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Any advice on procuring basic startup legal counsel to help with a seed
round? It seems standard hourly fees for well-known, good corporate
attorneys are pretty exorbitant (700+/hr), deferred payment or not.
I'm in Boston.
I am a law student in Vancouver BC, and I have had the good fortune of
working with/at some of the big firms here in Canada. Although I may not be
able to help you directly, I might be able to steer you in the right
My first bit of advice is to spend some time figuring out what services you
need, and what services you do not. I see a lot of legal fees being paid
out that I know could have been reduced by half or more had the client and
lawyer come to a better understanding of what needed to be done. In my
view, this is usually the attorney's fault, although they are always loath
to admit it.
Second, you should be able to find an attorney who will give you an hour of
their time (for free) to sort out the issues I mentioned above. If they are
not willing to spend the time to build that trust and win you as a client,
Third, you should be able to find an attorney who can do the work for
almost half of that rate. Seed rounds are not complex, and are in fact,
common transactions, and commonly handled by junior associates who are
often billed out at the sub-250/hr level.
My advice when seeking legal services is to never forget what you're paying
for. Getting your teeth cleaned is going to cost far less than getting a
bridge done - so why would you pay the same hour;y fee for a lawyer to
draft a standard form contact as you would for him to undertake complex
Hey Christina - Check these guys out: dailygeneralcounsel.com. I met them
at an event so I don't know if they're any good, but their model is
interesting: one flat day rate to handle your most pressing legal issues,
and they try to minimize follow-up. Plus they're local to Boston and know
the scene around here.
Seconding Matt's comments... find someone who's done a trillion of these before and can sneeze out docs. It shouldn't cost you more than a couple thousand to create and process a convertible note... more for equity. But they should be able to defer until you get some reasonable equity into the company. $700 * 1 hour + $250 * 4 hours is way less expensive than 20 hours * $350 if you know what I mean. Plus, they should be able to provide counsel that could help you avoid lots of problems down the road. I use a mid-size Bay Area firm and for something like $3K (deferred), they've put together a convertible note, formed a DE C Corp, and a few other things. I'll penny pinch on stupid shit like USB cables but not a startup lawyer.
On Jan 16, 2013, at 3:42 PM, Christina Bognet <cbog...@gmail.com> wrote:
I highly recommend my attorney Marti Ashcraft. Marti is a practicing attorney in Nevada with over 30 years of experience in business/corporate law. Marti has done many corporate formations for startups along with private equity funding.
Her website is www.ashcraftlawyers.com if you would like more information.
Should you have any questions, please feel free to give me a call at your convenience.
CEO - Founder
Rocket36 Dev Studio
O. (702) 242.6097
M. (702) 427.6703
F. (702) 242.6089
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On Jan 16, 2013, at 3:42 PM, Christina Bognet <cbog...@gmail.com> wrote:
Thanks for all of the great advice. Mike's remark about paying the same
hourly rate to get your teeth cleaned vs. a bridge was along the lines of
why I wasn't so willing to pay a great startup lawyer such a high fee. Just
didn't seem worth it, but it does like there are varying opinions on how
crucial having The Best Lawyer Ever is, especially at an early stage.
An interesting read, for what it's worth:
I can definitely recommend Joel Kinney he is in Boston and specializes in
start-ups and has an independent practice so you get really good value plus
he is plugged into lots of other great people in the Boston start-up
Details: Joel Kinney - j...@fortpoint.me
1) There is a concept in business that your business to a providers should be important revenue amount, only then you will be valuable customer to them. So try to look for providers (lawyers included) who are a same size as you. Why expensive layers are expensive? One reason is because they are over subscribed with customers.
2) In a small or individual law practice, lawyer that does the work only have to make enough money for himself and his support stuff and doesn't have to make money for a big firm partners. So smaller the firm the more likely they can provide services for less money.
3) Part of doing business is being proficient in business law. Nothing that lawyers do as far as document preparation for company formation and Angel, Seed or other rounds of funding is so rear and exotic that only few lawyers can put them together for only few companies. There is a mountain of copied over and over documents for hundreds of thousands of companies. Laws do change and new rulings come down from the court, but all that info becomes publicly known immediately.
4) Don't hire anyone, including lawyers, that doesn't specialize in doing what you need to be done. Or you will be paying for their education, not their work.
So why lawyers charge so much? It's because they charge for your fear and stupidity. Not everything that lawyers do is on the same level. For instance being a trial lawyer is much higher level of law profession, but paying a lawyer for document copying is just stupid.
What I have done is I negotiated a set low fee for document review and correction ( $12.50-$25/page depending on rarity of the issue). So I ask my lawyer if he has a particular document ready or not, if he does he know that he can't charge me more than my negotiated review rate per page. And a lot of times I get them for less than review cost. In a rear case that he doesn't have a ready document I find multiple versions on the internet then read about it from law blogs and publications, put my own together or reuse one that I found as is and send it over to an appropriate lawyer for review for a set low fee just in case there is a new ruling came out that didn't hit the Internet yet.
--- On Wed, 1/16/13, Christina Bognet <cboghttp://groups.google.com/group/founderdating?hl=en.
I worked with John Hession at Cooley for my first company for 6 years. He was my corporate attorney, and continues to be my mentor. He is an awesome guy and really understand startups. John will invest some time upfront with you before signing you onboard to see whether the two of you are a good fit. In order to work on a lean and tight budget, John or his assistant would send me the docs. I would edit them on the first take and have John only do the final take spending few lean mins. John also assigned one of his low fee attorneys to help offset the costs in the first few years. He would jump in as and when needed without charging his high fees.? The other important things that John brought to the table was his rolodex of investors and industry contacts. And then I would get free invites to lots of industry events due to John's connections and that cooley sponsored events around in the Boston area.? Both these points matter a lot when you run a
startup. Check him out at http://www.cooley.com/jhession and I am happy to make introductions if you would like. I strongly recommend that you speak to 2 or 3 attorneys to see who you like personality and energy wise.
I would have had John again except that I moved to the bay area and now work with Larry Low at Orrick, another awesome guy.
Hope this helps.
> From: Max <alphaon...@yahoo.com>
>To: founderdating <[removed to protect privacy]>; Christina Bognet <cbog...@gmail.com>
>Sent: Wednesday, January 16, 2013 11:48 PM
>Subject: Re: [FD Members] Startup lawyers
>1) There is a concept in business that your business to a providers should be important revenue amount, only then you will be valuable customer to them. So try to look for providers (lawyers included) who are a same size as you. Why expensive layers are expensive? One reason is because they are over subscribed with customers.
>2) In a small or individual law practice, lawyer that does the work only have to make enough money for himself and his support stuff and doesn't have to make money for a big firm partners. So smaller the firm the more likely they can provide services for less money.
>3) Part of doing business is being proficient in business law. Nothing that lawyers do as far as document preparation for company formation and Angel, Seed or other rounds of funding is so rear and exotic that only few lawyers can put them together
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