CIP-37: Legal Expense of 2 ETH for LexDAO RealAssetsDAO review of LLC Operating Agreement draft, and future work

There’s a draft LLC Operating Agreement for CityDAO LLC and I think it would be valuable to get feedback on it from a few members of LexDAO who participate in the weekly RealAssetsDAO call, specifically James McCall, esq. ( josephit#2845) and Nick Rishwain, esq. (nickjrishwain#1253).

These guys have thought a lot about what should go in an Operating Agreement that owns real estate and is governed by tokens. Here’s a blog post from James on this topic.

I propose 2 ETH be paid to RealAssetsDAO’s Gnosis Safe (I am on this multi-sig) and I will get James, Nick, and other members of LexDAO RealAssetsDAO to provide a redline with comments and their written opinion about how to improve the draft CityDAO LLC Operating Agreement.

I think that amount should not only cover the scope of work I’ve described but future work around legal structuring. CityDAO would be the first to fund this RealAssetsDAO and that would surely engender good will in the relationship.

Hit me up with comments, questions, concerns, etc.

2 ETH is nearly $6,000. We have already been paying our General Counsel for his advice on this operating agreement and have gone through it together with the core team.

While I think it’s good for CityDAO to cultivate a relationship with LexDAO, I feel like this request lacks specificity on how many people would be contracted, what their billable hours are, how much time they would expect to spend on this project, and, most importantly, why they feel, in their professional legal opinions, that the operating agreement in its current form requires immediate and significant changes.

Also, it would be preferable if new outside legal consultants would be willing to work with the current General Counsel so there’s a more consistent opinion being put forth.

@Da3vid is there a CIP that states that @ethlaw is CityDAO’s or CityDAO LLC’s General Counsel?

There are standards for inside counsel, General Counsel, and outside counsel. General Counsel is typically “in house”. Generally what you want is an in house lawyer with duties exclusively to the company. Outside counsel has different duties to third parties, malpractice insurance, and has its own interests.

CityDAO does need a General Counsel, someone who’s job it is to protect the best interests of CityDAO, and I think the Legal Guild would be that General Counsel’s office. I don’t think there’s currently a General Counsel for CityDAO or CityDAO LLC.

DAOvolution happens to work as an Associate General Counsel as his day job and he would understand this matter better than I.

I put forward my redline February 14th, 2022, I distributed it, and participated in a call to argue on why I think (in my opinion as a lay person) the Operating Agreement for CityDAO LLC needs changes that are significant.

I think RealAssetsDAO would pay attention to this matter for $5K but everyone’s time (everyone doing legit work in crypto) has a big opportunity cost. There are four lawyers who regularly participate in LexDAO’s RealAssetsDAO weekly calls, plus my time.

LexDAO RealAssetDAO can provide a formal proposal letter to address these very reasonable concerns.