Every startup that will be entering a formal agreement with another organization must have legal representation. What’s critical at this stage of your existence is that you have a lawyer that recognizes the financial constraints of early stage startups, understands the concept of relative risk (that is, risks you may have relative to your financial ability to completely mitigate those risks) and is willing to allow you to do as much legwork as possible in order to reduce costs and to get to a fast end-result. You want a lawyer that recognizes you’re not a small version of a big company and that you currently don’t have the financial resources and people resources that you (hopefully!) will have someday.
Know, however, that lawyers are like any other business in that they are working to make money for themselves and their firm. You should work to find firms that may offer discounts or offer predetermined amount of hours for a specific dollar amount. Another approach is to look for law firms that allow their partners to offer pro-bono (free) services with one client a year. You can also leverage law clinics offered by universities that have law schools. These programs provide free services with the work performed by law students but supervised by credentialed attorneys.
Beyond helping you with basic transactions such as company formation and contracts, your lawyer should also be your strategic partner. This is why you don’t want a lawyer with no experience in working with startups. You want someone who knows your market, knows the investment scene, knows the value of your solution and knows what’s most important when putting together a deal. The best lawyers are the ones that are focused on helping you grow, as your growth means more work for them in the future.
Choosing your attorney is one of the most important early decisions that you will make. While you don’t need a lawyer to do everything and there may be some things you can do yourself, make sure you have your lawyer do the hard stuff that requires their knowledge and experience.