Quite often people come to us and say something like "we have an idea, which we may be interested in having you develop, but we cannot discuss it with you unless you first sign an NDA". There are circumstances in which NDAs are appropriate, but for us this question is often a red flag.
We usually provide free consultations to potential clients. In these we determine whether your website/app/whatever is a good idea, whether we would be the right people to make it for you, and what it would cost to make your vision a reality. We have a great deal of experience and can often add useful insights into how best to proceed, even when that means not proceeding with us. We have plenty to do and will not take on projects if we suspect we cannot provide our clients with an excellent ROI. Consultation and quotation can take a lot of time and effort and it is not something we usually charge for.
However, in situations where someone is looking for a quote for development work but requires an NDA before discussion, we charge a flat fee of £200 to look over it and decide whether we are willing to sign. This fee does not guarantee we will sign. It is what we charge to decide whether we can sign (and to provide suggested modifications where appropriate).
There are two reasons why we do this.
The first is that before signing a legal document, we need to make sure it is fair and reasonable. It takes time and legal expertise to properly do this and it's not much fun, so we charge for our time.
The more important reason is that it filters out a lot of people that we would not want to work with.
People who think that ideas alone are valuable. The most common type of person who proposes an NDA is someone with a brand new start-up idea. As a novice they are eager to appear professional and often they have been advised by other people with no real experience that they should get an NDA to stop their ideas being stolen. Perhaps they watched The Social Network and are afraid of getting Zuckerberged. We can understand why people would initially think NDAs are a good idea because there is a lot of bad advice out there, which is why we took the time to write this post.
In our experience, an idea before implementation is roughly equivalent to deciding that there is a specific mountain you want to climb. Implementing the idea successfully means climbing the mountain. Most of the time, when someone is worried about someone else 'stealing' their idea, it is equivalent to worrying about someone else trying to climb the same mountain that you had set your sights on. The experience of the Winklevoss twins is an example of this rather than a counter-example. Myspace existed before they proposed making a social network at Harvard, so it's hard to see exactly what an NDA could have possibly protected. My favourite line from that movie was "If you guys were the inventors of Facebook, you'd have invented Facebook". The kind of people capable of climbing mountains are not interested in your ideas about which mountain to climb or how.
People with no money. If it's genuinely important for you that we sign your NDA but the fee is unaffordable, then you probably cannot afford our services. As software developers, we often get presented with proposals which go "I have a great idea, but no money. Why don't you do a ton of work for no pay and when it makes a lot of money, we'll all be rich". Sorry, we're not interested, and it's best you don't even tell us your idea so that you don't think we stole it if we end up implementing something vaguely similar.
People who are excessively litigious. It's not a good sign for us if people's first instinct is to force us to sign legal documents before they will even talk. We have no interest whatsoever in stealing your idea, but neither do we want to open ourselves up to spurious lawsuits alleging that we stole an idea if we end up implementing something similar for someone else.
People who want something for nothing. People come to us, not the other way round. We are prepared to spend time and effort analysing how best to make your wishes a reality without charging a penny. However, if you want to make us sign legal documents before we do this for you, then we do need to charge for the time it takes to figure out whether they make sense. If that is unacceptable then you are welcome to go elsewhere.