One of most important and fundamental necessities business leaders face is finding reliable and trustworthy legal counsel.
This can be particularly challenging for start-ups who have limited resources and knowledge of what legal options are at their disposal, and which are appropriate for their early needs.
Here we summarize some of the important requirements founders should consider when determining legal counsel:
Areas of Legal Savings:
The following 3 points offer ways founders can save money when figuring out their legal needs with limited available resources:
1. Minimum Viable Legal Protection.
Try to avoid the services of attorneys and legal counsel whenever reasonably possible. Take advantage of publicly available and standardized forms, automatic document assemblers, and the vast variety of legal advice offered across the web.
2. Alternative Fee Arrangements.
Many lawyers bill by the hour, but it can be worth inquiring about alternative payment arrangements including; fixed fees which typically give lawyers incentive to be efficient, deferred fees, and possibly equity in your company, which can be appropriate when a strong personal relationship and trust is established.
3. Outsourced General Counsel.
This can be appropriate for small companies and can be similar to having a part-time in-house attorney or retainer. Many firms, online included, for instance Avvo, Rocket Lawyer and LegalZoom, offer varying flexible counsel with predetermined pricing.
Included in many online incorporation and business formation services, like LegalZoom are libraries of legal document templates with corresponding guides.
These can be great resources for entrepreneurs to gain perspective on a wide variety of legal forms entrepreneurs are likely to need at some point.
Entrepreneurs should be confident when asking questions and negotiating with legal advisors. After all, it is important to recognize that the Legal industry operates heavily on recommendation and testimonials of clients.
When determining the right legal counsel among your available options consider the following 7 characteristics. Weigh them, in an analysis and then pick the legal option that fulfills the greatest number of listed criteria.
Reputation in your industry & of the start-up environment.
Understanding of your business model and objectives.
Ability to communicate & simplify complex legal jargon.
Their convenience and commitment to helping you.
The chemistry and attitude they build with you.
Similar clients and case experience.
7. Reasonable Cost.
The range of fees for their time and services.
Taking the time to adequately review your options, and the degree of flexibility you have to take advantage of them, is essential for getting the services you require and avoiding future legal and business problems.
Conflicts can and will likely arise from outside and/or within your business.
Having the right form of legal counsel, and a good relationship with the legal representation can save entrepreneurs and their business enormous amounts of money and precious time.
The worst scenario a early-stage company can put itself in is any form of a lawsuit.
Lawsuits drain resources, produce conflict among the businesses members, and can prevent the company from securing much needed resources including; capital, mentorship, industry connections, and potential business partners.
All entrepreneurs should take their legal requirements seriously, and take the time to fully understand and review their options!
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