know what I'm saying. 

Josh Barrett:
The masses. 

Gabe Levine:
Yeah, yeah. 

Carl Smith: The masses. 

Gabe Levine:
Those masses could feedback to you too, and then you could ... No, I'm just kidding. 

Josh Barrett:
You could filter it all out Carl. 

Carl Smith:
I do. I filter it all out. I'm filtering this out actually. When you ask me, I'll say, "No, I don't remember Gabe saying that at all." Plausible deniability gentlemen. I think that's what it's called. 

Gabe Levine:
Yeah, yeah. 

Carl Smith:
Yeah, I learned that from Hamilton, not from anything legal. Apologies. 

Josh Barrett:
You know, in addition to the additional SOW's, we're putting together a little explainer document, some commentary that goes along with it. That's also a piece that we hope will iterate over time, to maybe provide some you know, alternatives on how to negotiate certain provisions, or some different ... Sometimes I find a negotiation can be resolved by asking the other side, "Hey. What's the business reason for that request," and really getting into the business explanation can help address problems or come up with alternative language, rather than just pushing markups back and forth, which doesn't do anybody any good, except Gabe and I. 

Carl Smith:
I'm glad you said that Josh, because [crosstalk 00:20:57] I was would have to say, "Wait a minute." 

Josh Barrett:
I recognize that. 

Gabe Levine:
I'll do this and if for some reason Carl feels uncomfortable with it, he'll cut it. For those of you who are tuning in and being introduced to Josh for the first time, he's simply an excellent transactional lawyer, and negotiator. He's recently published and there is now available a book on negotiating those hideous inbound contracts that Josh and I and lots of lawyers representing small businesses have to deal with on a day-to-day basis. I suspect that most, all of you could benefit from that. Take a look. 

Josh Barrett:
Oh wow that's-

Carl Smith:
Cut it? Hell, I'm gonna put it in the show notes. Are you kidding me? I want a copy of that thing and I don't even do it anymore. I just wanna see what I did wrong. 

Gabe Levine:
Yeah. 

Josh Barrett:
That's nice of you to say, Gabe and Carl. I betcha we can work out a thing for Books And The Bureau, so they can get their hands on it. 

Carl Smith:
There you go. We'll have some there. Gentlemen, I have to thank you. On behalf of the Bureau community, going into 2018, knowing that we're gonna have this in our arsenal is just amazing. Thank you both very much. 

Josh Barrett:
You bet. 

Gabe Levine:
Thank you. 

Carl Smith:
To everybody listening, if you want to see this agreement, if you wanna hear Josh and Gabe talk about it, if you wanna ask them questions about it, there's one place you can do that. That's gonna be Owner Summit, at the Isle of Palms in Charleston. That's February 11th, through 13th. Grab your ticket. We've only got a few left. Everybody else who's not coming, I guess you're just gonna have to suffer through, the way that you've been doing. Eventually I'm sure we'll get it out to ya. Thanks for listening. We'll talk to everybody soon. 

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