For the entrepreneur, the idea of hiring a lawyer can be a daunting one – particularly if it’s your first time. It’s often because of this that legal advisers remain a largely untapped resource for entrepreneurs and small businesses. But lawyers are often much more creative than you might think! Many of them have more in common with an entrepreneur than they do with an accountant or a doctor, and their skill sets are more aligned to boot.
So how do you know how to choose the right startup lawyer?
New and small business leaders spend much of their time thinking creatively and planning. They spend hours and hours on their idea, the positioning of the company in the market, branding, testing the concept, e-commerce, competitors, the goals of the business, and then condense those and other areas of thought into a global plan. Very few, however, spend much time seeking advice from lawyers, unless they absolutely have to do so. After all, lawyers are expensive right? Costs need to be saved, so why would you waste too much money on a lawyer until your turnover is at least £5m? But this may be short sighted. Lawyers don’t have to cost the earth if you approach your relationship with them in the right way, and they may even want to help you get to that first round of funding more quickly. It’s certainly in their interest to do so, and some of them enjoy the challenge
It is not true to say that lawyers are always expensive. Of course legal spend often rises once a business starts to develop. However, the vast majority of commercially-minded lawyers, with whom you may have a kindred spirit. They understand there is very little or no money to spare for legal expenses in the setup stage, and budgets to comply with thereafter. Indeed, as a business develops the need for a lawyer grows, and any lawyer with an eye for a scalable and new business idea knows that.
So which lawyer or law firm do you choose? The guy at the big law firm that will offer you a decent deal on fees in return for his usually expensive expertise? The 3 partner firm that doesn’t charge much anyway? The truth probably lies somewhere in-between. Big law firms will probably not dedicate their time to you – they have unfortunately large billing targets to meet. They are also not as conversant with the issues you face on a day to day basis – most of their clients will be blue chip. Although some of tare very resources to tap into from time to time, your average small firm will simply not have the skill set to assist a developing business in the medium term – and you need a close relationship with one lawyer really, not several, to get the most from your lawyer. Most firms with 25 partners or more will have enough expertise to assist a business until and after the first round of funding.
But its the person behind the lawyer that should remain a focus. Do you understand and like each other? If not, why bother? Having a rapport will help when you simply need help to assess a document quickly without paying a bill. It also makes for relationship longevity.
Find a lawyer who you think truly understands you and your business, not just someone that comes recommended.
The law surrounds us and, at times, can thwart the most protected and well thought out business idea. But it can also provide a positive edge when preparing your strategy. Here are some of the areas that you will need to consider with your lawyer even in the embryonic stages of business development:
- The law can help shape your idea – it’s very difficult to protect a product from being copied, but logos, and copyrights can be protected. Indeed, if your product or service is linked to a geographical area lawyers can often assist you in obtaining a foothold in that area (finding the right deal on the lease in a central business district is best done in conjunction with a lawyer, not just an agent, for example).
- The law can protect you from unmotivated or self-centered employees, but also help you find a motivated employee. For the most part people don’t think about employees as being problems when they first start taking them on. But if the employee doesn’t perform what happens then? You need a decent employment contract, and a decent employment law specialist. Besides, if you send a no holds barred employment contract to someone to sign and the outset, and they query its detail too much – are they the employee for you? Shouldn’t they want to sign it come what may?
- Funding is essential at some stage, and very few businesses simply borrow money from a bank to grow. So you might issue a small amount of share capital to a friend to get going, or larger amounts to venture capitalists, or you might opt for crowd funding. Controlling your company is essential at all times and issuing shares in this way needs to be monitored closely, by your lawyer. He will advise you on the legal ramifications for giving away various percentages of your company. All those percentages have very different meanings to a lawyer, they may not do to you. Find out what they are and consult a lawyer before taking the next step.
- What about competitors? Do you need to take something from them as well as being guarded about them taking something from you? Are you going to shadow their idea until kicking off your own marketing drive or product that differentiates you from the rest of the field? Have you considered whether you might be in breach of copyright?
There is a never-ending list of issues that a business may need legal help with because the law is far reaching and continually evolving. Seeking help from the right lawyer and developing a close relationship over time could be the difference between your business success or failure.
And you never know, you might meet a kindred spirit along the way!