Having a good lawyer is essential to the success of any young company, especially startups. Problem is, I've seen too many young companies get sucked into thinking that they need a big, name-brand firm. You know, the firm that handled that big acquisition, public offering or whatever. In reality, hiring one of these firms can be a serious setback for a budding venture. Here's why:
- You're going to end up working with an associate, a couple years out of law school; the partner sells you, the associate works with, just like any other agency/consultancy
- No matter who's doing your work, you're going to get charged up the butt; I recently saw a bill from a mid-tier firm charging $700/hr for basic work done by an associate!
- Just because it's a name-brand firm, doesn't mean the work quality will be good; twice in the last year I've seen shoddy work and poor service from the Valley's most storied law firm (you fill in the blank)
- Things will always take longer than they need to, and if you want to speed them up it's going to cost you more; it's pay-to-play
- Bigger firms and teams aren't usually solution-oriented; I can't recall working with a name-brand firm that really understood our business and helped us find solutions to our problems
- To the above point, there's a chance that their lack of solutions, slow pace, penchant for wordy documents, etc., may actually put an important deal of yours at risk (time is the killer of all deals!)
- Chances are greater than not that they will overcharge you; be sure to review all their bills, line by line
- Lawyers don't source deals for you; never have I seen an key deal/acquisition/partnership/etc. sourced from a lawyer, however that won't stop them from tempting you with this possibility
Here's my point: big firms are not oriented to work with small companies. Fundamentally, big firms are big firms because 1) they need a large, multidisciplinary teams to represent big clients with complex (big) deals and/or 2) they're simply interested in having as many revenue-generating clients as possible, which of course has an inverse relation to quality.
Your best bet is to find a small firm or sole practitioner that has experience working with companies like yours. You'll receive better counsel, spend less, get more done more quickly, and look good in the eyes of whomever you're dealing with (investors/partners/acquirer/etc.). Happy to share some recommendations if you need; just send me an email.