How to Pay Your Lawyer

I just read an excellent post on VentureBeat by attorney Scott Walker on the options available for paying startup legal costs.  Scott very concisely lays out the three basic options that presently exist for paying legal fees for your startup:  equity, deferral, or cash. I use cash-based alternative fee arrangements quite extensively and get quite a few questions about equity.  So, I thought it is worth discussing Scott’s post here while talking a little bit about my philosophy. Equity I get asked about whether I will accept equity in lieu of cash for legal services frequently (if you are interested in the details, check out my post on how equity in lie of cash works).  As…

Three Questions to Ask When Hiring an Attorney

Many of my friends, neighbors, and acquaintances ask me about how to find a good attorney in practice areas in which I do not practice (like family law, estate planning, and defense). The conversation typically turns into some form of referral to someone I know and trust and whom I believe can assist. I suspect many of you out there do the same thing, that is, ask a friend if they have a good lawyer to refer you to instead of searching blindly. But once you get the referral, how do you determine that the individual you were referred to is someone you can trust and work with? Here are what I consider to be…

The Difference Between Company Counsel and Investor’s Counsel

In the startup and emerging growth company law practice space, there are two types of attorneys: Those that represent startup companies and those that represent the investors that invest in them, such as angels and VCs. Some big law firms purport to do both. However, upon closer examination, this is not possible in many instances. “Why?” you might ask. Well, because there is an inherent conflict of interest between the interests of investors and the companies that they are investing in. Sure, both sides want startups to be successful but each side has different motivations for that success and different ultimate goals. In addition, most state’s bar rules prohibit attorneys from representing both sides of…

Two Reasons Why Every Startup Needs a Lawyer

I can see you rolling your eyes now, “Why do I, a seasoned entrepreneur, need a lawyer?” You’ve been through the song and dance before – the formation, the hiring, the financing, the exit – and paid through the nose for it in legal fees. Why do it again? Why not just do it yourself, using the know-how and forms you acquired from your previous startup? Here are two reasons, the second of which is perhaps the most important.  (BTW, the I address attorney costs and how to pay for your lawyer in other posts). Not Every Startup is the Same. You intuitively know that every startup is different. So, why treat your present startup…

Why Alternative Fee Arrangements Work

So, you are at a networking event and you meet an attorney.  What is one of the first questions you ask him or her?  “What is your hourly rate?” It seems that the law firms have conditioned consumers to the use of the hourly rate, or the billable hour, as it’s called in the legal services industry.  The billable hour dates back to the founding fathers and, aside from continuously going up, has changed very little since then as the predominant methodology for pricing legal costs. That is, until recently.  There has been a lot of press in the last year or so about alternative fee arrangements but what are they?  Alternative fee arrangements, or…

Four Reasons to Work With a Small Law Firm

Of the state’s 22,000 practicing attorneys, 19,000 work in law firms with 17 or fewer lawyers, according to a Washington Bar Association estimate. More than 60 percent work in firms with five or fewer lawyers. Of the 3,000 that work in larger law firms, the vast majority work in three offices:  the Office of the Attorney General for the State of Washington, K&L Gates, or Perkins Coie. If you are a tech or biotech startup and your inclination is to work with a larger firm, chances are you will have to take a number.  Here are four reasons to consider using a smaller law firm. 1. Responsiveness. Getting quick responses to your legal questions as…