Anita Campbell has an interesting post that covers small business owners’ net satisfaction with lawyers. She writes:
Don’t just take my word for it that business owners have confidence in
their attorneys. A recent survey by the National Federation of
Independent Businesses (NFIB) found that small business owners in the
United States rely on their lawyers for help — and generally seem
satisfied with the help they get.
Having worked with (and negotiated against) numerous lawyers, I have to say that good lawyers are precious.
That said, and while I have not dissected the study, there are some additional considerations that I see as applicable to startup businesses because legal bills may not be cheap (just as the lawyers chant out, "an ounce of prevention is worth …"):
- Try to get smart on when you really need a lawyer ("do you know a real business/personal risk when you see one?") – Easier said than done, but I have seen some early organizations rack up tens of thousands of dollars in legal fees before coming out of the gates with anything but a stack of legal documents (not even the sales pipeline, marketing pitch documents, or product concept). Keep your eyes open for warning signs. Sometimes it takes time to coach your lawyer to help you maximize entrepreneurial opportunity while mitigating risks appropriate for where you are at companywise. Lawyers are about minimizing risks. Entrepreneurs are about maximizing opportunity. Work on getting the balance right very quickly.
- Try orienting your lawyer around deal flow – All businesses have risks. Small businesses cannot afford Fortune 50 company-style legal protection. At least they can’t afford this up-front. Consider orienting your lawyer around a staggered plan. For example, for your first big deal, you may want extra review of certain areas of deal documents. Once things are rolling, you can come back and put in more complete deal document review and legal document portfolio creation. The total nominal cost out may be more in the long run, but the cash out flow will better match the cash in flow.
- Entrepreneurs that do not manage their lawyers closely in the early stages of a relationship may be setting themselves up for a shock – Anecdotally, I have seen "first bill from a lawyer" shock many entrepreneurs and kill the trust relationship on both sides. Given the professional services relationship, one would think that this would work itself out and get structured right from the beginning. That said, I think entrepreneurs get too comfortable letting lawyers worry about all the risks. In the end, entrepreneurs end up failing to watch the relationship closely up-front, and bridges can get burned.