Over the years, I’ve worked with many lawyers. Despite the fact that startups are relatively small, our legal needs are complex. You can’t skimp with lawyers if you’re building a startup. If cousin Joe has a general practice, he won’t do the job. You need specialized expertise.
One such specialist is Suzanne Dingwall Williams from Venture Law Associates in Toronto. As her firm’s name suggests, she’s pretty focused on serving the needs of startups. She has written an excellent post on what it means to be an entrepreneur’s lawyer and asked some entrepreneurial types such as myself and Alec Saunders to add their comments. As a former VC, Suzanne has seen all sides of this important relationship. My thoughts on the ideal startup lawyer are below.
The ideal startup lawyer:
Wants to do business: Great startup lawyers balance the need to protect their clients while enabling them to do what they want. The conversation goes something like this: “Here’s what I need to do. Now how do I do it and stay out of jail?”
Speaks plainly: Great lawyers speak in plain English (or whatever language you speak natively). Those that speak in legalese rarely rise to great heights.
Is committed to the startup community: During the dot com phase, all the big firms started trolling for startups, when the bust came, they ran for the covers. I want to work with firms and lawyers that are truly committed to startups. That commitment manifests itself through i.) The people they assign to your file (if you get junior people only, it’s not a good sign); and ii.) Their billings (see below).
Charges “reasonable” fees: Startup lawyers need to take a life cycle view to their client relationships. They should expect major discounts early on and hope to make these up as the company builds towards an exit.
Is connected: This is especially relevant for new entrepreneurs. Your lawyer should provide more than just legal advice. They should also be able to connect you either to VCs or to potential partners, etc.
Has domain expertise: i.e., in fundraising. It’s not enough for your lawyer to come from the corporate finance department in their firm. They must have relevant and recent deal flow expertise in the venture space. They should know the NVCA templates cold and should know what current market standards are for deal terms like liquidation preferences.”