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Choosing the Right Attorney Is Just as Important as Choosing the Right Investors. Here's What You Need to Ask Before You Hire One. These are the six important questions to ask a startup attorney before you hire them — and the reasons why you need to ask these questions specifically.

By Mital Makadia Edited by Kara McIntyre

Key Takeaways

  • To ensure a successful partnership with a startup attorney, ask them questions to gauge whether or not they have the expertise you require. If so, you'll be working with someone who will advocate for you and the interests of your startup.

Opinions expressed by Entrepreneur contributors are their own.

For startup founders, choosing the right attorney can be as important as choosing the right investors. Startup attorneys act as counsel when startups invariably encounter problems like copyright and intellectual property issues. They will also shepherd clients through any mergers or acquisitions, making the right attorney very important to the bottom line. You'll need an attorney who's well-versed in law and has a deep understanding of startup landscape intricacies.

There are several important questions to ask before you hire a startup attorney:

  • What percent of your clients are startups?
  • What percent of your clients are venture capitalists or other investors?
  • What areas of practice can you help with?
  • How do you handle it if I need help in an area you don't practice?
  • How long has your firm been around?
  • What is the typical size of your clients?

Here's what kind of answers you can expect and why the questions are important to ask.

Related: Read This Before Hiring a Business Attorney

1. What percentage of your clients are startups?

Many attorneys try to serve the startup space, but they just dabble in it. Startups need lawyers who know the law, know the market, know the players and have the capacity to keep up with changes. A general practitioner does not have that depth of knowledge.

Particularly when dealing with investors, startup lawyers can advise on the investment terms presented by VCs. VCs are professional negotiators. You need someone on your side who's had a similar number of term sheet negotiation experience.

2. What percentage of your clients are VCs or other investors?

VCs/investors are repeat customers for startup lawyers. Startups usually are not. If it's a choice between taking positions that would alienate VC clients or startup clients, the financial incentives are not on the side of the startups. As a startup founder, you need a lawyer who will vigorously advocate for your interests, negotiate assertively and prioritize your needs, even if it means ruffling some VC feathers.

We have seen many in-demand startups and founders give away their negotiating leverage because they are advised by counsel to accept "market" terms. While you want a lawyer who knows what "market" is, you also want one who can recognize your position and get you the best possible terms within your negotiating leverage.

3. What areas of practice can you help with?

Know what you are getting into. No one lawyer can do everything for a startup. You'll likely need assistance with general corporate work, financings, commercial contracting, employment and some types of IP work. Prior to hiring a startup lawyer, ask if these areas of expertise are in their wheelhouse.

Related: Why Business Lawyers Are a Necessary Expense

4. How do you handle it if I need help in an area you don't practice?

You want a lawyer who will be honest enough to tell you when something is outside of their areas of expertise; the lawyer should also take it a step further and tell you when it would be more cost effective to consult with a specialist.

For example, many startups have to deal with regulatory issues: compliance, business structure, taxes and privacy, to name a few. Be sure to identify someone who has relationships with specialists and can provide warm handoffs to them.

5. How long has your firm been around?

Many attorneys put up a shingle to target the burgeoning startup market. Just as quickly, however, they disappear. We've had many clients come to us scrambling after finding out their startup lawyer is going on a sabbatical or transitioning to advisory services. If you are looking for someone you can trust to be there for the long haul and who can provide continuity, look for a firm that has a long history and solidified its place and reputation in the startup space.

6. What is the typical size of your clients?

There's a big difference between representing founders at the incorporation stage versus representing a mature startup on the precipice of an IPO. Some attorneys are more adept at providing guidance for specific stages, so identify one who has significant experience with startups at your stage of development.

Additionally, if you are at the founding stage and your lawyer represents mostly late-stage startups and public companies, be certain to ask how much of your attorney's time and attention you can expect.

Related: Ask a Startup Lawyer: How Should You Manage Co-Founder Equity?

The bottom line

To ensure a successful partnership with a startup attorney, ask them questions to gauge whether or not they have the expertise you require. If so, you'll be working with someone who will advocate for you and the interests of your startup.

Mital Makadia

Entrepreneur Leadership Network® Contributor

Partner at Grellas Shah LLP

Mital Makadia is a partner at Grellas Shah LLP and co-founder of startup dispute mediation service Solvd4. A TechCrunch-verified lawyer, she provides counsel on a variety of corporate and transactional matters, equity financings, M&A and commercial and intellectual property for her clients.

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