A Challenge To Startup Lawyers

I'm a "startup lawyer" in a different sense - I am a sole practitioner in the worst legal job market in our country's history that has been forced to get out there and find my way without a map. It's tough, but just like any other startup you get out of it what you put in - hard work in school and hard work on the ground have put me in a position where I can get by and probably pay my student loans off in 30 years or so.

Let me say that again. I will probably be able to pay my student loans off in 30 years or so. I have an LL.M. in tax and am hustling for every dime I can get.

The lawyers you're working with in a transaction like this are doubtless badasses. They work for a big firm, in a tall shiny building, with sexy secretaries and bookish paralegals. They have continuously updated libraries, and conference rooms, and expensive subscriptions to LexisNexis and Westlaw. They wear $1000 suits and fly to meetings on a private jet. These things cost money... lots of it.

As a VC investing in startups, you know you have the choice in which companies you trust. The same can be said for attorneys. If you choose flash over substance, you're going to end up paying big bucks every time.

Should it cost $17,000 for a transaction that probably didn't take more than a few hours of an attorney's time? Nope. Whose fault is it that it did? As with any product, the lawyers you've selected are charging what the market will bear and billing you what they know you'll pay.

Spend some time finding an attorney that you can trust that cares more about doing quality work than a fancy office. In NYC, there are some really amazing LL.M. programs - find a recent grad from a tax program. They're certainly able to put together a 'standard' deal and incorporation, and are better equipped to help a startup plan intelligently anyway. They'd be thrilled to have the business and the experience, and you'd get much better service at a reasonable price.

And if you ever decide to invest in an Indiana company.... look me up.

Over the past few years I've come to the conclusion that the vast majority of law firms actually commit legitimized fraud on a daily basis. There are a few honest lawyers who actually take pride in their work (but who probably still charge more than their time is really worth), but there are many, many lawyers who are simply well-dressed scam artists.

New company documents should cost $0. Each VC firm should purchase the rights to the document templates up-front (or hire a general counsel full-time and draft their own!) and use them again and again.

Would this put a lot of lawyers out of work? Yes. Do they have loans to pay? Probably. Is that your problem as an entrepreneur or a VC? No.

Maybe this kind of system would encourage Americans to actually build things, instead of going to law school.

I actually feel so strongly about this that I'd be willing to contribute my knowledge (mostly in the trademark realm) to a group of pro bono non-lawyer entrepreneurs who have dealt with all of this stuff before. There's a lot you can do without actually being a lawyer. I even have a name and domain picked out for the group. Feel free to get in touch if you're interested.

Brooklyn Law Incubator & Policy Clinic (BLIP) offers a full-service, pro bono law firm for NYC tech startups and policy initiatives.

* http://www.brooklaw.edu/academics/clinicalprogram/theblipcln...

I was privy to several buy-sell transactions and it certainly seemed to me that attorneys regularly use "shelf" documents to frame the deal and have their legal secretary just change the names of the entities from past transactions and then tweak a few clauses. Lots of work on the schedules but just drafting deal documents should not cost $15K. I even had one lawyer comment when sent an asset purchase agreement that he was the original drafter of the document several years previously. He literally said,"Hey that's my APA".

I do the majority of my legal work for Fortune 100 companies, and do some work with tech startups, which I approach very differently than any other work: a lot of the time and effort I spend on them, probably the majority, I don't bill for. I just consider that part of the deal, knowing they need a lot more time and basic advice and have very little budget. I consider it part of the trade-off for establishing a relationship with a new client that might really grow and turn into a steady new source of business, though that's not usually the case; but aside from that, it's made up for by the unique excitement of working with a startup

Legal fees are negotiable. Next time ask them to do it for a flat fee of $5,000!

Question for YC folk, it says in the application "After you're accepted, we'll immediately get to work helping you set up your company, if it isn't already."

What does this cost or do you provide it as part of the package?

I'm looking for a good and reasonably-priced lawyer in the San Diego area to help us with software IP for a startup.