How to find the right lawyer for your startup?

Last Updated 07/08/2023

Most startup founders have a great initial idea. After the first phase of excitement the real work starts and what follows is usually a lengthy list of to-dos to get the idea off the ground. Sooner or later, legal will become one of these to-dos. The reality is mostly not about the hard battles competing startups fight with each other, but simply about getting the day-to-day legal tasks that are necessary to run your business.

The stories of large legal bills or even failed companies due to legal issues shows: Getting the right lawyer can save you a lot of money and problems down the road. The difficulty: The market for legal services is not buyer friendly:

Information asymmetry: There are many great lawyers out there. However, as a non-lawyer, it is difficult to know the true complexity and importance of a specific legal matter and the quality of the legal services. Like the doctor that prescribes you a pill, a lawyer may sell you an unnecessary and costly service even though your company may be just fine without it.

Untransparent and inefficient market: It is difficult to compare quality and price across different service providers as law firms rarely publish pricing for projects, let alone fix project offers.

High value of a long-term relationship and switching costs: A lawyer needs to understand your business model, your history and your risk appetite in order to give you the best advice suited for your company. It takes time to build a good working relationship and having a competent lawyer that knows your business inside out. Once this is established, this is of great value. At the same time, switching lawyer comes with high knowledge transfer costs.

Startup lawyer selection criteria

Lawyers are often selected like dentists: Can he/she relieve me from my pain and what will it cost? While fast, cheap and good help seems like the best ad-hoc solution, considering the long-term relationship and benefits shouldn’t be neglected. To get the most out of your startup – lawyer relationship, you should assess them in the following areas:

Expertise and experience

Every industry has different terminology and applicable regulations (e.g. Finance, Tech, Pharma). Test whether the lawyer has experience in your sector and understands the type of business model you are running. This means when you run a SaaS business, you shouldn’t have to explain how a subscription works etc. In addition, make sure they have worked with companies in your specific growth-stage.

Language and communication

Legal language is often difficult to understand for non-lawyers. It’s of vital importance that your lawyer can explain complex concepts in a simple way and doesn’t hide behind legalese. For example, contracts or terms and conditions addressed to your customers should be easy to understand. Otherwise, this could lead to an additional hurdle and time delay in your sales process.

Working mode and efficiency

If you’re a startup founder, you want things to move fast. In order to do so, you establish efficient processes to reaching your goals. The same should apply to your lawyer. Efficient processes, legal automation for repetitive legal tasks and in general fast reaction times can make all the difference if you have a pressing legal issue.

Pricing models

Legal is one of the oldest professions and so is its pricing model. While the industry is slowly changing, most lawyers still offer hourly-based services only. While this may be suitable for the complex legal issues where predicting outcomes and time needed is difficult, you should always ask for project flat-fees or at least a fee cap so you can better estimate your cost.

Long term relationship / culture

Building a long-term relationship and having a competent lawyer that knows your business inside out is of great value, for example if you need advice urgently. Spend some time with the selection processes to ensure the lawyer fits your company culture, is open for your constructive feedback and is looking to build a long-term relationship. References and talking to people who have worked with the lawyer before will give you a better picture.

Startup lawyer selection checklist

Make a list of all your requirements beforehand and schedule free consultations. Your checklist should include:

Expertise and experience

  • Ask if they’ve worked with businesses within your industry or with similar business models (they might not be allowed to name clients, but they should at least give you anonymous samples of previous projects).
  • Use “buzzwords” and test the lawyer’s knowledge of them (e.g., ask them what their take is on smart contracts if the claim to be a blockchain expert).
  • Ideally, you also find publications of the lawyer to give you an indication of their expertise.

Language and communication

  • Check whether the lawyer explains complex matters in simple terms
  • Ask whether he/she can give you a simplified answer without too much “legalese” in case it gets too complex

Working mode and efficiency

  • Assess whether the lawyer responds to every question with “it depends”, or whether he can provide you with actionable advice for your legal issues
  • Ask what communication methods they offer and what tools they us to increase efficiency

Pricing models

  • Ask for a project flat-fee or a fee cap if possible so that you can predict your costs (they always should provide this quote for free)
  • Mention that you are getting other quotes in order to get the best price

Long term relationship

  • Is a cheap startup offer just a hook to get you in, or do they work with reasonable market prices after your first engagement?
  • Are they a cultural fit to your company and interested in becoming your sparring partner for any legal topics?
  • Check reviews on Google and other platforms
  • Ask others (e.g. their references and other startups you know have worked with them)

By Christian Meisser

CEO & Legal Expert


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