5 ways startups can get the most out of their lawyer (and avoid being terrible clients)

Representing technology startups has its ups and downs. On the one hand, it can be thrilling to help innovative clients raise capital, grow and bring their ideas to market. On the other hand, startups as legal clients can be unreasonably demanding, unsophisticated and insufferably cheap.

I’m convinced that no entrepreneur wants to have a bad relationship with their lawyer, so here are five tips for entrepreneurs to maximize the value they receive from their lawyer, and hopefully keep the good vibes going:

1.  Hire a lawyer for the right reasons

At the most basic level, lawyers are advisors. They are there to answer your questions and help you achieve your goals. If you don’t know whether you need a lawyer, it doesn’t hurt to ask. Also, keep in mind that:

  • Lawyers are not insurance policies. Don’t attempt to shift the risk of making a decision onto a lawyer. That puts the lawyer in CYA mode and makes them more conservative (and therefore less helpful).
  • Lawyers are not legal forms generators. They provide counseling and advice, which is really what you’re paying for. Legal drafting and document management is part of the service that lawyers provide, but is only a small fraction of the value that lawyers deliver. If you just need a form and no legal advice, there are plenty of inexpensive (or free!) online resources for that.
  • Lawyers are not investment bankers. Don’t expect your lawyer to help you find investors. They may help make introductions, but your lawyer’s time is best spent focusing on legal matters.

2.  Know what you don’t know

Ask your lawyer a lot of questions. They LOVE to answer questions, steer you to appropriate resources and otherwise help you out. That is why a lot of them got into the profession in the first place.

The most sophisticated clients are the ones that ask the most questions. Unsophisticated clients are that way because they don’t know what they don’t know – they assume that they have knowledge and therefore tend not to ask very many questions.

Don’t be an unsophisticated client. Don’t assume you know something, and if you don’t know something (or don’t know that you don’t know something), ASK!

3.  Create and actively manage a realistic legal budget

Legal customers of all types and sizes love to complain about legal fees, and in some cases lawyers can be unreasonably expensive. However, part of the reason that legal fees can get out of control is due to the client not having a realistic legal budget. You are responsible to have a conversation with your lawyer in advance about how much their services will cost, and almost all lawyers will be able to give you accurate estimates of your costs for a project.

Similarly, you need to stay on top of your legal spend by requesting regular status updates about the amount of legal fees being incurred on a project, especially if the project spans multiple billing cycles. If the amounts look like they are going to exceed your budget, it is your responsibility to inform your lawyer and make changes in the scope of representation if necessary.

4.  Pay on time

Your lawyer is part of your team. Lawyers, like any other member of your team, need to be incentivized to perform well for you, especially under the types of difficult conditions with which clients typically hire lawyers to help. If you don’t adequately compensate a member of your team, you shouldn’t be surprised if your relationship with them starts to get tense, and, after too long, ceases to be a relationship at all.

Even if you think your lawyer is charging too much, you will engender a lot of good will by paying at least a portion of your bill on time. Then initiate a conversation with your lawyer about what to do about the balance. 

5.  Communicate. Communicate. Communicate.

Lack of communication is the quickest way to alienate your lawyer. Unanswered emails, phone calls, lack of response to information requests, etc. render a lawyer nothing more than a white-hot sphere of pure rage and frustration.

More importantly, however, lack of communication actually serves to reduce your lawyer’s productivity while simultaneously increasing your legal costs. Every time your lawyer starts and stops work on a project waiting for your input (especially when there are long intervals in between), time is lost and it takes more time and effort to get back up to speed.

Even if you don’t have time to fully respond, a one-line courtesy email (“Got your email, I’m on it.”) goes a very long way to maintain your lawyer’s sanity, productivity and cost-effectiveness.

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