Legal Practice #8 - What else can your lawyer do for you?
Start ups should ask their lawyers to leverage their network to find better funding opportunities, better partners and potential new clients.
Starting up a company is hard. No one denies that. I wrote a post back in November on the importance of involving a lawyer in the early stages of the company in order to have the proper corporate and tax structure, have your IP protected and with all the necessary authorizations, contracts and permits in place for the operation of the business.
But lawyers, specially big firms, can do much more.
In an era in which fees arrangements are changing for everyone, law firms should try to be innovative about other revenue sources they should explore and use their knowledge of the industries and their network to leverage it. Every law firm should ask themselves: What else can we do for our client?
For instance, some firms, specially those established in California, is taking equity positions in start ups in exchange for legal advice, setting up a kind of private equity subsidiary of the firm that will hold this interests and will distribute the profits for the general benefit of the firm.
This is obviously a very risky "bet" on the company's success and the firms need to have the capacity and the appetite for that risk, but it is "free". Firms are providing very low-cost advice to start-ups right now. Why not include an equity retribution?
Additionally, start ups should ask their lawyers (whether they have an equity stake or not), to use their network to foster relationships and boost the client base. Referrals have always been (and will always be) the best marketing campaign, so lawyers should try to connect clients to form relationships that benefit the 3 parties. The clients will get an operational benefit; the firm will consolidate the relationship with both clients and help them with the transactions. It's a win-win.
Lawyer's market knowledge and capacity to connect the dots can be a great opportunity for startups to grow.
So, how are you helping your clients?