As someone hoping to assist clean green innovators see their sustainable ideas germinate and flower in our local communities, I was curious to understand the challenges these entrepreneurs face in securing access to legal or professional services. Having recently been asked by the International Bar Association to present my experience with social media at their annual conference, I thought it made sense to try and find some answers to this question by starting a LinkedIn discussion group.
To my wondrous surprise, a few other people have given some thought to this issue as well. I don't know if we came to the most authoritative of conclusions, but I think some important points were raised and discussed. One contributor even kindly created a direct link here to the full discussion for other members of LinkedIn. However, if you just want the highlights, here is what I learned:
- Fee Structure: A fixed price for advice or at least a base price for templates would help start-ups with cost certainty and management of their cash flow (subject to complexity of the task at hand). Entrepreneurs also suggested they would (i) be willing to do some legwork themselves in order to reduce legal fees; or (ii) like to see service professionals work on a delayed gratification/sweat equity model. A more innovative approach is to request bids from lawyers on Elance, thus taking advantage of the large cohort of legal professionals that may still be under-capacity in the current economy.
- Lawyer Selection: Trust is a key aspect of the lawyer-client relationship and referrals help to build that early on in the process. Seeking those referrals from local funding sources is a good way to stay in their "sweet spot." However, some people are apparently willing to use LinkedIn as pool of potential providers. Perhaps those lawyers benefiting from effective recommendations are in a good position to attract these seekers. And in the case of start-ups looking to places such as Elance, they should do their due diligence by asking for credentials and references.
- Services: Some of the more common legal requirements of start-ups included (i) non-disclosure agreements; (ii) patent or trademark protection; and (iii) employment contracts.
- Timing: Legal advice and tailored agreements are sometimes overlooked in the early phases of a start-up, but having them "in place at the very beginning is paramount" and "day [one] of a start isn't soon enough for legal." At the same time, experienced founders suggest they may be able to wait until the "right time" before seeking legal advice. Perhaps a rule of thumb for the less experienced entrepreneur is to have a lawyer join the team as it is ready to incorporate, especially if there are multiple founders or investors involved. One tool that was suggested was to check this post: http://startuplawyer.com/incorporation/the-when-to-incorporate-decision-matrix