law, lawyerOne of main components in business is to take care of legal stuff.
Options are:
Option 1 is obviously the best yet not as common as one would like, so most startups have to take options 2 and 3.
The problem with options 2 and 3 is you have to trust someone with all your ideas who can screw you over most, someone who knows how to ‘get around’ things.
Thing to note 3 is going to be expensive and you still don’t get any guarantees.
Problem with 2 is how to tell that lawyer is competent and can protect business properly from competitors not overbuying patents and not being to loose when you have no idea about the law yourself? Someone is going to suggest to get lawyer by recommendation from someone you know, but I have found it difficult to do personally as one needs business (not a divorce) lawyer and they are usually hard to come by.
My past experience hiring lawyers over internet turned out to be disaster one lawyer turned out to only have license to deal with papers and no qualification whatsoever to represent me in court, this happened after I already signed over 10% of company shares (she had excellent track on Elance with 20+ happy clients by writing them T&C and preparing contract agreements), and other that at one point suggested to appoint her a company director so she would look better when talking to clients and when confronted said that normally she would charge £600 for that.
Where to look and how to avoid getting entangled with scammers and find good reliable lawyer?
Or a combination of the above.
Board members are expected to oversee the entirety of the business - including legal, operations, sales, etc. A solution that often ends up working out, especially if the startup is disrupting and thus there is a very limited legal doctrine around what you are trying to achieve, is somewhere along the lines of:
Identify board members who would have the inclination to oversee the legal department. They would have the personality traits such that they will learn this new domain, are meticulous and precise, have the will to work out how to ‘get around’ within the system. These people often are the same ones who would oversee financial divisions as well.
Identify the problems - are we talking about run of the mill contracts (employment, sales) - chances are you already have good enough templates from your prior work history - if not, hire someone and be prepared to work with their templates. Most accounting firms would actually have the templates for these kinds of thing - that “VP of Legal/Finance” person should be able to review them and edit accordingly, developing her/his skill inhouse.
For difficult tasks, hire a lawyer as a consultant, and use him as a consultant, not as a contractor. You can hire him either on equity or cash basis - but since it’s a consultation, and you did your groundwork beforehand, it should not be as expensive, and you would need to have the best knowhow at that ‘VP of Legal/Finance’ position anyways to make informed board decisions.
Know the difference between legal and paralegal, and sort out how to outsource different components. Patent discovery is tedious but not secret - coordinate inhouse. If you have the experience, write a draft patent application, and consult with a lawyer to make sure you dot all the i’s.
As with everything in business - they key decision is always what to outsource, what to hire, and what to assimilate at the board level. Make sure you can always fulfill your fiduciary duties of being able to supervise, and learn, learn, learn. By the time you hit it big, you will need to make sure that One of partners has this knowledge. - either by hiring a lawyer (at that time, you’d know who’s good) onto the board, either for equity or cash, or your ‘VP of Legal/Finance’ would actually become quite competent in the legal domain of your bread and butter.
Also keep in mind that if you’re disrupting a market segment, off-the-street lawyers would not understand your environment. It’s difficult to find a lawyer for PayPal if everything that touched retail finance before PayPal was a Bank.
Make sure your board can debate a lawyer, otherwise, he will negotiate you into being too conservative.
You didn’t mention the size of your company so I’m not even sure if you have an actual independent board or not. If you are very small, you will need to retain 2 types of lawyers - one for daily/regular business items such as drafting contracts, writing disclaimers, etc. The other should be a rarely used company that specializes in litigation in your industry and onyl the second needs to be an actual firm/person. The first can be obtained through a legal website where you input what you want and a qualified lawyer will draft what you need and youy cna confirm all the details.
For the first, you can use LegalMatch, RocketLawyer, and LawPivot (actually bought out by RocketLawyer.
For the second, find a list of law firms in your location with litigation experience in your specific field. This requires some research and you can pay the firm a small retainer fee so that you can call them anytime something comes up. When it does, they will be able to represent you and you will not have to pay prior to that. This is helpful because you may need to respond quickly and its best to have someone you know you can call. No lawyer that works on simple business contracts will be able to provide you with guidance on going to court, let alone actually representing you in court. For this one unfortunatly, there is no easy web search.
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