25 lbs of paperwork to register an online school? Sounds less about protecting students and more towards protecting incumbents and cronies.

When the government makes you waste a a day filling out paperwork to prove that your dog food doesn’t contain human remains, don’t blame the regulators. Blame the guy before you who made a buck by vertically integrating his cannery and his morgue.

I used to work in compliance and the number of regulations that are punitive punishments for bad things that actually happened is just astounding.

SOX compliance is arduous but it only exists (and is as strict as it is) because some banks decided to destroy the global economy just to make a bit of money and couldn't understand why this was a bad thing.

Sox was passed in response to Enron. While that may have been a big failure, it had no effect on the wider economy. In fact Enrons scandal only came out after the 2001 recession ended... the economy grew during and after Enron’s failure.

What are you talking about. It was a massive drag on the California economy while they existed. They were literally shutting the power system for millions of people down to jack the price.

That was more a failure of the artificially constructed electricity market. It didn't allow longterm contracts.

Weirdly enough, cities that had their own power companies could have such contracts and didn't get rolling blackouts. I worked in Santa Clara at the time and lived in Sunnyvale. We never lost power at work but frequently found all the clocks flashing when I got home.

Which sort of suggests that centralization is the problem, not public versus private. We had a private company failing and public power companies unperturbed.

Yet some how the same regulated market didn’t experience the same problems after their bankruptcy? Come on, you’re really stretching here when there is an obvious answer.

You seem to be looking to blame centralization to fit a preconceived normative view of economics rather than just acknowledging maybe markets were not effective or efficient in this particular instance and in fact suffered a massive distortion specifically because a decentralized profit motive allowed one party to abuse market making mechanisms and hijack the price setting function so crucial to efficiency.

I think if you and I lived on the same street and everybody on our street decided to generate and distribute our own power, we would never create such dysfunctional rules.

And if we did, we would probably change it the day after it failed.

Centralization enables a lot of good thing but also some bad things. Lobbying thrives on centralization because it is easier for decision makers to scam people they don't know, more likely to happen with centralization.

Have you ever lived in a neighborhood with a home owners association? Any institution that is made up of more that a few people will come up with rules that seem stupid. Even in a small scale like that.

my knowledge comes entirely from the documentary, but iirc Enron both created the energy market, allowing energy futures to be daytraded for the first time, and manipulated the market with bidding.

the market itself was a massively cool idea, it's just that Enron had a massive conflict of interest and played both sides. they should have stuck to being a market maker and spun off their trading arm.

But that has nothing to do with SOX. If Enron didn't commit fraud, they could have continued being a drag on the CA economy for years longer.

The CA blackouts predates the Enron fraud and accounting scandal by at least 6 months. At no time during the blackouts was anyone aware of Enrons fraud.

SOX was regulation to prevent that fraud. Notice, it does and says absolutely nothing about the energy market. That's because SOX was not designed to address the cause of the CA blackouts.

Destroyed the pensions of many people, though.

Why are Americans invested in their own employer? It serms excessively correlated. My company pays my pension into index funds.

This has changed for many large US companies when it comes to their 401k plans which are often the main vehicle for retirement savings (https://www.thestreet.com/story/13151412/1/how-your-retireme...). There are still many opportunities for a poorly balanced portfolio.

Hedge funds bought shares because of the cooked books and unreal returns.

Many are too lazy to do the research, and sadly, many lack basic financial literacy.

Should the government have waited for another half a dozen “Enrons” before acting? The whole point of regulation is to avoid such occurrences not as an “I told you so”

Oh, there were.

Tyco International Adelphia Peregrine Systems WorldCom (which was a big one)

And there were many more.

And how much time lapsed between identifying the problem, notification, committee meetings, proposal, final draft, voting, and enforcement?

How much business was lost through the two summers of rotating brown-outs? Datacenter outages? Maybe Enron didn't impact America, but thanks to America's pro-business, anti-consumer laws, Enron really hurt California.

> for bad things that actually happened is just astounding.

you are not kidding.

"You mean we have to monitor for this because someone ACTUALLY tried doing that before...?"

Sure, bad things happen. But there's a trade-off between regulatory burden and economic vibrancy and adaptability. We all know that taxi regulations sort of existed because a lot of tourists would get taken advantage of. But then, the taxi companies and politicians exploited it to promote local monopolies and enforced it with limited edition, expensive taxi medallions that prevented people from starting up legitimate cab companies to compete with the incumbents.

That sort of thing happens all the time and that opportunity cost is not often talked about.

Agreed. Though it's tough to square the fact that bad things happen sometimes with desire to do something. The Onion actually had a good video on this a few years ago:

https://politics.theonion.com/truck-accident-that-killed-raf...

SOX exists because of Enron / Arthur Anderson / Tyco / half a dozen others, not banks.

OP was thinking of Dodd Frank.

Right sentiment; here's an editing tweak that lets you make the point more precisely:

SOX compliance is arduous but it only exists (and is as strict as it is) because some company built a $60 billion market cap in 2000 with financial-statement mischief that concealed a bankruptcy in the making.

SOX predates the GFC by a decade.

Nah, blame the regulators too for thinking that filling out paperwork is likely to meaningfully dissuade someone from using human remains to make dog food. It was probably sufficient to explain to that one guy why that was bad.

>It was probably sufficient to explain to that one guy why that was bad.

Greed doesn't listen to reason.

....nor regulators.

Greed listens to regulators that have teeth, because then the expected benefit of non-compliance is negative.

With a functional government, regulations enable the regulators to punish people who do these things.

Since we're talking about human remains in dog food, there's already likely a litany of felonies involved in turning a person into dog food. The regulators just like to regulate.

> there's already likely a litany of felonies involved in turning a person into dog food

yes, it's a felony because of regulation, made by... regulators

IANAL, but I'd guess it's a felony because of legislation, made by legislators.

Theft is also forbidden by regulation, but thankfully I don't have to file daily reports yet to Theft-Prevention Agency listing all the things that I handled but not stolen today.

Theft is not forbidden by regulation, it's forbidden by laws.

What's the difference? Laws are written by legislators, i.e., the elected representatives. Regulations are written by agencies created and empowered by laws to oversee certain parts of the government/governmental functions.

Regulators work largely by requiring reports because most agencies don't have criminal enforcement powers, and thus can act only on the basis of what is (or isn't) reported...

The real difference is that theft is punishable under natural law regardless of what any regulators or legislators might say. There can be no consistent system which would permit theft while prohibiting a proportional punishment for it. If theft is permitted then enforced restitution (recovery of the stolen property) and punishment (fines) must also be permitted, because these are ultimately the same action.

Laws and regulations which are not merely codification of natural law ultimately come down to attempting to create rules which apply to some people and not others. Unfortunately, legislators and regulators get away with this all to often through a combination of good propaganda and willingness to employ unjustified force to achieve their goals.

You don't, but banks and pawn shops do.

It's not there to dissuade you. It's there to provide a paper trail in case you do something stupid.

Or have one page with a single checkbox that says "I understand it is illegal to use human remains in dog food"

Regulation isn't about informing people what the rules are, it's about people proving they are following the rules.

It's both. The level of paperwork depends on the risk profile.

Sure. And there is no way a stack of paperwork can prove you are -not- using human remains.

Check the box that you understand and expect possible, random inspections.

Would you prefer that regulators would sanction bad behaviour and throw people in jail post-facto, make-up-the-rules-as-they-go-along instead?

Because that's the most palatable alternative.

A long time ago, I worked in defense.

Our design engineers had to fill out government paperwork (many pages) that provided an estimate for how long the rest of the government paperwork would take.

Was it a first order estimate or did it include the time it took to fill itself out?

sounds like rocket equation to me, you carry mass that helps you carry mass that helps you carry mass...

To be fair, doesn't that describe agile development as well?

Instead of making everyone sign a stack of papers stating that their dog food doesn't contain human remains, the legislature could simply pass a law stating that you pay fines and/or go to jail if your dog food contains human remains. That way you avoid punishing people who act in good faith for the misdeeds of those who didn't.

Right, because there is no other option than to have the government get in everyone's business. Why should the government impose on my business because some asshole did something he shouldn't have? It's oppressive and we should fight it.

This “imposition” is a cost of doing business. If you don’t like it choose another line of business. For as long as there is a legitimate demand for the product/service in question someone will provide supply at a price point which is sustainable. The process of getting to that point may involve some companies trying and failing before others try and succeed. This is capitalism.

As someone who does a lot of work for state-level regulatory compliance for a winery, let me assure you that the proportion of effort devoted to establishing that we sell a safe product is exactly 0%. It's all about making sure we pay excise taxes and our labels don't violate some modern-day censor's notions of good taste.

The real fun ones are where we have to submit the curriculum for approval every time we make a change (considering we make small tweaks to curriculum every day - they did not plan for that use case).

Good thing there are APIs for printing and mailing changes to a diff :)

How long does it take to get the approval back? I bet they don't even read the list of changes.

The first draft they send highlighted grammar errors with a red pencil. After that I'm sure it's just stacking up somewhere. It's a waste for sure, but changing the system is a long process.

What I've learned is to always include a few token spelling and grammar errors in the first draft of anything so reviewers feel like they have done their job. /s

I used to run a pizzaria and the health inspector would stick around for ages, because he couldn't find anything to site me for. I combed through the specs and found something to keep him happy. It turns out to be a minor NY health code violation to store clothing on the same storage unit as food. So I attached a coat rack to the shelf that held sealed canned good. Problem solved.

You added a duck! https://blog.codinghorror.com/new-programming-jargon/

I'm 100% going to start doing Yoda Conditions. It's genius

See https://en.wikipedia.org/wiki/Law_of_triviality

This is actually a good idea. No /s needed.

This but unironically

Curious, what kind of changes are you making to the curriculum every day that would require you to submit them to the state for approval?

I've been following Lambda School and yourself on Twitter for a while now, and even looked at some resumes for our company.

I have to say, thank you for your thoughtful comments here and on Twitter, and your dedication to students. As a former teacher myself, I know the work is hard.

I only wish there was a Lambda School here in Philadelphia so I could teach here. :)

All of our instructors are remote, apply!

Oh, I didn't know you were still hiring instructors, thanks!

I wonder if there’s a First Amendment claim there.

Or, it serves as an appropriate barrier to prevent people from scamming prospective students out of huge sums of money.

Looking at student loan debt it appears that it was unsuccessful

Prevent other people from scamming students out of money.

Right but it'd be worse if you had the student loan debt AND don't get a degree (or at least a reputable one) because it's a scam.

I mean, is a university education not a sort of scam? They are giving people degrees that cost far too much to justify the kind of job you'll get coming out.

> I mean, is a university education not a sort of scam?

Whether or not "college education" in general is "a scam" can be debated for sure.

But we aren't talking about "college education" - imagine paying for "college education" but it's a scam so you end up with less money and no education.

I think komali2 was saying that's what happens right now — you end up with less than no money and no meaningful education.

It might be - especially in the US, where you have to pay for it (or go into debt); but it could be worse, and likely worse scams were run in the past until they were stamped out by regulation.

Study something that will get you a good job, if that’s what you’re interested in.

You need a happy medium here. You don't want to allow scammers of course, but also don't want to overly protect the incumbents so no one else can disrupt the space.

The happy medium is the have enforcement mechanisms of the tends of thousands of existing regulations that would put a scam business out of existence if a DA choose to.

The fact of the matter is that to protect people... you need to have a system where ordinary people can complain, and companies get taken to task.

99% of preventative/reporting regulation is just cronyism.

We may wish regulations were for a different reason, but this is certainly their most common use case.

Except, it doesn't, because if you're scamming people out of huge sums of money you don't give a shit if you're registered with the regulators.

You do if you want the scam to keep going. See Corinthian Colleges, for example. (Or Trump University's recent settlement, for a more recent example.)

https://en.m.wikipedia.org/wiki/Corinthian_Colleges

Have you ever heard of a company called Wells Fargo?

Couldn't that be dealt with in a private court?

Sure:

https://edition.cnn.com/2018/04/10/politics/trump-university...

Have you ever tried to draft regulation? Even tried to capture everything that could possibly go wrong or be harmful, even unexpectedly and inadvertently? All while knowing that everything you forget will be a “loophole” for the thousands or millions of people coming under the regulations you drafted in the future. And worse if you leave loopholes people will be hurt and then blame the very government trying to create protections in the first place? It’s easy to throw stones at the work of someone else, but this completely emerges to withstand a barrage of stones being thrown.

Right. The rational way to write regulations is to ban everything.

Which to me shows that "the regulatory state" is not the right model.

At what point did I say that? I merely said it’s hard to craft legislation that gets the balance right.

There will always be a regulatory state, the question is what is the authority that imposes the regulation; is it a democratic government, a private company that institutes policy and terms of service, a gang that rules by force and violence. No society I know of has existed without a code of rules and obligations, and America is actually really amazingly effective.

Government measures quality by weighing the paperwork. That registration must have added immeasurably to the quality of the offering.

It's mostly due to common law, which has some imperfections like progressively growing legal bases instead of pre-definitions.

With scams like trump university out there are we really complaining about some paperwork? If a school isn't capable of handling that paperwork, perhaps they shouldn't be school.

I live in a place where the city council has all sorts of leeway on how to apply restaurant regulations when a new business wants to open. And just as you might expect, those who don't have city connections get a lot stricter enforcement of those regulations. Maybe if the US was more Nordic in its government corruption, I'd be more pro-regulation, but I see them abused all the time to keep the insiders rich and the outsiders poor, and the public unprotected.

Is there any upper limit to the amount of paperwork you feel is appropriate to protect from 'trump university' copycats?

Are you seeing any positive side-effects from doing the regulatory paperwork? For example from establishing management/quality processes that you did not have from before, but where actually beneficial?

No, but that may not be true for all schools.

Lack of competition?

Nah, most schools are unregistered and are too small for California to care about.

So much for "states-as-laboratories" [1]. There may be some usefulness in that concept, but without eventually harmonization of best practices, it can also be incredibly wasteful and create harmful barriers to entry.

[1] https://scholar.valpo.edu/cgi/viewcontent.cgi?article=1888&c...

This is actually a good case for the concept as some states will improve their processes to better work with educators like Lambda and the learnings will spread to many of the other states over time. The only way for their to have been a unified process for paperwork, previously, would have been to require too much and to implement a process to prevent states from proactively updating their process quickly enough to be helpful.

There's really not much pressure for states to adopt best practices. I work at a tax policy think tank, and a lot of the most populous and richest states also have some of the most poorly constructed tax code (e.g., CA's Prop 13). They can get away with it because people want to live and work there regardless. The network effects of established urban areas--especially with specialized industries like Silicon Valley has--are difficult to overcome.

I certainly don’t dispute your assessment there, as an IL resident. In quieter areas where regulators have more ability to make changes without making newspaper headlines, and a larger portion of a department’s scope can be covered at a specialized conference, don’t better practices spread a little more quickly?

I’d love to see some lightweight analysis of the different regulatory burdens you’ve dealt with in each of the states you’ve registered in. How many places have you had to liaise with? How deep does it go? Just state level, or do you have to interact with Educational Service Districts etc?

I'll comment after we're done with it, don't want to complicate it while we're still in the middle of it.

I think it would be interesting to know how much you feel this process has influenced the actual curriculum and delivery methods. The last thing we need right now is a regulatory approval process creating some kind of pedagogical monoculture that doesn't allow us to explore new ways of educating folks young and old. There are certainly risks involved with deviating from the norm, but there are undoubtedly rewards waiting to be uncovered as well.

I think the main thing regulation should do is help manage how much risk the students are exposed to. They can filter out low effort scams while allowing experimental programs that can rationalize their approach a wide latitude to innovate and even fail. Based on my cursory assessment of Lambda's model, they would likely survive this type of scrutiny.

Not at all. We have to take what we're currently doing and try to retrofit it to what regulators are expecting.

I don’t think (for us) this process have improved the school at all.

Retrofit in reporting or delivery? That’s precisely the effect I’m interested in. Even if it doesn’t impact what you deliver to students there is still a chilling effect and possible blockers to developing novel approaches.

The juice may still be worth the squeeze for larger/funded ventures. Your efforts to translate what you do to what regulators want to see is probably worth it. However, smaller outfits might be inclined to avoid that work by following the regulatory ruts and deliver exactly what they are looking for to avoid these costs/complexities/risks.

Reporting.

For example, we use mastery-based progression, where students don't move on to the next unit until they've demonstrated mastery in the unit they're currently in, even if it takes longer. It's super expensive to do, but incredibly, incredibly effective.

When a student repeats a week we call that a "flex."

Regulators ask us how long a course is and what exactly the curriculum is for every week. As you can imagine, building in mastery-based progression into the program wasn't on anyone's mind when they created all the regulations.

Interesting, glad you are able to still operate how you like.

My wife is an instructional coach in a public district in Ohio that went from traditional curriculum to a personalized, mastery-based approach. The mastery model has taken a few years to get traction but seems to be catching its stride. One of the challenges is the loss of nuance in a binary grading system, another is the tendency to fall into retry loops with assessments and wasting lots of educator/student time.

The personalized learning is just starting and this past year their data in standardized testing took a hit across the board. My guess is that the teachers are just overwhelmed and its going to take a bit of time and possibly some technology to really dig deep into personalized learning.

The regs you are describing seem far too prescriptive. If you can define measurable goals it seems like they should back off one step in the regulation and try to find a way to just pin you to your promises.

Not sure if you’re in Ohio yet but it might be worth a look.

Legal advise can be tricky, specially when trying to do something new. I have seen a few situations where this scenario played out

Out of curiosity, was the paperwork cumbersome, or did the old counsel just not know?

note: I considered rewording the "not know" bit since regulations can be tricky, there can be other reasons why they might've felt that the need to register wasn't there. Most of which I feel, for counsels, falls into the didn't know, didn't look category.

Old counsel read the regulation passed by the BPPE and said it didn’t apply to us because we didn’t have physical classrooms. The BPPE disagreed.

It took two people two months full-time to prepare and submit.

That amount of paperwork sounds for a lack of a better word – insane. I can't see it being easy for any side of this quantity of paperwork being able to get it right easily.

Perhaps there is an opportunity for some start-up to help solve this.

--

On a different note, I love what you folks are doing and keep pitching lambda to folks who're stuck in long uber/lyft rides with me.

We’re lucky enough to have enough time/money to assign people to it full-time. I don’t know how a small school would comply.

>specially when trying to do something new

New is the easiest case.

If your "new thing" entrenches the status quo and generally benefits those on the top of society the law will be interpreted as in your favor as it can possibly be.

If your "new thing" threatens the status quo or makes the poor more able to annoy those on the top of society the legal system will go through whatever contortions it must to throw up roadblock after roadblock.

If your "new thing" is somewhere in between or if most people are indifferent but there's small vocal minorities who feel strongly for/against your thing that's where it gets interesting.

Glad to hear you're working through it.

At Metis, state and federal regulation (we're accredited) is a big burden - but something I as an instructor feel is in the best interest of my students.

If you don't mind me asking, were you using a boutique lawyer or a big firm?

Big firm. We should have been using an education-specific boutique for this specific thing, but this started happened when we were tiny and still figuring a lot.

I can attest to having a similar issue in a startup that got large, we used one of the big firms for 100% of the work and should have been doing 10% of it with a specialized firm. It's not really startup advice you get, but it can be very costly later. Glad you got it sorted out.

For what it’s worth, $75k and whatever time you spend on this doesn’t seem like a massive amount. I feel like you took a risk when you had many other things to do and the risk was calculated and overall worth it — even if you got unlucky.

It could be worse. I’ve never lost any sleep because of it. Regulators have the best of intentions in California so far as I can tell, so just a few hoops to jump through.

Is it possible to get the fine covered by malpractice?

Glad you got that sorted out. Lambda school does seem to be "one of the good guys" out there in this market, so I'm glad to see you're taking the steps to keep that reputation.

We’re trying

Good on you, mate; this is just a bump in the road. Keep on giving bootcamps a good name.

Yeah, I also wouldn't want my kids to grow up in a world where someone could exchange knowledge for money without a license, but this is ridiculous.

I do mean this completely naively, as I was not even aware that "exchanging knowledge for money" required a license before this, but why do you feel this way?

I'm so shocked that this isn't simply about certification (aka, you can't give out some sort of officially accepted slip of paper without a license, which I would at least be able to come up with arguments for), that I am really curious as to how this is an issue.

In particular:

1. It seems you can exchange knowledge for money as long as you don't have a physical presence in the state. Do you think this is an unfortunate loophole that in an ideal world would be "fixed"? If I create a new framework or technology and live in Bolivia, do you believe that ideally before I can offer a course on it online that accepts payments I should first be licensed in the state of the person taking the course? Should random people who happen to live in the state have a leg up on me teaching the technology I invented simply since they live there already and it is probably easier/in-their-means to get registered?

2. It doesn't seem to have anything in particular to do with "bad knowledge", as there are plenty of people willing to teach bad things for free (you can define bad however you want here). And separately, as far as I can tell, no one is really checking the courses are good or anything. Using the example above, would California have the capability to know that my React course is up to snuff?

So what is the registration for? Why is the sale of knowledge different than the sale of t-shirts?

1. Is the only goal to have these places on file for easier class-action lawsuits later? That might make sense?

2. Is it because tuition is particularly expensive, so it is known to attract more scams? So, merely a consequential result and not anything inherent to knowledge itself.

3. Is it because this sort of "institution" qualifies for government assisted funding/scholarships? In that case I could certainly understand it.

Any of those reasons could make sense, but none lead me to the feeling that the sale of knowledge, of all things, should of course necessarily be licensed/registered outside any other variables.

Training is different from Knowledge. My understanding is that what is regulated is an institution making promises that they will give you marketable skills against a substantial amount of money. This is regulated because a lot of people get abused in similar situations.

Does Lambda School directly exchange it for money ?

Sorry, I was being sarcastic and I think we're in agreement. I think it's pretty sad that the OP suggested it should be regulated (but I also suspect they only said that because they run a business and can't really say anything political). It's clear from the replies however that many people agree with what he said though.

What do you actually do to find out what the regulations for 50 states are and how to comply? Just hire experts?

Yup. Seems crazy but a lot of people make their living that way.

I work for a DC-based non-profit. As we solicit donations in all 50 states, we have to register in all 50 states and meet their varied paperwork requirements. A small industry has sprung up around non-profit state registrations, and we are happy to outsource to it; we'd never manage it otherwise.

Registrations are one thing, and there are indeed many organizations more than happy to take your money to do a quick registration.

But how are you going to handle the yearly (or more often) tax filings in all these jurisdictions going forward?

> This all happened a long time ago.

The citation date is March 20th of this year, which is only four months ago. When will Lambda School be fully registered with California?

As soon as the BPPE reviews and accepts the application.

Out of curiosity, which state had the 25-pound registration?

EDIT: Whoops sorry, didn't realize my comment was submitted twice.

Shouldn't talk about it yet.

Out of curiosity, which state had the 25-pound registration? And what was the average and minimum you saw?

Don't want to talk about those things just yet.

Not directing this at you, but to all - this is a concrete example of why you shouldn’t blindly trust legal (or medical, or spiritual) advice. Ask questions, make sure you understand, and think critically. No one is infallible.

In some instances, reliance on counsel's opinion can at least be a defense against claims that you intentionally did something wrong.

Reminds me of this story:

https://a16z.com/2014/02/06/why-i-did-not-go-to-jail/

TL;DR, A widely respected CFO makes a suggestion regarding stock and being competitive as far as employee compensation. CFO says that they have done the same thing at numerous companies. The CEO is not very knowledgeable and asks the general council (who unlike a lot of places at the time reports directly to the CEO, not the CFO) to weigh in. General council says don't do it, so they don't. 2 years later, CFO goes to jail, CEO and everyone else stays out of jail because of a good decision.

I would extend your lesson and say to be sure you are asking a lawyer who has knowledge / experience in the area of law you're asking about.

Yes, but it also affirms what the parent was saying: if something doesn't smell right, get a second opinion. In this case, Horowitz got advice that said "do this thing that gives free money, even though no one else does it". That seemed too good to be true, and that's what triggered his insistence that the general counsel look at it.

That's an amazing story. Did PWC's people go to jail as well?

I don't know as I've no specific information on what they actually did.

However, it sounds a bit like backdating stock options type thing, and a fair amount of people went to jail over that across various industries.

A bunch of companies did it simply because they thought it was best practice, not for specifically immoral means. The majority of people who did it accidentally and could prove it with a paper trail of trying to follow auditors best practices got off with fines / warnings, which seems appropriate.

Back dating stock options (i'm still assuming that is what the situation was, I do not know) certainly was commonplace, I don't know how many people really knew the law.

I DO think there is something that should set off someone's spidy sense that "Wait, we're changing the dates on these options that already exist?" or "We're lying about the dates / price these options were really granted at?".

To me at least that raises a lot of questions just changing the date on something financal to say it happened in the past like magic. I'm not a lawyer, but I'd be very nervous about that.

Correct. Live and learn.

I think this is a concrete example of why to blindly trust legal advice.

There are some laws explicitly written to say that ignorance of the law is an excuse. "knowing an willing violation" (I don't know if this is one of them though)

Taking that to the logical extreme of having a legal opinion with every email puts you in a very privileged situation with the state

It exponentially increases the cost of the state to investigate. The state now knows you have a lawyer already, but doesn't know the contents of the advice and doesn't get to use things under attorney-client privilege even if a judge approved a fishing expedition that exposed your digital artifacts. And in the meantime it lowers your compliance burden if the advice says you don't have to comply, depending on how you compensate your lawyer your costs were super low.

If there is potentially criminal liability, but the burden of proof is a knowing and willful violation, then you're practically exempt because of the lawyer on payroll.

So in this case they negotiated the fine and get to improve operations.

Costs of investigating and prosecuting aside, the state likes to see a rationale for compliance. The lawyer also provides that, which you would prefer to have some case law to support it. This doesn't result in sanctioning the lawyer, its just not worth it to the state.

Knowingly and willingly usually refers to the level level of awareness that is required to be held culpable for a crime or violation. If the Lambda school was unaware that they were committing the conduct proscribed by law then they would have a defense (assuming knowingly and willingly was the standard required). However they do not need to be aware that the conduct was proscribed by law, just of the the conduct itself.

I thought lawyers are liable for bad advice?

If that were actually true they’d all go out of business.

They do/should have insurance for this kind of thing.

And usually lawyers are personally liable, so there is no “going out of business” unless they go personally bankrupt.

Dunno how true all of the above is in CA.

Get your own lawyer’s advice :)

Lawyers are liable for professional malpractice; whether particular bad advice is malpractice and whether the other party chooses to pursue it even if it might be are issues which affects whether they are liable for bad advice.

Legal counsel is about risk mitigation: do we fire this person?

The question isn’t whether it’s moral or ethical. It’s what the risk exposure? What are the likely outcomes? Do we have our bases covered?

Fire them! (Or, we can’t, it overexposes us, create a new department, assign them and then dissolve the department some time later and declare them redundant).

I'm not sure what you mean by this. When counsel tell you something is legal, and it isn't, there's little subjectivity.

The law has a few concrete, definitive truths but a huge volume of interpreted and subjective (and contradictory) statutes as well. Otherwise we wouldn't need lawyers in the first place

Exactly this! If the outcome for every case could be known in advance algorithmically or something we wouldn't have lawyers. Since the law is written by people and interpreted by people, it remains blurry when you zoom in close enough to specific unsettled cases.

> When counsel tell you something is legal, and it isn't, there's little subjectivity.

Stating that a thing is or is not legal is making a claim about the opinion other humans in positions of authority (whose specific identity is unknown) will have on a similar question in the future.

There is always subjectivity in it, since you are literally predicting someone else's subjective opinion. The objectivity of law is a conceit, not a reality.

But that’s not entirely a bad thing. It allows for things to change over time. It allows for example for states to crack down on vaccine exemptions and allows for taxation and regulation of interstate commerce, etc.

There is no such thing as “trusting” spiritual advice. By definition, there is no scientific way of confirming whether the advice is good.

But the legal system is so complex, how are you as a laymen suppose to verify it if you are basically the test case for trying something new?

Lambda School is preparing to enter India as well right?

How is it regulated there? better or worse?

Given all the dodgy looking "English School" signs and graffiti I've seen in several Indian cities, I'd guess there's a lot less regulation. That might of course differ for a large foreign company, so I would still be interested in hearing from the OP on this :)

Not necessarily less regulation, but less enforcement for sure.

Are you going/have you registered with the State of California now?

Yup, we've submitted our registration.

Can you go after your old counsel using your new counsel for damages?

I don’t know. If we could it wouldn’t be a good use of time or money.

In the past, I've asked for a 100% refund of fees before filing a complaint with the association and have received back 50%. You may want to go that route.

Literally just one fax. They want to avoid any complaints on their record, especially valid ones.

Put the info in a shoebox and weight the statute of limitations. I've seen a start-up sue its lawyers and sadly that was the main way they generated revenue that quarter.

Of course your choice to make but I would fight them.

What about your experience suggests that regulation is reasonable?

Sue your old counsel? They will probably settle.

The thing about running a startup is you have enough problems to solve you really don't want to create new ones.

It's the job of your attorney. It's possible all it takes is one strongly worded letter and they will settle.

May not be that simple. Attorneys understand the "send a threat letter and hopefully they will settle" model well. Also, their current attorney will probably charge just to send that letter.

> Also, their current attorney will probably charge just to send that letter.

Surely not $75,000 for a letter. A few hundred, yes.

Recouping even $5,000 (in a "f u, go away please" payment) would be a big win for a scrappy startup, no?

Their old law firm probably would prefer not to be drug around town making it known they gave very wrong, and very costly advice. They'd prefer the matter just went away. Those conditions are ripe for a quick settlement.

Giving advice that turned out to be wrong is a long way from proving legal malpractice.

Otherwise you could sue your lawyer every time you lost a case.

No, but if you are a law firm with a reputation for giving wrong legal advice, you're going to have a harder time getting customers.

Thanks for your continued transparency dude.

Glad you got it sorted out!

How hard is it to register and what exactlty are the requirements or rules you must follow?

I would be an even bigger fan of Lambda if you guys fought this or left CA all together.

I think they're in the business of teaching people, not fighting anti-government crusades.

It sounds like you're unfamiliar with the Higher Education Bubble and it's root causes.

Not intimately, but this is good work: https://marginalrevolution.com/marginalrevolution/2019/05/wh...

Big props to the author too, who leans pretty libertarian-ish, for following the data where it leads, rather than trying to make it fit his ideas.

Not the hill I want to die on

But why? It's not California's fault that these guys got themselves bad legal counsel.

Why?