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  • 5 People You Must Have on Your Startup Team

    Game Plan

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    Attorneys

    Venturing into the business world without a lawyer is a bit like driving a car with faulty brakes. You may succeed in getting where you’re going—but the unnecessary damage along the way will probably cost you.

    The Playbook contains a number of topics devoted specifically to legal issues of emerging companies: choosing the right business structure, protecting intellectual property, drawing up contracts and agreements [link], and complying with state and federal regulations. We’ve also addressed the issue of whether to hire in-house counsel or employ an attorney on an as-needed basis.

    In this article, we’re assuming that your emerging business does not have the budget for a lawyer on staff. But still you should have the benefit of a legally trained advisor to help with your strategic plans. Having a lawyer on your team can help in three ways: risk management, networking, and strategic vision.

    Risk management is the most obvious, so let’s start here. Lawyers are trained to spot potholes in the road long before you encounter them. In fact, the best lawyers for start-ups are the ones who specialize in emerging businesses—in your industry. So presumably they’ve been down your particular road many times already.

    For example, they can spot a particular term or clause in a “standard” employment contract that caused trouble for other clients—and advise you on how to fix it. Or, if you are planning to grow your business significantly, a good start-up lawyer can advise you on how to structure your compensation and benefits, right from the beginning, so there won’t be a problem granting company stock to friends-and-family investors when the time comes.

    In fact, many lawyers are so good at risk management that they end up frustrating business owners—because it seems like they say “no” all the time. By definition, entrepreneurs take risks. That’s why it’s important to find an attorney who understands your risk profile and gives you the right amount of leeway and support.

    Networking may not be the first thing that comes to mind when you think of attorneys. But consider that lawyers who specialize in start-ups also get to know—and work with—bankers, investors, accountants, and other professionals who are in the ecosystem of emerging businesses. If your attorney is the social type, you may get tips about relevant conferences, or invitations to meet and swap information with other clients.

    Strategic vision: The best start-up attorneys understand the potential of your business idea within the context of your industry and the current and emerging business environment. They help you envision realistic short- and long-term goals and have an idea of the path you’ll have to take to achieve them. Many start-up attorneys choose their specialty based on their affinity with innovators, so it really is possible to find one who can support your strategic vision. Business owners in this situation say it is like having a second mentor—with legal skills and experience.

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    • Writing on Technori, attorney-author Desiree Moore says, “A great lawyer will support your business efforts, protect your financial and intellectual property, minimize risks, and ultimately save you money down the line. In fact, no thriving company can go without.” Her article, How to find the best lawyer for your small business, can be found here.
    • Nick Allard, who works as professor and Joseph Crea Dean of The Brooklyn Law School, provides an insightful distinction between good start-up attorneys and the bad ones. He writes, “The startup lawyers who fail say, ‘No, you can’t do it that way.’ And they say no all the time. Those who succeed answer every problem with ‘this is what you can do’ instead of ‘no way, impossible.’" His complete article can be found here.
    • Finally you’ll want to use as many trusted resources and recommendations as are at your disposal to help you choose the start-up attorney that’s right for your business. If you need a place to start, there is a directory of recommended start-up attorneys in major cities in the U.S. It’s the work of blogger Giff Constable, who based the listings on recommendations from other entrepreneurs.