Starting a new business can be intimidating for a first-time entrepreneur. The sheer amount of work necessary to turn your ideas into a full-fledged business can seem overwhelming and often insurmountable – especially if you don’t have the help necessary to facilitate your plans.

In these situations, it’s often highly recommended to consult the services of a startup lawyer. An experienced attorney specializing in business and startup law can not only help you with the initial planning and formation of your new business, but also ensure that your company has the protections, agreements, and legal requirements necessary to build a strong, secure, successful foundation.

What Does a Startup Lawyer Do?

Typically, when we think of attorneys, they usually go hand in hand with litigation and lawsuits. However, in the world of business, lawyers provide the assistance necessary to help your company follow proper procedures in opening a business while also staying compliant with any required regulatory practices. This includes:

Business Formation

A lawyer is not outright required to register for a business license, but the incorporation process may require their advice. An experienced attorney can advise you on:

  • When to incorporate your business
  • In which jurisdiction to incorporate your business
  • Whether to incorporate as an LLC, a C-corporation, or an S-corporation

As a first-time business owner, these decisions can seem difficult. A startup attorney can give you the counsel necessary to make an informed decision that aligns with your goals.

Shareholder Management

A startup lawyer may be able to advise you on all matters surrounding shareholders. This includes:

  • The number of shares to authorize
  • The number of shares to issue to yourself and any co-founders.
  • The number of shares open to issue to employees as an option.
  • Determining whether or not to implement vesting periods for any shares.

Additionally, a startup lawyer may be able to draft up any shareholder agreements or contracts that are required upon company formation or upon hiring employees.

Agreements

A startup business is built on contracts and agreements. These can include everything from employee contracts and non-disclosure agreements (NDAs) to purchase agreements, software-as-a-service (SaaS) subscription contracts, and terms of service and privacy policies.

Although general templates of these agreements may exist online, your business may require more customized terms to your agreement – along with any clauses or contractual terms unique to your startup. A startup attorney who has experience in agreements can assist you in revising any templated agreements, drafting up completely new contracts, or reviewing existing terms to ensure they are viable.

Intellectual Property

If your business was started based on an original, innovative idea, securing and protecting your intellectual property can be paramount to your company’s success. A startup attorney can help facilitate these protections, filing for any relevant patents, trademarks, and copyrights necessary to secure your product.

In the case of IP theft, an attorney can assist in drafting and sending demand letters, cease-and-desist letters, and may be invaluable as part of the litigation process in cases of legitimate infringement.

Litigation

There is a prevailing notion that startups have been getting more and more litigious lately – especially in highly competitive regions such as the Bay Area and Silicon Valley. For discretionary measures, it may be prudent to retain a startup attorney who is skilled in litigation so that you can protect your rights and prevent any future headaches.

Additionally, in cases of IP infringement, employment disputes, or any other potential legal proceedings, lawyers who have experience in business litigation will be invaluable to you and your business.

Do I Need a Startup Lawyer?

Although a startup lawyer isn’t necessarily required, they provide numerous benefits that you would otherwise not have on your own. Aside from the aforementioned responsibilities, startup lawyers can also help you with:

  • Negotiating partnership agreements
  • Negotiating joint ventures, mergers, and acquisitions
  • Securing commercial space for your businesses
  • Raising any funding or financing necessary for your business
  • Giving you valuable advice when needed

A startup lawyer can provide the support you need when you don’t have answers to the questions you’re asking.

Finding a Startup Lawyer for Your Needs

When seeking a qualified startup lawyer, consider the following qualifications:

Experience. Those who have a proven record of experience successfully managing the legal workings of multiple businesses is likely more qualified to represent your best interests than one who does not.

  • Transparency. The ideal startup lawyer will not only be open and regularly communicative about you and your business’s needs, but will also be transparent in their processes and filings. Additionally, a firm who is open about their rates and consultation offers is typically one that is more trustworthy than others.
  • Scope. While many startup lawyers are qualified and experienced in business law, some may have a narrow scope of specialty that makes them more capable in one field of startup law over another. For example, a lawyer who has extensive experience in commercial law may be able to assist you with purchasing office space, but they may not be able to help you in independent contractor agreements, buy-sell situations, or intellectual property protection.
  • Outlook. Some startup lawyers may be good at their jobs, but they often take care of their clients on a case-by-case basis. A truly exceptional startup lawyer understands that business law is not about cases, but rather forming a long-term relationship with a client. Many great startup lawyers begin advising for clients at the startup stage and continue to be retained even after the startup grows into a full-fledged business.

What a Good Startup Lawyer Can Do

A good startup lawyer not only encompasses all these traits but may have a different mindset that separates them from the rest of the pack.

  • A qualified startup lawyer can help provide legal support even if you have dedicated legal counsel hired in-house. They can find a way to provide benefit for your company without stepping on your legal department’s toes.
  • A great startup lawyer is one that provides counsel with the long-term ramifications in mind. This means not handling tasks on just a case-by-case basis, but rather understanding that all of your legal actions are working toward a singular business goal that you have determined.

A Qualified Startup Lawyer is Not Required, but Can Be Invaluable

Regardless of the state of your startup business, a startup lawyer can help you facilitate your needs in numerous beneficial ways. Even though you may have the capacity and competence to run your business operations on your own, a startup lawyer can make that considerably easier, often at a price point that is easily negotiable according to your needs.

Consider your needs before choosing a startup lawyer and maintain expectations and goals. By planning ahead of time for any future legal needs, you may help protect your vision for your business and prevent any unforeseen circumstances from standing in the way of your success.