I’ve seen this topic pop up a few times recently, so I thought it was time to write about it and distill what I’ve learned over the years into a few bullet points. Hiring a lawyer (especially for a first time founder) can be a bit overwhelming, but having a systematic approach can do wonders.
Here’s what I recommend to founders (first time or otherwise) hiring counsel for a new venture:
Make sure the lawyer or firm actually focuses on early stage companies and startups. This is probably the most important factor and the most common mistake we see founders make. Often times, firms will market themselves as catering to startups or offering startup packages without having a lot of actual early stage experience. Sometimes, there’s a natural inclination to work with someone in your pre-existing network who offers to take on the work (uncle with a general law practice, college roommate who went to law school, etc). Just like other professions, skill sets and experiences vary greatly among specialties and sub-specialties. In some cases, even the most experienced/talented general business lawyer may not have the skills or approach necessary to guide founders through the early stages of a new venture.
Ask the lawyer about their specific startup experiences. The best approach here is often to ask discrete startup-centric questions. For example:
♦ What vesting schedules do you recommend for founders?
♦ When granting stock to founders, when is an 83(b) election necessary?
♦ At what stage do you recommend a 409A valuation for early employee equity grants in lieu of restricted stock grants?
♦ What trends have you noticed in your recent early stage financing deals? What are the tradeoffs you see in a C-Note round vs. a priced seed sound?
♦ Can you talk about any of your clients’ successful exits or raises?
The point is not necessarily their exact answer (sometimes there may be reasonable but differing approaches to the same topic), but you should be able to gauge their familiarity with the topics and their ability to give somewhat concrete advice in the moment. There will always be some element of “it depends on the situation” for any legal issue, but you should be able to get a sense of their experience, skill set and startup knowledge by asking the right questions.
Ask other (relatively successful) founders for recommendations. In general, recommendations from founders who have raised a few rounds of capital should carry the most weight as those sort of transactions are the most important of a startup’s early life. While it’s always good to hear from people who have had a good general experience with their lawyer, discount those who have just had a lawyer do the initial corporate set up work since they haven’t yet “gone into battle” with their attorney.
Price is important, but it should not be the only (or close to the most heavily weighted) factor in the decision-making process. I always use the analogy of finding a good tattoo artist. No one wants to overpay, but the cost of under-paying can be far worse. If someone offers you a complex tattoo for you $25, you’d think twice about it. Just like getting a cheap tattoo, cheap legal work can be way more costly and painful to fix later than to do it right up front . Lawyers who live and breathe in the startup space understand the need to be cost-effective and will do everything they can to build a long-term relationship. Even if the initial rate or fee is higher than others, they can usually offer much more value and save money in the long run. At the end of the day, we only succeed when the client succeeds so the last thing we want to do is hamstring the company financially in the beginning. No startup lawyer is going to retire off of an incorporation package, so we are always really betting on clients’ long-term success and often take losses and give time off the clock during the early stage of a relationship.
Personality and “fit” matters. Find someone you like working with and is equally as excited about your venture as you are. You’ll likely go through some dramatic times together and a great working relationship can be incredibly valuable along the way.
There are some truly great startup lawyers in the Philly region. I like to think that we all push each other to get better and that we tend to be more collaborative than competitive. Conversely, I think there are firms that market themselves to startups without really having the substantive experience necessary to add value. The latter does a grave disservice to founders.
We are all trying to build a great ecosystem here and want founders to find the right fit (even if it’s not our firm). We are always happy to provide recommendations or intros to other startup lawyers we really like and have had great experiences with. We know some truly great ones.
Onward and upward,
To our Clients, Partners, and Allies,
We haven’t found the right words to properly say thank you for this year but we are going to try our damnedest.
2017 was the birth of something new for us. We re-branded, re-tooled and re-launched as GrowthCounsel. The goal was not to get bigger; the goal was to get better. Although we are proud of all the strides we’ve made, we hope that 2017 was just the beginning of finding better ways to work with great people.
Over a decade ago, Geoff and I started as interns together. Being in the trenches together at a big firm was an invaluable experience. We were lucky enough to have incredible mentors and colleagues. We cut our teeth as baby lawyers and slowly found our way through those first few years. Ultimately, there was something deeply unsatisfying about practicing law under the constraints of a large firm.
Flash forward to 2018. We may be the happiest lawyers you’ll ever meet. We love what we do, how we do it and the people we are privileged to do it with. We wake up every day ready to go to battle for our clients.
While we’re proud of what we’ve done in 2017, we’re even prouder of what you’ve done:
- You raised over $15,000,000 in early stage financing and growth capital.
- You launched 45 new ventures.
- You closed 15 successful acquisitions and dozens of meaningful partnerships.
- You launched hedge funds, domestically and abroad.
- You achieved 3 incredible exits.
- One of you beat out 45 startups competing for top prize in the PACT Lion’s Den pitch competition.
- One of you took TechCrunch Berlin by storm, bringing the gold back to Philly.
- You’ve helped create hundreds of new jobs across the region.
We’re incredibly grateful to be a (very) small part of your individual and collective success.
We had some important moments this year as well:
- John Kirk Esq. joined as Of Counsel to help expand our Austin, TX footprint and develop our part-time general counsel services for early stage and mid-market companies (Counsel-As-A Service).
- The talented Ms. Lauren Hutton has come on board to help with client outreach, marketing and communications.
- We moved into a great new office space that we are thrilled about (seriously, come visit!).
- We were lucky enough to hire one of our incredible mentors from our younger days. We can’t share the details quite yet, but we’ll have some great news come early February. It goes without saying, we outkicked our coverage.
We’re incredibly excited for 2018 and have some ambitious plans. We’ll get bigger, but never just for the sake of it. And never at the expense of compromising our core values. We’ll continue to get better and welcome your feedback on ways we can improve. We’ll be more committed to being as agile as our clients. We’ll be selective about taking on new clients, so that you’ll always remain a priority. We’ll continue to move away from the billable hour and find better ways to deliver value to our clients. We’ll find more ways to bring our clients together and build a collaborative community so we can all help each other reach new heights.
Any firm will say this, but we actually mean it. We have the best clients. The things you’ve done (and will continue to do) inspire us. You drive us to get better. We’re proud to have earned the trust and support of such an incredible group of people.
Let’s make 2018 an amazing year.
Thank you from the bottom of our heart.
And, as always, ONWARD AND UPWARD!
Last fall I packed up my practice, drove cross country and set up shop in Austin, TX for a month. Subsisting almost exclusively on Tacos, BBQ and tequila, it was one of the best months of my life.
While it started out as a way to kick back and re-charge, I was amazed to find how productive I was on the road. Days seemed longer, the work was more fun and I had plenty of time to think big picture (both about business and life). I came back with a revamped business plan and a renewed passion for my practice. Nothing has had a more positive impact on my business than those days I spent on the road, think and planning with a clear head (and with my phone in airplane mode for days at a time).
Somewhere between Arkansas and Tennessee on the drive home, I decided that it would become a regular and vital part of my business life. This year, I’m working from San Pedro, Belize for the month of February (and writing this from my patio on an 85 degree day). Things could certainly be worse and I’ve traded tacos for the local papusas and ceviche.
But, it honestly goes a lot deeper than just unwinding and taking some time off. There is an incredible amount of good (both professionally and personally) than can come out of it. For example:
- It forces you to become efficient. Think of it as a stress test for the way you work. When I’m at home, there really aren’t that many consequences for being inefficient or not properly planning my day. Worst case, I get a little less sleep than I’d like to. Not ideal, but far from fatal. When you’re planning a long trip away from home base, it FORCES you to think about the way you operate and how you can improve it. It forces you to be lean and disciplined. It forces you to be thoughtful and to plan rather than just grind things out with your head down. How do I make the most out of this 3 hour window of time? How can I get the most of this meeting? Does this conference call need to happen at all? What can I automate or systemize? Who can help me if something happens? What am I spending time on that simply doesn’t need to be done at all? Almost overnight, operations get leaner, better thought-out and significantly more efficient. Scarcity of Resources = Innovation + Improvements that will continue to serve you long after you get home.
- Direction is exponentially more important than speed. Work gets busy. Life gets busy. It’s incredibly easy to find yourself in the weeds on a daily basis. If you don’t have time to think/plan big picture, then, almost by default, you put your head down and run as fast as you can to get everything done without really making sure you’re heading the right way. Getting away from things is a chance to step back and make a course correction. The time and space necessary to think about things in a broader sense is a precious commodity. But making a few big picture tweaks can have a greater impact than a few thousand hours of grinding it out. The person steadily walking to the right destination will get there sooner than the person sprinting their hardest a few degrees of course.
- It can be much easier to go away for a month than a week. When going away for a week, it’s a struggle to get ready to leave and its stressful to play catch up when you’re back. You’re also trying to fit a month’s worth of activity into 7 days and getting frustrated with every work matter that yells for your attention. When I travel, I will be the first to admit (to myself and my co-travelers) that I will be working a somewhat normal schedule. Just setting the expectations up front makes the process exponentially less stressful. I’m not running around trying to fit every activity in; I’m working my normal schedule (with a few extra taco breaks thrown in) and exploring the landscape on nights and weekends. By the time I head home, I’ve gotten to see and do more than a normal vacation without having my business life thrown into disarray.
- Boredom is a blessing. Remember going on a road trip when you were a kid? Without iPhones or DVD players, you just stared out the window for hours at a time and just thought. That’s it. Just thinking. Not checking your phone every 10 minutes or sending one more email before bed. Just thinking. Especially if you’re traveling alone, all that time and space to fill can be a bit unsettling at first. But, if you can embrace it, it’s amazing what your brain is really capable of. It will make connections and birth ideas in a way that just doesn’t happen when jumping from task to task. After you spend 5 minutes cursing spotty Wi-Fi and poor cell coverage, you start to realize how productive you really are when you can unplug from the tyranny of the urgent.
- It will probably make you a better and more interesting person (fingers crossed). It will take you out of your comfort zone and you’ll learn a myriad of different perspectives on different topics. Every day, I feel like I learn something that I can translate to my life back home. Whether that’s learning about operations from an ex-pat bakery owner or about sales from the sketchy guy trying to sell you weed on the beach, there are life lessons everywhere. They just seem to stand out more when you’re in a new place. Your eyes just tend to open a little wider.
- It’s really fun. Like really, really fun. You can feel a bit like a pirate. Honestly, sometimes that’s a good enough reason.
This is a long of way of saying that, if you ever find yourself with an opportunity to have an adventure, you should absolutely take advantage of it. Once you get past the initial fear and inertia involved, it’s an incredibly valuable and rewarding experience. While it feels like a bit out of norm professionally, the return will likely greatly exceed the cost.
Personal Bonus: After swimming with sharks down here, dealing with other lawyers doesn’t seem so bad after all…
Cheers to the Open Road.
In 2013, LegalZoom did over $200 million in revenue. Those numbers have surely gone up significantly since. It’s a pretty logical conclusion that, without LegalZoom and others like it, those hundreds of millions of dollars would be going to us lawyers. That’s a lot of marble-trimmed conference rooms. Even the most mathematically challenged lawyers among us esquires (myself included) have to admit that’s a sh*tload of money (legal term).
So why do I think that’s a good thing?
It forces us all to get better.
Traditionally, lawyers as a profession have been painfully slow to adjust to changing times and markets. That’s not intended to be an insult to our profession. It’s just simply that we’ve never had a reason to adjust or compete. There was no alternative and too many barriers to entry. Just like travel agents had to deal with online travel sites, newspapers have to deal with blogs and new media, we have to deal with advances in legal technology.
New document automation companies and online legal services are popping up every day and taking huge chunks of the legal market. Why does that not worry me?
Although these companies should (rightfully) create some competition for us, the bar is really, really, really, really low. Like really low.
Think about it. If a surgeon can’t compete with a company that will sell someone a scalpel, there’s a bigger issue. If we can’t do better than an algorithm or a call center employee somewhere in West Virginia, maybe we are in trouble.
It’s our job to help our clients realize why we bring value to the table and why relying on documents without any context, insight, or customization is dangerous (and maybe worse than not having anything in writing at all).
To be clear, I think legal automation services are (outside of very specific situations) potentially dangerous for clients. They can give someone the illusion that they’ve done everything necessary to protect themselves, run a business, protect their estate, etc. when, in most cases, they probably haven’t.
In fact, LegalZoom says very clearly on their website:
We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies”.
Fellow lawyers – That’s where we come in. I am still trying to figure out how I can get paid without providing advice, explanations, opinions, or strategy. It would greatly reduce my workload, but I’m still trying to figure out what exactly the client would get out of that deal.
But LegalZoom is good for our ecosystem. It creates competition. It creates a need for us to be more customer-centric. It requires us to invest in our platform and make the client-lawyer relationship a better one. It makes us think about the value we can add to client’s business and lives. It takes us off autopilot.
It’s not an obstacle for us. It’s an opportunity to do better work. If we don’t, it sounds like LegalZoom will always be hiring.