Startups and founders are faced with countless challenges and decisions on a daily basis. Many might be small challenges that can be solved personally but there are always larger decisions and challenges looming that require the help of a lawyer or law firm.
In order to better help you choose the right law firm for your startup, we put together some tips, advice, and a few actual firms dedicated to helping startups below.
As always, we recommend speaking with your peers, mentors, board members, general counsel, and others when making the decision to bring on a contractor, partner, or law firm.
Why It’s Important to Be Selective About Your Law Firm
Unfortunately, there is more to building startups than building a product and taking it to market. Along the way, there are events, situations, and decisions filled with legalese that requires the help of a lawyer or law firm.
While it might be tempting to get going with the first law firm you speak with, they ultimately will be a partner to your business and should require some selectivity. So what areas will you likely need a hand with from your future law firm?
As always, we recommend speaking with your peers, mentors, board members, general counsel, and others when making the decision to bring on a contractor, partner, or law firm.
1. Incorporation
Incorporating your startup is an early step in the startup journey. As put at the team at Startup Savant, “Incorporating your startup means establishing your business as a formal legal entity, separate from its founders or owners.”
To help with this legal process, you’ll want to make sure you have legal representation to help throughout the process.
As written by the team at Contracts Counsel, “A partnership agreement lawyer assists members of a partnership to decide on a business structure through drafting a legal document. Partnership agreement lawyers essentially help businesses craft partnership agreements that reflect the relationship.”
2. Partnership agreements
Another early technicality of building a startup is the partnerships and agreements that come with it.
3. Employment Issues
Inevitably throughout the life of building a business, employment issues will arise. In order to make sure everyone involved is covered it might make sense to bring in legal help.
4. Protecting your Idea
Law firms are also a great way to protect any original ideas or products. This can include trademarks, patents, copyright protection, and more.
5. Protecting your Brand’s Identity
Going hand in hand with protecting ideas is protecting your brand’s identity. As the team at HG.org puts it, “Another manner of protecting the ideas of the creator is through a trademark. These may be but are not required to be registered through the United States Patent and Trademark Office. There are benefits when this is completed, but the trademark itself protects the image or brand of a company or owner.”
6. Generating Website Documents and Dealing with Data Privacy Issues
As internet regulation continues to change and mature so do the documents and data that deal with privacy issues. As companies have been impacted by GDPR, legal documentation and privacy issues are a standard. Lawyers are a great source to help here.
7. Issuing Stock to Co-Founders
When working with cap tables and issuing stock and stock options to co-founders and employees, seeking a lawyer’s help is inevitable.
Related Resource: Employee Stock Options Guide for Startups
8. Complying with SEC Regulations
When working in the US, startups, and companies are subject to regulations from the SEC. Working with a law firm can be a great source to make sure you are compliant.
Related Resource: 6 Components of a VC Startup Term Sheet (Template Included)
9. Financing your Business
There is a growing interest amongst law firms to invest in their clients. This has the chance to help fuel growth for your business but can also change the relationship with your law firm.
What to Look for In A Startup Law Firm
When it comes down to looking for your specific law firm there are certainly questions and thoughts to keep in mind. Before even taking a meeting with a potential law firm, ask yourself the following questions.
While you might not be able to answer them fully before speaking with them, you should have a strong understanding and can spend your time meeting with them to focus on the fine details.
As always, we recommend speaking with your peers, mentors, board members, general counsel, and others when making the decision to bring on a contractor, partner, or law firm.
Do they have startup experience?
There are countless types of law firms that all specialize in different areas. Even within business, there are law firms that will hone in on different aspects. Make sure you are communicating and working with law firms that understand the mechanics of startups and have done it before.
What does their scope of work look like?
Working with a law firm is another relationship and partner for you and your business to take on. Be sure you understand how they communicate, their standards, and more before hiring a firm. Talking to current and past clients of theirs is a great way to verify their scope of work.
Do they have valuable startup connections?
If you are hiring a law firm that specializes in the startup world, chances are they have connections to other startups and partners in the space. Determine their willingness to make connections and consider if that is something you are looking for in a law firm.
Is the cost in-line with your budget?
Simply put, are they affordable? Law firms come in all shapes and sizes. It can be a considerable expense for your business so make sure they align with your budget and goals.
Do you share similar values and/or culture?
As we’ve alluded to previously, adding a law firm is adding a partner to your business. Making sure there is a chemistry and match in your values/culture is a great way to ensure a strong relationship.
Related Resource: A User-Friendly Guide to Startup Accounting
Great Startup Law Firms to Consider
As always, we recommend speaking with your peers, mentors, board members, and others when making the decision to bring on a contractor, partner, or law firm. However, we have laid out a few law firms below that specialize in working with startups:
Cooley
Cooley is a startup-focused law firm based out of Palo Alto. As the team at Firsthand puts it, “The go-to firm for startups and early-stage companies, Cooley is ideal for those seeking cutting-edge work with innovative clients. The firm has a highly social culture that will no doubt appeal to affable personalities and boasts a strong commitment to diversity and inclusion. With more than 1,200 lawyers practicing across the U.S., Europe, and Asia, Cooley is synonymous with tech and venture capital work. The firm is also well regarded for its cleantech, cyber/data/privacy, IP, M&A, private equity, and securities practices.” Learn more here.
Related Resource: Private Equity vs Venture Capital: Critical Differences
Fenwick
Fenwick has offices across the United States and has built a name for itself by working with high-profile technology companies and startups. Fenwick features a startup resources section on their website and takes a founder’s first approach. Learn more here.
Gunderson Dettmer
As put by the team at NYC Founder Guide, “Six years in a row, Pitchbook has ranked this firm #1 for high-growth technology and life sciences companies and investors globally. With a singular focus on startups and emerging companies, they are recognized as one of the most active law firms in the VC market, and in 2019, they closed $18+ billion of venture capital private financings. Startups they’ve worked with include Harry’s, Vimeo, Skillshare, and Oscar.” Learn more here.
Goodwin
From their website, “We are a global law firm with a history of working on groundbreaking matters, and an increasingly focused approach to working with clients in the financial, private equity, real estate, technology and life sciences industries. Our more than 1,800 corporate and litigation lawyers leverage their specific experience and assemble full-service teams to advise clients in these and adjacent industries.” Learn more here.
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