How to spend it # 2
Lawyers — Waste of Money or Valuable Partners?
Frankly speaking, lawyers can be of great help in many aspects. They minimize risks and know the technical terms to create a stable business and reliable relationships with customers and vendors. For underfunded startups, some legal fees are unavoidable, and some can hurt. Typically, both are the same thing.
If you haven’t decided yet what kind of profession you want to take up and the main criterion is to earn a lot of money from the very beginning, becoming a lawyer can be a good choice. Choosing a great law firm means earning abundantly from day one.
On the other hand, there are long lists of really bad jokes about lawyers. One goes like this, “How are an apple and a lawyer alike? They both look good hanging from a tree.” This kind of disdainful black humor shows that many people who have issues with lawyers also don’t see a way to get out of a particular dependency. The relationship between clients and lawyers is often ambiguous.
Thus, be careful if you decide to pursue a career as a lawyer. In addition to lavish salaries, you will also have to deal with long working hours, and you will not be loved by everyone.
From a startup’s perspective, the world looks different. Legal fees can easily eat up all the startup capital. Then the company may be legally on the safe side, but financially non-existent. In the next paragraphs, I will describe my personal experiences with lawyers, who I have found to be sometimes helpful and sometimes a waste of money. I will refer to the Spend Evaluation Matrix for Startups in doing so.
Foundation: a difficult and expensive start
It is very likely that you will need a lawyer to start your business. A notary is probably required to register a company. If you are not the only founder, you will need a partnership and shareholders’ agreement. Getting all this drawn up by a lawyer will cost a fortune. If a notary is required, there is no way around it.
Contracts are a different case.
“There are many agreement templates on the Internet. Couldn’t we just use one of them?” It’s not…