On Startups and Law Firms
Prior to talking to Henry I hadn’t given much thought to what law firm our startup would work with. In fact, I hadn’t thought about working with a particular law firm at all. But as Henry and I compared notes on our respective startups, I was impressed with the resources and connections he had through Wilson Sonsini. That’s when I decided I would extend my OSCON trip to include a week in San Francisco and Silicon Valley meeting with law firms and a few potential investors (and a number of good friends). Despite the whirlwind schedule, the trip has been a reasonable success.
All told, we spent about an hour or so with six law firms in four days. The list includes:
Why a law firm?
You might wonder, as I did, why a startup would want to work with a large firm. Granted, if you eventually secure funding or even just start to hire someone, you’ll inevitably find yourself across the table from a lawyer. But working with the right firm much earlier in the process can have its advantages.
First off, the firms in silicon valley are well versed in dealing with startups. For the most part, you’ll be able to secure fee-deferred representation, something which law firms not used to dealing with tech startups may be hesitant to offer. There will be the classic help with company formation and drawing up typical forms and contracts. But beyond all that, the right firm can help you connect with other potential investors and partners.
Preparation and Practice
Even if you’re uncertain on the need to work with a firm, just the experience of pitching your idea can be worth it. It’s certainly easier to “practice” explaining your startup to law firms than it is in front of investors. You’ll quickly learn what aspects of your business are confusing and what sort of questions you’re likely to face in the future.
Before you begin scheduling appointments with lawyers, you need to have a well written, short business plan. Ideally, you’ll have three documents: a short one or two paragraph explanation, a one or two page executive summary and a full business plan that weighs in at around 10 to 15 pages. At this point, you’re probably selling yourself more than you are the product or website, but you shouldn’t skimp on putting together projected financials, a marketing strategy, and a clear explanation of your product.
I found the process of putting together a business plan very helpful. These were all details I had fuzzily worked out in my head and could answer to a reasonable degree when pressed. But requiring myself to put the specifics into writing in a clear way pulled everything together. I threw some ideas out and others became more concrete.
Making Connections
So you really don’t have much to lose. If things go well, you’ll have a new ally for your startup. You’ll be given a crash course in the way startups work in the valley and have made a number of new connections.
I’m lucky enough to have several good friends who know many of the lawyers in San Francisco. This made it much easier to schedule appointments with only a week or so of lead time. However, also got some great responses to my question on LinkedIn, so those social networks can be useful for something. Worse case, you can always contact the law firms directly. Unlike a VC, the lawyers will talk to just about anyone.
The hardest part now is deciding who we’ll work with. I’ll have more on that in a week or two.
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