Question
What exactly would we need to hire a lawyer for? It seems like most of the initial legal issues a startup might face are pretty standardized by now, including incorporation, term sheets ... I'm guessing there are a hundred similar startups filing their papers every day. What are the things for which they should really spend money on legal advice?
Answers: 2 public & 0 private
Nothing, or perhaps many, many things. To be glib, your startup could involve selling rocks on a street corner, and even then it might be advisable to speak with an attorney concerning business licensing requirements, depending on where that street corner is. Where did you get the rocks? On whose property is your rock stand? Is there any hazardous components within the rocks which could cause customers injury if, say, the rocks were broken? Do you have an employee selling the rocks, or is it just you? Whoever it is, do you have an agreement in place with him/her? Have you obtained federal, state, and local tax and withholding IDs such that necessary payments are made? Do you have a brand for your rocks? Is your use of that brand likely to cause confusion with another’s use of its brand for its own sales? Do you have any partners or co-owners? If so, how to do they share in the assets and liabilities, and profits and losses, of the enterprise? Are you advertising your business over the web or also selling / shipping rocks based on internet orders? What happens if [insert_regrettable_event_regarding_the_foregoing] occurs? This fake list can go on and on…
To your example, creating a business entity, such as a corporation, is prescribed by state statutes and regulations and thus is categorically “standardized” inasmuch as the filing forms and associated fees are standardized. However, charter documents (e.g., by-laws, or an operating agreement for an LLC) are most certainly bespoke, at least in material part.
IP assets warrant careful attention to clear and secure them. Few contracts can be completely boilerplate. A sound business plan will incorporate a budget percentage separate from insurance (say, 5%) for legal matters, whatever those matters might be. Most attorneys who routinely work with startups will have experience dealing with the fallout from improper / incomplete LegalZoom documents, effectively-orphaned intellectual property assets, and business behavior which is technically illegal. Corporate, IP, employment, real estate, transactional, internet, and investment matters, to name some, are things which have legal ramifications and thus deserve legal attention.
Legal assistance does not have to be prohibitively expensive, and particularly in this 2016 and age of the “sharing economy,” many legal practices offer flat fee and other progressive fee schedules to foster a productive attorney-client relationship.
It all depends on your situation. The type of startup you are doing including the product you are developing, the market you are aiming for and the strategy you are using to achieve your business goals. Once you have the broad brush strokes of what your business is and what it is going to do and where, you can start to look at what the legal requirements are for that and where the most value for your business is going to be added from legal advice.
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