I like my clutches to engage as far out as possible, while still having enough free play to avoid causing the clutch to slip. I usually adjust the clutch free play to about 1/8" between the lever and the perch. To me, the more space between the engagement point and having the lever pulled in the better. It means the lever has to move more before it starts to engage, which helps ensure complete disengagement when pulled all the way in. I have large hands, so that is not an issue. I have had problems with hydraulic clutches, especially on my former '85 Goldwing, that started to engage with the lever 1/2" away from the grip, which means it was never completely disengaged. Shifting was very notchy. And there were no adjustments.