This is part of my Series on Entrepreneurial Culture.
The classic Warren Zevon refrain, “Send Lawyers, Guns and Money”, could very wellepitomize the attitude many first-time entrepreneurs take on when launching their companies. In fact, I’m asked the question, “Which lawyer should I hire?” so often that I decided to share my quick thoughts on this matter.
In my opinion you actually do not need a lawyer. What you really need is a successful serial entrepreneur to be your mentor. She or he can help you not only with incorporation but with all the other issues you’ll be facing as you launch the new company.
In a nutshell- hold your fire and save your money.
Nowadays it’s a breeze to incorporate online and there are services such as Legal Zoom and others that remove any need whatsoever for engaging counsel. Furthermore, standard Operating Agreements are widely available and figuring out whether to start an LLC, an S Corp or a C Corp or what state is best suited for your newco basically involves a two minute conversation with your mentor. To pay a lawyer a handsome retainer and hourly fees to help you with any of these issues is a complete waste of money in my opinion.
If you don’t have an experienced mentor to help you and absolutely insist on hiring a lawyer, please remember that these services are a commodity. You should only work with reputable, respected lawyers that primarily work with start-up companies and who are well-regarded in your local entrepreneurial and investment community. If you go elsewhere you will most likely be shelling out thousands of dollars for the usual rigmarole. Reputable counsel will help you set things up inexpensively and will be a resource that is available to you as you grow your company. Their value will manifest itself once you actually have a revenue-generating business and are perhaps raising your first round of institutional funding.
I of course welcome you to share your thoughts and experiences on this topic.