Selecting professional advisors, including legal counsel, is one of the key considerations for any start-up. The business founders can not only enhance their chances for success, both short-term and long-term, but also can help the new business avoid costly mistakes. It’s often advisable to interview more than one law firm to determine the right fit and to factor in the following criteria:

Compatible Work and Communication Styles

In an age of instant communications, service providers such as attorneys are expected to be available almost all the time, and to respond to any immediate needs. It’s important to gain an understanding with the attorney(s) you’re considering hiring how they prefer to communicate with you and how likely they are to promptly answer calls and emails to resolve issues as they arise. Also, any new business owner needs to establish how easy or difficult it will be to meet face-to-face, sometimes upon short notice. Especially for start-ups, there’s often a need to address issues quickly to keep the business from going off course or to meet tight deadlines.

When interviewing lawyers for potential representation, the business founders should be clear on which tasks the lawyers will delegate and who will be the main contact points when there are any questions. More generally, to get a better sense of a lawyer’s work style and office management practices, it’s often a good idea to talk with past and current clients regarding their experiences with a particular lawyer and firm.

General Experience and Business Sector Expertise

Ideally, look for legal counsel that has experience in working both with start-ups and well-established businesses. Lawyers who work with new companies and the venture capital investors in those companies can provide guidance on how to manage the multiple challenges and opportunities that a new business confronts, such as forming the right legal entity, negotiating leases for office space, and drafting company policies and procedures. Finding a lawyer with extensive experience advising clients at all stages of a startup company’s life-cycle can save a client the significant costs associated with having to seek new representation at later stages.

The new business owner should also look for lawyers that have expertise specific to their industry. For example, if the company is in the biotechnology sector, a lawyer with relevant expertise may be better equipped to assist with regulatory issues, licensing arrangements, and various intellectual property issues.

Legal Fees and Billing Arrangements

For almost every startup, keeping extra costs to a minimum is a major objective. Law firms often offer a startup discount to their standard hourly rates, or alternative billing such as flat fees or blended rates.

Many firms also offer fee deferral arrangements in connection with the start-up’s formation of and early organizational work. However, the start-up principals should be aware that fee deferrals can cause clients and lawyers alike to have less communication about fees until the final bill is delivered, which can lead to misunderstanding about how much legal fees will ultimately be. If a deferral arrangement is made, it’s important that the lawyer and client agree to updates on legal fees being incurred. Having regular check-ins on legal fees can also be a good way for lawyers to provide progress reports and to strategize on future business goals for the start-up.

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