You’re a high-tech entrepreneur. That’s no small feat. It means you’ve gotten over the first and perhaps hardest hurdle of deciding to be an entrepreneur. You’re going to walk a different line. No employer and no paycheck. No guarantees. You’ll earn money if you build something that is or could be big enough to attract customers and investors. How isolated do you feel? If you’re like most entrepreneurs who came before you, you’re on a deserted island. What next?
You need to fill that island with partners and advisors.
Let’s talk first about the one folks least like to think about – lawyers. As you build your business, you have a mountain of concerns to focus on – your technology, your market, your customers, your competitors, your hiring plan, your corporate culture. These are all risks that you need to methodically address and take off the table as you build your business. A risk that you don’t want to (and your investors won’t want to) worry about is the legal operation of your business. That’s why you want to pick the right lawyer early on in the formation of your company. So, how do you do it? What should you look for?
First and foremost, you want a person with experience doing what you’re going to be doing – starting and growing a technology-based, investor-financed company. Youth is the norm in the start-up scene. That may be the popular view (but see here), but don’t let that influence your choice of counsel. You want a sherpa on the legal side of things. Someone who’s helped people scale this mountain many, many times before. Someone to guide you, not only on the legal side but on strategy and fund-raising.
How do you know if you’re talking to someone with experience?
Simple. Ask them. Find out how many companies they’ve helped form, how many financings they’ve completed, how many Board meetings they’ve attended, how many exits they’ve closed. Find out which investors they’ve worked with before. Look for high numbers of deals and work with top-tier investors. This won’t ensure you’ve got the right attorney, but it will help narrow the list. A little silver hair is here is an asset.
You want an attorney with real horsepower.
You want them knowledgeable about the law and about your market. Experience is a good proxy for knowledge, but they’re different things. Experience begets knowledge to those of sharp mind.
You’ve already screened for experience, but how do you test for sharpness of mind?
You do it with the thing you know more about than anyone else out there (or, at least, you should). Test them on how quickly and deeply they understand what you’re trying to build. If you’re a coder and they are not, don’t expect them to understand your stack. But, they should understand (and quickly so) why what you’re coding matters and what legal hurdles may lay ahead. Test them on the first so that you can trust them on the last.
Should you ask this person to join you on your island?
You’ve now found an experienced, knowledgeable attorney. Should you ask this person to join you on your island? It comes down to this — can you get value out of them? The only way to extract that experience and knowledge is through communication.
- How well do you and this lawyer connect?
- Do they actively listen while you’re talking?
- Do they explain themselves in a way you understand?
There is no magic test for this other than a good conversation. It’s human nature – you’ll know whether you’re connecting with someone. But, go beyond that. Connection alone could just be charisma. Be mindful of how they listen and how well you understand what they say.
How much do you matter to the attorney?
- Will they handle your work themselves?
- If they hand you off, will they at least stay very actively involved?
- Or, do they land you as a client, assign you to a junior attorney, and become rarely available thereafter?
This is hard to know in an initial interview. But, ask the question. Hear how they respond. If they need to hand you off, they will undoubtedly talk about keeping costs low, efficiency, etc. These are valid points, but it shouldn’t mean that you can’t reach out to them directly. You want access and responsiveness. The best attorneys give you both. Get them to confirm that they will.
There are certainly other things that matter – cost, contacts, name recognition. These are factors, but they do not touch on the key part of the relationship. At its heart, hiring a lawyer is about hiring advice. You need grounded, experienced, business-minded advice that you can trust so you can focus on building your business. Choose wisely and your island will quickly start feeling less deserted.
First Round Capital’s take on this topic here
A good article from The Muse here
VentureBeat questions to ask prospective counsel here
B-Plan article with additional questions when hiring an attorney here