The Cost of Law

Knowledge of the law is a powerful tool. Our entire country is founded on the rule of law. There are many days I wonder about our reliance on the courts and the slew of laws that exist, or shouldn’t exist.

I have always believed that nothing is standard as long as you have a legal document backing it up. For instance, in the startup world, there are standard documents that many use to attract investor capital. Some are good, some are not so good. For instance, I have never been a fan of a SAFE document. It is fast and off-the-shelf, with the possibility of high risk down the line. I get why people use them, but spending time understanding what is being asked and what the legal language means can be educational and possibly lead to a better outcome. It is almost impossible to roll back documents that create the foundation of a company.

Why did people turn to SAFE documents? Plain and simple, cost. The cost of law is outrageous unless, of course, you are a Fortune 500 company. Top lawyers can cost up to $3k an hour, and that does not guarantee they give solid advice.

We recently ended a lawsuit that began over eight years ago. Our contractor died, leaving us with an absolute mess to clean up. We hired someone else to finish the project. We were happy to pay the old contractor (someone else took over the company) a cash sum for the job done, but not for the job that had to be fixed. We went through the documents and offered the sum we felt was legit. They sued, and after eight years of lawyers, depositions, pulling records, and everything else that goes with a lawsuit, it was settled for the exact price we had offered eight years ago. The only financial winners here were the lawyers.

The amount of cash Gotham has spent on lawyers since we opened is substantial. Navigating the industry’s legal landscape and addressing numerous issues has been expensive. The only people making money in this industry seem to be the lawyers. In an industry that is nascent, where the majority of owners, be it a dispensary, a farm, or a brand, are barely holding on by the seat of their pants. The majority cannot afford lawyers, lobbyists, and everything else required to secure a seat at the table to take an industry seriously. Unfortunately, that is how the system has been set up.

I appreciate everything our legal team has done for us, but as we build our legal agent, which will have access to every single document the company has, I do wonder what legal firms will look like in the next five years. When corporate America, particularly publicly traded companies, can afford the cost, how do the rest of us have representation? Should there be fines for bringing absurd filings to the table? Is the system just rigged for those who can pay for proper representation? Can law be disrupted? Perhaps AI will pave a new way, but I am not convinced.