Going through the startup steps. Next step: the lawyers!
April 15, 2009 10:06 AM
I need advice on lawyer(s) for a startup venture.
I'm part of a small, bootstrapped (e.g. self-funded) software company that's already seen a fantastic level of success given how tiny we are. Success = paying the bills, big potential on the horizon.
To date, we've done the legal stuff (e.g. forming the business, contracts) ourselves. The stakes haven't been gigantic, so it hasn't been a problem. That's starting to change.
Looking to the next 3-6 months, we're going to need some real legal help covering contracts (both business and employment), licensing, and patents. While both of us know lawyers personally, none of the people we know can really help us directly. The feedback I have received to date points us towards finding a firm that can offer different lawyers who specialize in the various fields we need help in.
We're a little reluctant to head that way - a full-service firm is likely going to see us as a small client, and therefore low-priority (while they will be extremely expensive). We'd love to find someone who could work more closely with us, handle the general work, and lead-block for us on the more specialized stuff. Are we being naive in hoping we can find such a person?
FWIW, we're in New York City. Not a requirement that the lawyer is in NYC, however.
Would love advice & suggestions from anyone who's been through this process before.
Thank you.
I'm part of a small, bootstrapped (e.g. self-funded) software company that's already seen a fantastic level of success given how tiny we are. Success = paying the bills, big potential on the horizon.
To date, we've done the legal stuff (e.g. forming the business, contracts) ourselves. The stakes haven't been gigantic, so it hasn't been a problem. That's starting to change.
Looking to the next 3-6 months, we're going to need some real legal help covering contracts (both business and employment), licensing, and patents. While both of us know lawyers personally, none of the people we know can really help us directly. The feedback I have received to date points us towards finding a firm that can offer different lawyers who specialize in the various fields we need help in.
We're a little reluctant to head that way - a full-service firm is likely going to see us as a small client, and therefore low-priority (while they will be extremely expensive). We'd love to find someone who could work more closely with us, handle the general work, and lead-block for us on the more specialized stuff. Are we being naive in hoping we can find such a person?
FWIW, we're in New York City. Not a requirement that the lawyer is in NYC, however.
Would love advice & suggestions from anyone who's been through this process before.
Thank you.
To actually answer your direct question, have you considered Axiom Legal? They are basically made for this situation, but you have to do a certain volume of business before they'll pick you up. I have some other personal recs that I can give you, but you've no email in your profile, hit me up if interested.
Here's another tip about startups and Big Law though: set up a meeting with somebody in the startups practice at all the big shops that have NYC offices and do startup stuff: Wilson, Cooley, Orrick, etc. Basically the west coast firms. Tell them you need lawyers. Go sit with the lawyer for an hour and discuss your situation. He'll tell you all kinds of crap for an hour. Thats worth like $700. Then, go to the next meeting. You'll know that much more about your situation so you'll ask better questions. After like five of these meetings, you'll have a good sense of (a) what the lay of the land is and (b) who you like/gets your business.
IME though the big firm with you guys will see you as a small client and do sloppy work as a result, and charge through the ass (although all those fees are heavily negotiable). Associates will pull up the last closest contract they did to the one they need for you and do a Find-Replace to swap your name in for the old name. But then they won't proofread it and there will be errors all over the place.
Anyway, I would do the meetings with the big firms, its free and you'll learn a lot. I can think of one actual non-biglaw lawyer who might be a good fit for you, ping me by email if you want the contact details. Can't hurt to call Axiom either.
posted by jeb at 10:31 AM on April 15, 2009
Here's another tip about startups and Big Law though: set up a meeting with somebody in the startups practice at all the big shops that have NYC offices and do startup stuff: Wilson, Cooley, Orrick, etc. Basically the west coast firms. Tell them you need lawyers. Go sit with the lawyer for an hour and discuss your situation. He'll tell you all kinds of crap for an hour. Thats worth like $700. Then, go to the next meeting. You'll know that much more about your situation so you'll ask better questions. After like five of these meetings, you'll have a good sense of (a) what the lay of the land is and (b) who you like/gets your business.
IME though the big firm with you guys will see you as a small client and do sloppy work as a result, and charge through the ass (although all those fees are heavily negotiable). Associates will pull up the last closest contract they did to the one they need for you and do a Find-Replace to swap your name in for the old name. But then they won't proofread it and there will be errors all over the place.
Anyway, I would do the meetings with the big firms, its free and you'll learn a lot. I can think of one actual non-biglaw lawyer who might be a good fit for you, ping me by email if you want the contact details. Can't hurt to call Axiom either.
posted by jeb at 10:31 AM on April 15, 2009
I agree that what you want is a mid-sized full service firm. You may be able to save considerable money by using a mid-sized full service firm in a mid-market city, assuming you don't mind operating mostly by phone/email/etc. I am insulted by the insinuation above that attorneys at large firms will do sloppy work for you because you're small. That is not universally true, or in my experience even a little bit true. Partly because you might be small now, but that doesn't mean you'll always be, and lawyers are customer service providers -- or at least they should be. Anyway, consider getting some rate quotes/bids from outside NYC just for comparison.
posted by dpx.mfx at 10:37 AM on April 15, 2009
posted by dpx.mfx at 10:37 AM on April 15, 2009
When my wife and I were going through the exact stage you are going through now I asked lawyer friends of mine for recommendations. Usually, despite living in DC where I've heard 1/6 people are lawyers, this proves fruitless, but one friend at a relatively large firm recommended some lawyers at a smaller firm that they farm some work off too.
The smaller firm was glad to have the work and my friend recognized that the smaller firm was, in his words, "in it for the long haul." In other words, they wanted our little business now and would give us all attention due to our business so that we would remain clients for a long time. We are continuing to use them because of this and they are getting more and more business as a result. We're even going to use their lawyers for estate planning and other lawyer stuff we need.
One word of caution. Whenever you are talking with your lawyer and you say you have a question about something, be sure to let them know if you want them to look into it or not. If it's not that important, make sure that is clear. I'm not complaining because I did ask our lawyers some questions and asked for an answer, but I wasn't thinking clearly that they charge for their time and finding out the answer to those questions wasn't worth 300 bucks to me.
So ask for recommendations from your lawyer friends for firms like this. One last caveat. Meet with any lawyers to get a feel for how they like to work. I love it that our main lawyer talks really fast and is really quick. Not everyone wants to work at that speed, but I really appreciate it. So go see if they mesh well with you.
posted by battlecj at 12:42 PM on April 15, 2009
The smaller firm was glad to have the work and my friend recognized that the smaller firm was, in his words, "in it for the long haul." In other words, they wanted our little business now and would give us all attention due to our business so that we would remain clients for a long time. We are continuing to use them because of this and they are getting more and more business as a result. We're even going to use their lawyers for estate planning and other lawyer stuff we need.
One word of caution. Whenever you are talking with your lawyer and you say you have a question about something, be sure to let them know if you want them to look into it or not. If it's not that important, make sure that is clear. I'm not complaining because I did ask our lawyers some questions and asked for an answer, but I wasn't thinking clearly that they charge for their time and finding out the answer to those questions wasn't worth 300 bucks to me.
So ask for recommendations from your lawyer friends for firms like this. One last caveat. Meet with any lawyers to get a feel for how they like to work. I love it that our main lawyer talks really fast and is really quick. Not everyone wants to work at that speed, but I really appreciate it. So go see if they mesh well with you.
posted by battlecj at 12:42 PM on April 15, 2009
Hmmm ... you need me ;-)
Or someone like me. I am currently working as part time internal legal counsel for two startups and one pre-startup. Neither needed a full time lawyer as staff, nor needed to go to their local law firm for every little contract or advice. Specialist work still gets sent out to a law firm, but I (a lawyer) send it out and manage the external lawyer (that ensures value for money!).
I have some equity in all the companies ...so I am in it for the long haul (and I don't write time for every call or charge for every photocopy) ... and if there is an emergency with one company I can juggle my workload with the other companies to deal with it
The relationship is good for everyone involved. Not sure where you will find one, though (and it is a shame you are 6 time zones behind me)
posted by jannw at 1:43 PM on April 15, 2009
Or someone like me. I am currently working as part time internal legal counsel for two startups and one pre-startup. Neither needed a full time lawyer as staff, nor needed to go to their local law firm for every little contract or advice. Specialist work still gets sent out to a law firm, but I (a lawyer) send it out and manage the external lawyer (that ensures value for money!).
I have some equity in all the companies ...so I am in it for the long haul (and I don't write time for every call or charge for every photocopy) ... and if there is an emergency with one company I can juggle my workload with the other companies to deal with it
The relationship is good for everyone involved. Not sure where you will find one, though (and it is a shame you are 6 time zones behind me)
posted by jannw at 1:43 PM on April 15, 2009
I am insulted by the insinuation above that attorneys at large firms will do sloppy work for you because you're small. That is not universally true, or in my experience even a little bit true.
@dpx.mfx fair enough, but this was exactly my experience with a big firm. It seemed like at some point, they were like "Awesome! Growing startup!" and the partners wanted to talk to us and the firm wanted to be paid partially in equity. Then at some point we were not the hot thing and the work we got back from them was absurdly sloppy. Maybe it was just a few bad associates. I mean ridiculous obvious find-replace errors. It really undermines your confidence in the law firm too because you're like "all you guys do is nitpick over documents, normally I'd forgive something like this but this is what I'm paying you for!"
Oddly, I was just talking about this with a friend who was an attorney at another huge firm last Friday. She said that in situations like mine, it was totally routine to farm it off to junior people and do hack/rush jobs, but that like...the failure to proofread and catch obvious errors struck her as extreme. So, yeah, maybe it was a couple bad associates. But its not like this happened one time. It happened routinely.
posted by jeb at 5:04 PM on April 15, 2009
@dpx.mfx fair enough, but this was exactly my experience with a big firm. It seemed like at some point, they were like "Awesome! Growing startup!" and the partners wanted to talk to us and the firm wanted to be paid partially in equity. Then at some point we were not the hot thing and the work we got back from them was absurdly sloppy. Maybe it was just a few bad associates. I mean ridiculous obvious find-replace errors. It really undermines your confidence in the law firm too because you're like "all you guys do is nitpick over documents, normally I'd forgive something like this but this is what I'm paying you for!"
Oddly, I was just talking about this with a friend who was an attorney at another huge firm last Friday. She said that in situations like mine, it was totally routine to farm it off to junior people and do hack/rush jobs, but that like...the failure to proofread and catch obvious errors struck her as extreme. So, yeah, maybe it was a couple bad associates. But its not like this happened one time. It happened routinely.
posted by jeb at 5:04 PM on April 15, 2009
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Check Martendale to search for such a firm. I found 14 peer-reviewed firms who describe themselves as having a general corporate practice who have between 55-99 attorneys located in New York City. Feel free to adjust your search as you think appropriate. It's actually a decently powerful engine.
The smaller the firm, the more likely you'll have actual partners working on your case, but go too small and they might not be able to get everything done that you need to when you need it. Also, the smaller the firm, the more you're going to be able to negotiate in terms of retainer and fee. Shop around a bit and you should be able to find someone who meets your needs almost exactly.
posted by valkyryn at 10:27 AM on April 15, 2009