5 Reasons Startups Need to Lawyer Up

“Do startups need a lawyer?” This is one of the most common questions I often get asked.

While you may not be obliged to hire a lawyer as a startup or business owner, there are many compelling reasons to engage a specialist’s help when managing your business. However, as a fledgling company, you might not always have the resources for legal help, which is why it’s important to assess the available options and make the best choice for your startup.

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What does a startup lawyer do?

Before hiring a lawyer, it’s best to understand their role in your startup. Startup lawyers have specialised knowledge and can provide invaluable support in navigating legal complexities, identifying and mitigating risks, protecting your business interests, and facilitating company growth.

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They can help you from the very beginning, assisting you in establishing a corporate structure and managing your employment contracts to creating and protecting your intellectual property (IP). They can also oversee any third party services agreements, terms and conditions, privacy policies, protection of customer and client data, and more.

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Simply put, startup lawyers are all-rounders and can address whatever legal need a startup deems necessary to build and grow the business. In the long run, they can even help you save money by helping you avoid mistakes that may have costly consequences.

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Advantages of hiring a startup lawyer

There are several reasons startups need to have a go-to legal counsel for their company.

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Startup lawyers bring legal expertise and add value to your business.

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Startup lawyers bring specialised legal knowledge to the table, helping owners navigate the legal complexities of starting, organising, financing, operating and growing their business. They can give tailored advice to entrepreneurs from business formation and fundraising to intellectual property protection and contract negotiation.

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Additionally, an experienced startup lawyer knows when to put the business’ best interests forward. For example, they can negotiate down deals if the investor term is not market or register an IP immediately to create an asset for the startup. By going to bat for the startup, startup lawyers provide value to the business; and, this in turn, puts money in the pocket of the founders.

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Startup lawyers mitigate risks.

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A startup lawyer plays a crucial role in risk management, helping business owners identify potential risks and come up with strategies and solutions that can help minimise liabilities. This includes protecting your company against future disputes by creating effective contracts and agreements, assessing regulatory compliance, implementing policies and procedures to minimise legal exposure, and more.

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Startup lawyers help protect intellectual property.

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Startup lawyers offer valuable support in safeguarding your assets, including your IP. They can advise you on which protections are right for your needs, assist with trade mark registration, apply for patents, safeguard trade secrets and oversee licensing agreements, joint ventures, and partnerships related to your IP. Most importantly, they can help you defend your rights in instances of infringement.

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Startup lawyers help ensure regulatory compliance.

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Startups must adhere to a variety of laws and regulations, which can differ depending on factors like industry and location. Failure to comply can have serious and expensive repercussions. With the help of a startup lawyer, startups can safely navigate these legal complexities and get advice on compliance.

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Startup lawyers can help business owners gain access to a useful network.

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Experienced startup lawyers offer more than legal advice—they can also help you connect with important contacts in the industry. These include potential investors, mentors, and advisors who can provide valuable insight and help you grow your company.

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How can startups get the most out of their lawyer?

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Hiring a startup lawyer may not always be a priority for companies that are just getting their foot in the door. After all, legal fees come with a significant cost. However, this can be seen as an essential investment and can help protect you from incurring financial loss in the future.

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To drive more value in your lawyer-client relationship, look for a lawyer who is willing to build a relationship with their clients. An experienced startup lawyer can be consulted for mentoring and guidance, and a gracious one can even open his contacts and network and make introductions on your behalf. They can offer additional training for you and your employees. All these add value beyond the bill.

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Plus, you don’t have to be afraid of negotiating legal fees. You can even ask for discounts or flexibility on payments. An experienced startup lawyer may even be the one to volunteer this. At Lazarus Legal, we make sure our fees are transparent and affordable for any growing business. Our fees are also flexible and we make sure to work it around your budgets and constraints. If we don’t discuss it, we won’t bill you for it.

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Deciding on a startup lawyer

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Startups may have other priorities and may not always have the financial capacity to hire a startup lawyer. However, tapping one may actually be more cost effective in the long run, especially if you are looking to build long term success.

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Hiring a startup lawyer will depend on the tasks that need to be accomplished, the startup’s stage, and the business’s budget. A good moment to seek assistance is when your products or services start to get traction or when you want to start raising money from possible investors.

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Remember that good business owners make educated and balanced decisions. Whatever your choice, hiring a startup lawyer early on can be a smart move for future growth.

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If you’re a startup or business owner and have any questions or want to chat about any potential legal risks, Lazarus Legal offers “Start Up Meet,” a free 15-minute consultation with one of our advisors so we can delve into what your business is all about. It’s a good jump off point if you’re unsure how a startup lawyer can benefit your business so you can focus on growing your company.