How does a pre-funding startup approach an attorney?

Question

Before a substantial funding round we probably can't afford a law firm. Apparently there are solutions to the issue and I have heard that some lawyers accept equity instead of cash. How does this exactly work and what are common terms? Should we as a startup take that route?

Answers: 1 public & 0 private

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Patent Agent

I am a patent agent (as opposed to a patent attorney) and I have my own business, so my situation allows me some flexibility in this area. I work with startups (primarily in life science fields) and have developed creative funding arrangements with clients which can vary, depending on the client's needs and our ability to agree on terms. Before accepting any alternate arrangements, I need to feel very confident about the product/service being developed and also feel confident about the skills of the startup team. I have accepted a share subscription agreement as a partial form of payment, but I wouldn't do this without having a full understanding of the types of shares being offered, numbers being offered, etc. I have also accepted an arrangement in which a startup had one of their members provide a business service to me in exchange for my time on their project. In my opinion, you are more likely to be able to find someone willing to consider different terms if you approach someone who works for themselves, rather than for a law firm, since sole proprietors are more able to make exceptions. Finding a patent agent or attorney who is particularly interested in your technology area is also helpful, because such a person is able to make a more informed decision about the startup's likelihood of success. Of course, it also helps to find someone who is working with other clients who pay in the traditional manner, giving them the ability to consider non-traditional payment methods without severely impacting their bottom line. I also generally set a limit on the number of hours I will work in a month on work that is being paid in equity. In summary, you need to find the right person who is willing and able to accept alternate payment terms, which may take some time, but is probably worth the effort.

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