Starting a new business is exciting. Founders often have a mental image of how they imagine their new company will be: the new Google. But before they can create a new verb, they first need to make sure that they have the best corporate setup, have raised adequate funding, have commercial contracts to protect their interests, and that their intellectual property, including patents and trademarks, are protected. When starting off, the best partner for a startup is a specialized startup law firm. To choose the right one for their startup, business owners need to evaluate their needs as well as the abilities and experience of the startup law firm. We have identified seven key questions that startup business owners need to ask before hiring a startup firm. These should help business owners choose the law firm that is best suited for their needs.
1. Do You Have Experience With Startups?
The most important question to ask a startup law firm is whether they have wide experience with startups, preferably in the industry your business is. We’ve all heard stories about startups using attorneys who don’t really understand the legal issues most startups face and making costly mistakes along the way. Startup firms require specialized expertise in areas such as company formation, intellectual property protection, commercial contracts, fundraising, employment law, data privacy, and corporate governance, to name a few. An experienced startup law firm also knows about the cost constraints that many startups face. They will tailor their services to the startup’s specific needs without offering more services than the startup actually needs. Finally, a law firm should offer a whole array of legal services necessary for a startup. They need to understand how best to help startups through the legal minefield they face as they grow. Thus, it’s crucial that founders hire experienced startup specialists to counsel their businesses and help them scale.
2. Are You Reliable?
Finding a knowledgeable attorney is half the battle. The other half is finding one you can count on. Communication styles and tools vary, depending on people’s personality and affinity with technology. For example, emails and phone calls may be better for founders who wish to primarily focus on their business and deal with communication at your own pace. No matter what means of communication you prefer, though, transparency and honesty are key. A reliable lawyer is also a good listener. Your lawyer should understand your goals and respond to your concerns. And they should be transparent and upfront about fees.
3. Who Will Be My Primary Point Of Contact?
It is good to know beforehand who you will be working with. The optimal arrangement is to have a specific point of contact within the law firm that will be dedicated to your business. Your point of contact will manage the relationship and be familiarized with your line of work and the intricacies of your startup. Your dedicated lawyer will be the one you’ll be in touch with whenever you have a question, for day-to-day communication, or when you need some paperwork done. At the same time, it’s good if your attorney is part of a team who can help you in the event your point of contact is out of the office. Ideally, your dedicated lawyer will be surrounded by specialist lawyers, who will be able to offer additional services if a specific legal issue occurs.
4. Are We a Good Fit?
Once you’ve been assigned a dedicated lawyer, ask yourself whether you are a good fit. Just like any other partnership, you need to be on the same page with your legal counsel. You need to understand each other, how you work, and how you communicate. Your startup lawyer should be approachable and accessible and, of course, knowledgeable in your industry and line of work. A good fit means you will feel secure in the knowledge that a person who understands you is responsible for your legal business affairs.
5. What Are Your Billing Methods?
A crucial question that matters to all startups is how they will be billed. Most startups start with a limited budget, at least until they find proper financing. They will need to know beforehand how they will be billed and what billing methods the law firm offers. Perhaps some aspects will be billed hourly while others can be billed as part of a flat-fee package. In any case, you need to know how much you will be expected to pay for the legal services you require. Startups should value price certainty and flexibility when it comes to legal fees. Similarly, discuss your future legal needs, in terms of their cost. For example, as a business grows, it may require more robust commercial contract employee onboarding support. Discuss whether it’s better to have a monthly package that will cover all your needs or if it makes more sense financially for you to be billed whenever the need for a specific service occurs.
6. Client Referrals
Client referrals are the best way to gauge the value of a legal firm. Just like you check Yelp and Tripadvisor before going on holidays, client referrals will give you an idea about what it feels like to work with a particular law firm. Client referrals are particularly helpful if they originate from a business in your industry. Industries vary in their legal needs. Knowing that a business with a similar line of work has worked successfully with a law firm is especially helpful.
7. Can Your Law Firm Manage Slow Times and High Times?
A startup will have slow times in the beginning, but high times once it becomes established and increases its revenue. A law firm should be able to deal with both situations equally well. Slow times will require less attention while peak times may demand closer and constant communication, faster delivery times, and specialized services. Make sure that your startup lawyer will have the time, attention, and focus to deal with your business when your company takes off.
Finding a Startup Lawyer
Choosing the right startup firm is crucial for your business formation and growth. SPZ is here to help you grow your business, protect your valuable IP, and position your company to raise outside investor funding.