Quality legal representation is crucial to a startup’s success.
In addition to Day 1 Legal Needs highlighted above, the legal team also helps the company manage risks around employment issues, data privacy compliance, stock insurance, and importantly, negotiating terms for the company’s future financing rounds. Great legal partners are not only good at executing legal matters, but they’re also business savvy, and able to make sound recommendations that thread the balance between meeting critical compliance requirements and the speed and operating efficiency demanded at early stage startups. Not all law firms are equipped to meet the needs of a startup, but there are several reputable firms that offer startup programs focused on cost efficiency while having the breadth (i.e. can they help you with global employment issues?) and depth (i.e. specialized patent review for your domain) to help companies scale, including supporting through an initial public offering (IPO) event and beyond.
Here are some sample questions to ask when interviewing law firms from CooleyGo: “How to Choose a Lawyer for Your Startup”.
We recommend law firms with a strong presence in Silicon Valley - these attorneys tend to be in tune with the latest venture sentiment, have seen cycles of boom and bust, and can provide insights and advice on how to navigate the current venture landscape because they have worked with hundreds, if not thousands, of startups before.
Switching Law Firms
When switching law firms, the new legal counsel may ask the company to convert certain corporate documents such as the bylaw and equity incentive plan into the new firm’s standard template. The rationale for adopting the new corporate forms is to increase efficiency on future legal review since the team is already familiar with their in-house templates. Keeping the existing set of documents from the previous law firm will likely result in inefficiencies (i.e. time and costs) and unnecessary complications in the future.
There’s no harm in switching corporate forms at the recommendation of the new counsel. Founders should agree on expected costs for the change in advance.
⭐️ Pro Tip: when working with attorneys (and any professionals that charge by the hour), it’s always a good idea to establish scope (in terms of estimated time required) in advance.