Navigating The Legal Matrix: Why Startups Should Lawyer Up For The Long Haul In a budget-conscious startup and SME world, lawyers can be seen as an expensive luxury item when compared with competing pulls on tight budgets, but this does not need to be the case if you find lawyers that "get" startups and early stage SMEs.
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This article was co-written with David Pang, Associate, Bracewell LLC, Dubai.
In order to "push the envelope," successful innovators explore ideas without limitations, often throwing conventional business norms out of the window– in fact, many of the world's fastest-growing companies began this way.
The pace of change continues to accelerate and brings with it novel innovations to products, services, and existing business models. Those that have succeeded have been disruptive and daring brands that sit outside of the "box." Whilst this brings with it significant opportunity, it also opens such concepts to legal scrutiny; for example, Uber continues to deal with licensing issues across the globe where there is not a simple one size fits all approach. Meanwhile, social media platforms such as Facebook and YouTube have had to grapple with intellectual property and data protection laws.
It is clear that numerous successful startups have had to navigate the legal matrix at one point or another, and more often than not, in a less obvious manner. Many struggle with the question of whether they should consult lawyers in advance or only when troubles arise, and the answer is simple: yes, they should, and as early as possible.
In a budget-conscious startup and SME world, lawyers can be seen as an expensive luxury item when compared with competing pulls on tight budgets, but this does not need to be the case if you find lawyers that "get" startups and early stage SMEs.
Despite common perception, clocks are not always running, and fee arrangements can be structured to fit in with your budget. Consequently, talk to lawyers, get them to share with you their experience of how things can be done correctly and how putting off difficult questions can risk torpedoing an entire business.
We prefer to establish trust from the outset in order to remain side-by-side a business as it grows for the future, and that means that we have to be willing to adapt to the business' needs in the present– and this includes fee arrangements.
It is important to remember that many lawyers are also business owners themselves. We know what it's like to feel that our business is at risk, and we share the same concerns about running a profitable firm. Trust that we understand this, and that any specialist lawyer with experience will be able to pinpoint exactly what sort of legal issues a startup has to deal with. Moreover, law firms have a strong network of contacts across the private and public sector that might be useful to your business too.
Lawyers can guide startups in answering critical questions, including how to protect ideas and concepts, how to deal with other shareholders in the startup business, how to attract and pitch to external professional investors if funding is required, how to enter into commercial agreements with other clients and suppliers and how to hire employees. We can help startups avoid simple mistakes that may come back to haunt a business in the future, and our experiences mean that we can problem-spot beyond legal issues, like strategic planning and operational issues such like human resources, which includes how to recruit, terminate and compensate employees.
Finally, in addition to acting for startups, established law firms also have vast experience working for publicly listed and recognized private businesses. While the scale and longevity of these companies might feel beyond reach at present, a startup's future direction is not set in stone, and we will utilize our expertise and experience in these areas to counsel each startup on the various growth possibilities and funding opportunities.
Nowadays, the size and stature of some startups rival, or even surpass, those of some of the world's most renowned companies. Having the counsel of a lawyer at an early stage will ensure that the right foundations are in place to help your business not only succeed in its short-term goals, but also thrive in the long-run.