Several start-up businesses have failed over time due to disputes between partners – in the case of a partnership business – without the consulting the services of lawyer’ skill in conflict resolutions in that business space.
More so, the thorns of regulations have choked some businesses which started or proceeded with operations without legal guidance as to what legal provisions permits or validates such moves, hence, falling victims of regulatory actions resultantly cost them more than they bargained for.
Living within the thought that the services of a lawyer/legal practitioner is not needed and you can survive just fine is almost synonymous to planning to fail as most thriving businesses you see today at one point or the other required the services of law experts or law firms. Therefore, choosing a lawyer is a decision you as a start-up must consider.
In the words of Tolulope Ogunmola, managing partner at Garnet law practice, “initially and depending on the size of your operations, a sole practitioner who is knowledgeable in entity formation and contract law might suffice.” He further asserted that as you grow you would want a legal team that is knowledgeable in the best regulatory practises in the sector(s) you operate.
The services of the lawyer may include advising you on stock option plan strategies, term sheet negotiation, intellectual property (IP) licensing, IP strategy and management, regulatory compliance, international expansion and much more – cited from Ogunmola’s article on picking the right lawyer.
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To highlight just a few, why you need lawyers as cited in wall street article on “Importance of hiring a lawyer for business”
- All types of businesses need lawyers to provide them with legal guidance regarding aspects such as contracts. Any type of business transaction requires varying levels of negotiations, document preparations and reviews
- Most business owners lack the knowledge and experience required to handle various legal aspects of running a business. Consulting a qualified lawyer to handle your business matters can be highly beneficial towards enabling you to prepare documents, get legal protection and protect your business interests as well
- Hiring a lawyer also allows you to secure the most ideal terms for your company. Investing in legal assistance before reviewing and negotiating agreements prevents bad contracts that increase the risk of major legal problems
So, here is the question, what should a start-up consider when choosing a legal practitioner?
Most times, start-ups are faced with the challenge of legal affordability. This drives home the challenge of cost. The early stage of a start-up is identified with the constrain of cash. However, this may not pose a problem as some legal firms or lawyers who are willing to work with start-ups, adjusting their payments such that it reduces the payment-burden of these small businesses within a short-term period. Hence, a start-up needs to ascertain the payment arrangements of potential lawyer of law firm.
Secondly, there is need to understand that different lawyers and law firms have varied levels and years of experience. A lawyer’s experience within a sector you are located is a key consideration when making a decision on the services of a lawyer. Also, what the track record of the lawyer in that industry – measured by his successes while dealing with other businesses. Therefore, it is advantageous when these considerations are made as it helps strengthen your confidence that the legal team you’ve appointed is capable of dealing with issues that may arise in your business relationships.
You may also want to consider the culture of the legal team. According to Ogunmola, “while some firms are largely collaborative, others are individualistic.” A collaborative legal firm is able to leverage the collective knowledge of the firm to offer a more effective and efficient legal counsel, quicker responses and business friendly answers. This should be a top priority when picking a legal team for your start-up.
Most importantly, the legal team must believe in the company’s vision. Hence, you may want to consider an objective person as your lawyer who will work with you in across the various phases your business will pass through. There are trying times and just like your wife is expected to stick with you in these periods, the lawyer is expected to stick with the business.
