Startup SuperLawyer

Ryan Roberts (http://startuplawyer.com) is based in Dallas but would still be a great option for you.

Bill Broussard is a longtime friend in Austin who has a lot of start-up experience as both outside- and in-house counsel. http://www.linkedin.com/pub/william-broussard/0/660/a61

Some questions I'd ask, having been on both sides of the table:

1. For approximately how many start-ups have you been lead counsel for (a) incorporation / LLC formation, (b) angel funding, (c) Series A-[n], (d) IPO? How many in the last two or three years?

2. References? Any clients we've heard of? (The lawyer might not be able to tell you s/he represents Client X if it isn't a matter of public record.)

3. Any litigation experience? (Other things being equal, give me a lawyer who has tried cases - it changes your perspective quite a bit.)

4. Any in-house experience? (In-house lawyers often get some valuable lessons about business life that you just don't get in a law firm.)

5. [EDIT:] Your billing rate? Likely total cost of this matter? Do you do any fixed-fee work for specific types of project?

6. Whom do you use as backup? (Even in a law firm there can be de facto sole practitioners.)

7. Who will actually be doing my work, what kind of background does that person have, and how much work do you do with that person? (An associate who gets a lot of work from Partner X might be just fine, because (i) s/he will have an incentive to keep Partner X happy so the referral work keeps coming, (ii) Partner X will probably talk to the associate a lot, meaning Partner X can ask how your matter is going and may well do a lot of day-to-day mentoring, and (iii) chances are the associate can get ahold of Partner X whenever needed.)

8. How often do you bill? (Some firms bill quarterly, which might be fine, but most companies prefer monthly so as not to get unpleasant surprises.)

9. Is it feasible for us to establish a fee level where you'll call me if you're going over that level? (This is a tall order for many firms' billing systems, but it can't hurt to ask.)

10. [EDIT:] Is your usual inclination (a) to try to negotiate the maximum possible concessions from the other side of a deal, or (b) to accept a good-enough deal quickly and move on? (My experience has been that option b is usually preferable, especially if you're negotiating with someone with whom you're likely to do business again.)

11. [EDIT:] Will you call me with updates, or should I be calling you? (Good lawyers are busy and might not always take the time to provide real-time updates.)

12. [EDIT:] Do you carry malpractice insurance? (Some sole practitioners don't.)

The first round we raised, which was around $500k, we paid $65k in legal fees. Our lawyers spent 2 weeks in conference calls with the investors' lawyers, so we were getting billed anywhere from 4x to 6x their individual hourly rates (600-900/h for partners and 350-650/h for associates) for these conversations.

Part of the problem stems from the lawyer mentality that they are meant to be going to war for you. Although everyone in our deal was completely amicable, they spent countless hours haggling over trivial points to "help" us while losing us far more money in their fees.

What I would like from a dream startup lawyer would be:

  * Document templates for all common funding/employee/equity situations
  * Work done by single, highly qualified lawyer
  * An understanding of what actually matters to (and is best for) startups
  * The ability to short circuit conversations with the opposing lawyers
  * Lower costs by reducing irrelevant overhead (fancy offices, etc)

I'm less fussed about 24h availability and don't care whether someone will cancel their dinner plans to work on my case, but I can certainly understand how the author of this article would be pleasantly surprised when he got those things as well.

Someone could charge me twice what a normal partner was charging per hour, and I'd gladly pay it if they did the above, since they would be far more than twice as efficient.

Sure, I would characterize the exorbitant fees on a "per interaction" level. As another commenter mentioned, a large deal can have huge fees associated (and much of this is about how big the term sheet is and how many minute details are involved). Some of this can be mitigated by requesting a very simplified term sheet from the VC/angel firm you are working with, but what bothered me more was the costs for small asks.

What I found was that with some lawyers, every email and every phone call (no matter how short) will add hundreds of dollars (emails are rounded up to 15 minute increments). Thus, whenever I can, I try to negotiate a fixed fee to get a particular item done (incorporation, fundraising etc) and then I don't have to worry about every minute of time and what that translates to in dollars.