There is an important, yet sometimes overlooked (and sometimes overcooked), decision in the life of an early-stage venture: getting a good attorney. First and foremost, it is important to understand that although not all firms and attorneys are created equal, most corporate attorneys can do an adequate job of getting you incorporated and documented well enough to open up shop.
However, if you are working within a specialized field (i.e. software, life sciences, etc.), the game changes a bit. Some firms are actually more geared towards supporting start-ups. In fact, some attorneys, including friends at firms like Morris Manning & Martin and DLA Piper, in addition to some sole practitioners, can speed you through the necessary documentation so you can work on building your company.
And, we know this is important because the more time you spend thinking about whom to work with on your legal documents, the less time you'll be spending on building your product or service.
Hence, I've got three simple thoughts for selecting legal counsel:
- Time Is Money – All firms can set up a corporation, stock option plans, etc., so don't invest too much time trying to price shop between firms. I've seen some people pay a lot for their initial setup, but you should be able to get a start-up kit between $4-8k – depending on the size of the firm you select and what all they bundle in the kit. A firm that's looking to get all they can from you day one is probably the wrong firm, but someone that makes the effort and is willing to work with you on counsel as well as pricing is essential.
- Get Buy-In – Select an attorney that you enjoy spending time and someone that will understand your business enough to refer you to qualified customers/investors. Doing the legal work should be fairly trivial in the early stages of your company, but an attorney can differentiate themselves if they can get engaged in your business and know your company well enough to provide added value. Great lawyers are constantly thinking about their clients and will almost serve as an added business development head. Keep in mind that a good lawyer will benefit from the long term success of your company by farming more work as you grow.
- Know Yourself – What kind of client will you be? Do you call for every little thing or can you meet with your attorney less frequently and get things knocked out quickly? This is important! Lawyers have many clients and the best customers are the ones who know how to manage themselves and make efficient use of everyone's time. Just because you get a deal on your documents and you have someone willing to provide legal advice does not necessarily mean you need to call each time something pops up. Entrepreneurs should take the time to understand legal issues beyond a cursory level and bring in legal counsel when action needs to be taken. It will save you time and money as most issues will appear again in some form or fashion down the road.
A Checklist of Basic Legal Actions for Startups
Choosing an Attorney (pdf)
Online legal information: Findlaw and Nolo
If you have any specific questions, feel free to leave a comment and we'll be more than happy to direct you.