Founding a company
This can be a complex endeavor with plenty of pitfalls for those with little experience leading a company. One of the best moves you can make early on in this journey is finding a competent and qualified startup attorney to represent your interests and help your company grow at every stage. There are many options when you start looking for the right attorney. There are independent practitioners, small boutique firms, regional firms, and large, national, or international firms.
Regardless of your preference, you will want good legal counsel who has experience navigating the hurdles that many startups face, including raising operating or venture capital. While some tasks are easy to handle early on, such as incorporation, other matters may require legal guidance, including:
- Compensation and employment policies
- Contracts
- Regulatory issues
- Expansion, including multi-state and international growth
- Equity strategies
- Term sheet negotiation
- Licensing
- IP strategies
- Patents and copyrights
- Intellectual property
And these are just a few of the issues that may require legal guidance. The specific assistance your company may require often depends on your location and industry. No matter what, it is advisable to speak with multiple attorneys or firms to understand your different options for legal representation. During these conversations, you can determine how well each attorney may meet your needs. They also have the opportunity to determine whether your company is a good fit for their legal expertise. Some key considerations that should be addressed during your initial meetings include experience working with startups, logistical and practical concerns, and the firm’s culture.
Experience Working with Startups
While it is tempting to think that any startup attorney is sufficient for your needs, startups often face unique concerns and challenges. Choosing legal representation with experience working with startups – and even better, startups in your industry – is imperative. These firms or attorneys can often provide expert guidance in managing many of the hurdles that startups face at different points in their growth cycle. For instance, intellectual property concerns may emerge early, whereas regulatory issues and national or international expansion issues might not come up for years or decades after the company was started. An experienced firm can serve as a one-stop shop for all these issues as they arise.
As a note of caution, you should be concerned about lawyers and firms with little experience with startups. These entities may not understand the challenges and financial constraints that many startups face. A few key questions you can ask to assess experience include:
- How much experience does the company, and its attorneys have with startups?
- How many startup clients do they currently have?
- What type of legal work does the firm take on for these clients?
- Has the firm handled any startup financing endeavors recently?
- Does the firm have experience working directly within your industry? This question is especially important for companies in heavily regulated industries, such as finance and health.
- What is the firm’s capacity to support your company’s growth? If not, you will have to address the fact that your company may outgrow its representation.
- Are there specialists within the firm? If you encounter a particular challenge, will you have access to these specialists?
These questions are just a few examples to kick-start a conversation with legal firms that will help you understand their level of experience in dealing with startups.
Logistical and Practical Concerns
When determining the right legal representation for your company, you need to also understand the practical concerns related to day-to-day operations and legal issues. Getting information related to billable rates for various tasks and understanding who will be working on your issues is important. A junior associate will bill at a rate less than a partner. And this concern is often very important to startups with many financial constraints.
To help you understand what this structure may look like with any given option, you can ask questions such as:
- Who is the primary point of contact for my company?
- What does the fee structure look like for different legal issues?
- How does the firm direct questions so that they get to the right team member?
- What happens when you need a legal specialist, such as a patent attorney?
These questions can give you a bit of an idea of what to expect from each option when it comes to day-to-day operations.
Culture
The culture of a law firm is not generally a primary consideration for many companies, but it should be – and especially for startups. Startups face a wide variety of issues, and it is important to understand whether your company will be able to rely on the collective knowledge and experience of all team members on staff. In firms with a team culture, this is often common practice. At other firms, you may not be able to expect this type of collaboration.
Understanding a firm’s culture can be difficult. It is even harder when the firm is small. However, you can ask the firm to provide information about its culture and how it has benefited clients in the past. You may request that they get specific while providing these examples.
Choosing the Right Attorney
As a business founder, you have many important decisions to make. And many of these decisions can have a long-term impact on your company’s ability to grow and succeed. A great legal team can provide you with the right level of assistance at every step in this journey. You will be working closely with this individual or team through many chaotic and exciting (and sometimes difficult) times. It is crucial that you have faith and confidence in your representation. It will make all the difference in the world.