While we at Lazarus Legal have maintained that engaging legal help for your startup is crucial, we also understand that startups and business owners may not always have the financial capacity to hire lawyers.
As a lawyer myself, I know that getting the right legal advice at the outset is very important if you’re looking to start and protect your business. Still, I acknowledge that there are alternatives you can explore if you have limited resources.
When to use alternative resources
Startup lawyers have specialised knowledge and can address whatever legal need your startup deems necessary to build and grow the business, from establishing a corporate structure to crafting custom agreements to protecting your intellectual property (IP) and more. That being said, there are a number of scenarios when you can tap into alternative resources while you sort out your company’s budget for hiring a startup lawyer.
For simple legal documents
You might be able to hold off hiring a startup lawyer for basic legal needs, such as incorporating a company, issuing stock options, or drafting simple agreements. Keep in mind, however, that you may still need the help of a lawyer to review any documents you have drafted on your own.
Have previous experience with the process
If you or someone on your team already have a good grasp of your startup’s legal needs, you can tap this knowledge and accomplish some tasks on your own before hiring a lawyer.
As a supplement to legal advice
If you want to lessen legal costs, you may want to tap lawyers on an as needed basis. Startup lawyers may be willing to charge a lower rate to review and provide any modifications or additions to your draft they deem necessary.
How to Protect Your Startup Without a Lawyer
If you can’t afford a lawyer just yet, here are some ideas you can do in the meantime.
Talk to your family and friends.
Speak with friends or family members who have a legal background or expertise. Plenty of lawyers like myself will give their time away for free. However, expect that we cannot give general advice without proper documentation, though we can certainly guide you in the right direction.
Look up free resources online.
If you need templates for contracts and agreements, several online resources offer legal documents at no cost. For example, the startup accelerator Y Combinator offers SAFE (Simple Agreement for Future Equity) Financing Documents on its website that startups can modify to suit their needs. Still, it is best to consult with a lawyer licensed in Australia before using these free templates and forms to ensure you are not violating any laws in our country.
Read up on equity financing terms.
As a startup owner, you should be able to understand terms and valuations and learn how these all come together before negotiating with investors or facilitating a financing round. Talk to fellow startup owners and even experienced VCs (venture capitalists) to get their insights or add to your knowledge by reading books or online resources about legal terms and the mechanics of raising money. Books like Venture Deals by Brad Feld and Jason Mendelson, The Hard Thing About Hard Things by Ben Horowitz, and The Business of Venture Capital by Mahendra Ramsinghani are all good reads and can be used as a starting point.
Incorporate electronic signature processes into your workflow.
Being a startup or business owner entails signing several documents, including client contracts, partnership and license agreements, board consents, etc. To save time and streamline your routine, explore using electronic signature providers. Not only does it save you legal fees, but it also helps protect you from fraud.
When to Get Legal Counsel
As I’ve mentioned before, a good moment to seek the expertise of a startup lawyer is when your products or services start to gain traction or when you want to start raising money from possible investors. Angel investors and venture capitalists who want to invest in your business would want to know that it’s protected.
While you can forego hiring a startup lawyer, neglecting or failing to fulfil your legal obligations can be more costly than paying legal fees. If you don’t spend a bit of money on protecting your IP, getting trade marks or having a contract reviewed or drafted properly, you may face the consequences later on.
In other words, you are inevitably going to end up spending money on either defending litigation or proceeding. As a former barrister and knowing how much it costs to litigate, the best advice I can give is to get your house in order at the very outset. If you can, put some money aside for a consult.
Part of building a startup is identifying your legal obligations, and a startup lawyer can help you better understand these obligations. From licences to permits, a lawyer can help ensure regulatory compliance. They can help with the types of insurance or bonds that your business must obtain and help you be aware of your tax obligations and tax law requirements. They can also help identify potential risks for the business and strategise and find solutions to minimise liabilities and mitigate risks. Most importantly, they can help safeguard your assets, including your intellectual property, and advise you on which protections are right for your company.
If your startup is in the early stages of growth, you can begin with outsourcing legal work. Firms like Lazarus Legal offer legal help on an “as needed basis.” In particular, our Advisors on Tap service provides you with legal experts who can seamlessly integrate into your business operations for short to medium term engagements so you can minimise expenses. Our legal advisors and lawyers are available on call to work with you and deal with all legal matters so you can focus on your startup without worrying about your legal obligations.
If you’re interested in having an Advisor on Tap, Lazarus Legal offers “Start Up Meet,” a free 15-minute consultation with one of our advisors so we can discuss your legal requirements and identify how a startup lawyer can benefit your business. You can also read our blog here to have a better understanding of what a startup lawyer does and the advantages of having a go-to legal counsel for your company.
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