By Kathryn Keefer
As discussed in the previous post, an attorney experienced with start-up work is crucial to meet your company's early needs. Start-ups are unique businesses that require specialized knowledge of a wide variety of legal issues. Let's explore what to look for when hiring the start-up attorney.
While it is important to keep in mind your start-up's budget and the cost of an attorney, cost should not be the only factor that determines who the company retains. In fact, trying to save money on legal representation could cost you much more if a regulatory, contractual, or intellectual property issue is missed.
Carefully evaluate the qualities of an attorney before hiring them. Attorneys working with start-ups must be communicative, proactive, and strategic thinkers. If a lawyer’s legal approach to a start-up does not match the founder’s vision, there may be internal issues that serve as a detriment to the business.
Just as important as understanding the expertise and qualities of an attorney, it is essential to determine how well a start-up team collaborates with a potential attorney. Personal chemistry between the start-up’s founders and their attorney is significant in maintaining the relationship and receiving the best legal support for a specific type of company.
Asking the right questions can lead you to the right attorney. Some key questions to ask include:
• How much and what type of experience do you have working with start-up businesses?
The answer to this question should inform not just the length of their practice, but the specific areas of law that they have advised, such as contracts, regulatory, intellectual property, employment, general business law, etc.
• How much experience do you have working in your start-up's particular industry?
For example, if your startup is in a highly regulated space, such as MedTech or FinTech, it is important to know that your start-up counsel can guide you through the regulatory process.
• Do you currently represent any competitors to this start-up?
There may be a limited number of attorneys with expertise and experience in a specific industry so conflicts of interest can arise. There are ways for attorneys to minimize the risk of conflicts and are required to have internal systems to prevent conflicts. Don't be afraid to ask for clarity on how an attorney addresses potential conflicts.
• Do you proactively engage with your client’s businesses or do you only react to problems as they arise?
It is essential to understand the attorney's communication style and frequency. Make sure to articulate your own needs with the understanding of the costs. If you are a novice founder, the attorney may need to be more involved in the day-to-day business.
• What is your rate and how do you bill your clients?
Some legal work makes sense on a flat fee basis, such as completing the paperwork to incorporate your company, while other work might require hourly rates, such as negotiating a complex intellectual property ownership arrangement. It is essential that you understand the potential fees up front.
The more you can learn about a potential attorney, the more likely the partnership will succeed. Going into a legal partnership blindly rarely works out, so it is crucial to ask for information beyond the key questions.