Your company is hiring lawyers all wrong...
I’ve bounced around a lot in my 10 years as a practicing lawyer. I’ve worked in-house for large enterprises and small startups, and acted as outside counsel for many of the same. One thing I’ve learned is that most folks, regardless of background (myself included), aren’t great buyers of legal services.
When I started my legal career in-house I knew nothing about working with lawyers. As a result, I was burned many times during the legal buying process. Over the past decade, I’ve…
(1) selected the first recommended lawyer without exploring other options,
(2) met with many lawyers and still had trouble deciding on the right one,
(3) hired lawyers who later showed they weren’t subject matter experts,
(4) significantly exceeded my budget on a legal project,
(5) worked with a lawyer who did extensive amounts of work but did not explain the process to us or walk us through the final product/decision,
(6) hired a lawyer to fix another lawyer’s mistake, and
(7) paid for work I didn’t need.
If any of these scenarios rings a bell, know you’re not alone. Like I said, I’ve been on both sides of the equation, and I know enough now to confidently say that these scenarios are still pretty common today. Not because it was any lawyer’s intention to fleece or mislead me, but because I just didn’t know how to search for and hire lawyers.
So, with that in mind, I’m here to provide a little clarity and guidance on finding and working with lawyers, so you can learn from my experience without acquiring the scar tissue to show for it.
When's the right time to find a legal advisor?
You should make finding counsel a priority very early on in their lifecycle. The legal issues in large scale consumer, SaaS, and regulated industries are complex: projects often involve building technology in an environment with uncertain and antiquated laws and regulations. Product and strategy considerations often generate serious legal considerations that should be figured out in advance of making decisions that are difficult to unwind.
All too frequently, teams overlook the importance of legal and compliance issues, only to realize later that their products need significant modifications to meet these requirements. This kind of oversight usually results in hefty financial and time expenditures, far exceeding the initial costs of proper planning. Engaging reliable legal counsel early on isn't just about avoiding pitfalls; it's about gaining an edge over competitors who might stumble into costly legal snares.
The popular ethos of "move fast and break things" might sound appealing, but sometimes the thing you break is your business. Don’t discount the value of a lawyer when you’re early days trying to figure out your product… this is where the right lawyer shines.
Now, let’s discuss how to find and hire the right ones.
Organizing your facts
If you approach an attorney without a clear statement of what your business is and what you are trying to accomplish, you risk engaging them to do hours of fact discovery that you could have done on your own. As such, you should have a ready grasp of the details that lawyers will need to know to give an informed view.
Here are some questions to reflect upon that can help you identify your needs before you look for counsel. If you do this part right, you can bring it to your lawyer and save both sides time and, yes, billable hours.
What are you building? Provide a detailed and clear description of your product. Avoid overly technical language, acronyms, or industry jargon that might obscure important details. If your product roadmap isn't fully developed, outline several potential directions it could take. Just as you rely on the lawyer for legal advice, they rely on you for a clear vision of the product.
Who is involved in building it? Consider the different types of contributors and how their compensation works. Plan for how you will scale, including contracting services, hiring personnel, and utilizing other software.
Where are you (and your company/workers/contractors) located? Legal analysis always depends on jurisdiction, so know where everyone involved in the product creation process is located.
Who are your end-users? Give the characteristics of the people or businesses who will use your product. Consider where they are located, how they will find out about your product, and how they will access it.
What keeps you up at night? When counseling my clients, I always ask them to do the first round of issue-spotting themselves. They know where their skeletons lie, and they know their products 10x better than I can.
What’s your company's history or background? Your history can affect future decisions. Try to provide the critical details of your company’s past, and ask lawyers if they have any questions related to your backstory.
Choosing a “lead lawyer”
In the early stages of developing your product, it's crucial to select a “lead lawyer”. This individual will understand your overarching strategy and recognize the major challenges you face. This is not the same as finding a “full service” law firm, and regardless of whether you work with a large firm or a small boutique, you’ll need to identify the lawyer who can build your strategy and own it. If your early conversations are leading you to believe it will always be a committee of lawyers handling your every need, you might want to run the other way,
Oftentimes, early in your product development, your lawyer is the person who translates your plans into a legal roadmap. This lawyer sees your near-term and long-term blockers and helps you develop a legally viable plan to eliminate them. This means that, above all else, you need someone who is going to be an opinionated, confident advisor who can provide direction. You’ll want to avoid the lawyer-type that simply gives you a menu of options… you want the lawyer who’s going to recommend their favorite dish.
As your project progresses, your lead lawyer should assist in identifying other attorneys who are adept at handling specific tasks effectively (like managing low-impact commercial agreements) or highly specialized, focused tasks. While you should still seek high-quality representation for these roles, the variation in performance between different attorneys in these areas tends to be less significant. The role of these specialists should be confined to the particular tasks they are hired to perform.
If you’ve done a good job finding and hiring your lead lawyer, then they'll help you fill in the rest of your legal gaps as needs arise.
Finding the right personality fit
Personality fit is as important as finding someone with the right set of skills. You need both. If you think you can settle for a poor personality fit because they seem to have the right set of skills, you might actually be picking up on a skills issue and not know it.
You know you have a good personality fit if: (1) you and your lawyer discuss important issues directly, without intermediaries; (2) your lawyer listens to you and asks questions long before providing advice; (3) they’re responsive, even if they won’t be able to provide substantive counseling immediately; and, finally, (4) they pass the gut test - you like them and trust their honesty and integrity. If you have bad feelings about #4, trust your gut and run the other way.
Vetting for the right set of skills
Assessing legal skills is a hard task for anyone, let alone non-lawyers. You’ll want to keep it simple when evaluating a lawyer's ability in short order.
Focus on the following areas:
What’s their bread-n-butter?
What can they learn, if needed?
Can they be creative?
What’s their bread-n-butter?
When you speak with a lawyer, you want to hear something along the lines of “I do this all of the time.” You have a sea of lawyers to choose from, so don’t settle for anyone who hasn’t completed the task you’ll need help with a million times (exageration, but you get the point), or doesn’t practice in your industry (especially if it’s niche stuff). You are looking for someone who does not need to do a lot of additional learning before being useful. A lawyer who has industry knowledge can be very helpful in identifying industry norms or industry red-flags. In regulated fields, this is extra helpful.
Ask your prospective lawyer to talk about similar clients and/or similar matters. Give them some details about your specific needs and see if they ask some good, probing questions. See if they mention well-known concepts in your industry. Detect whether the lawyer engages or simply nods along.
Finally, ask for references. Talk to a previous credible client who had a similar project (ideally, the same project). If you have the time, this step is worth it.
What can they learn, if needed?
While it’s important to find a lawyer who has at least one “bread-n-butter” overlap with your specific needs, no lawyer will not have subject matter expertise in every issue you’ll deal with. So, while you’ll want specialized expertise in a few key areas, you’ll also want a lawyer that has the ability to be a generalist. A great lawyer can hear a fact pattern in a tangential or foreign area or industry and identify issues that need to be addressed.
You can assess this ability by observing how the attorney spots and analyzes issues outside of their expertise when you discuss your legal needs. While it’s totally fine for a lawyer to say “I’ll need to follow up on that”, they’d certainly get bonus points for adding their two cents beforehand. Follow their logic and see if their response makes sense to you.
Can they be responsibly creative?
In the world of startups, where founders and builders are searching for ways to disrupt and reinvent past ways of doing things, lawyers need to think outside the box. If a lawyer isn't creative, they’ll hold your company back. A good startup-friendly lawyer needs to understand the laws as they are but also be able to come up with new ways to follow these laws in situations that haven't been dealt with before.
Ask them how they view innovative solutions in your market. Ask how they view the legal risks of your competitors, or how they view some of the startups pushing the bounds in your industry. handle new and changing markets. Are they overly conservative in their tone or analysis? Ask them how they might mitigate risk in these scenarios without slowing speed to market.
Also look out for the opposite. Some lawyers may just tell you everything is fine without really looking into it. Be careful with lawyers who seem too sure of themselves and don't seem to put much thought into their advice. If you pick a lawyer like this, you might end up having to fix their mistakes later, which can be expensive.
Bringing it all together
When you compare lawyers, look at how these skills balance out. Think about how each lawyer's mix of abilities will help your project and fit in with the culture of your company. If you do this carefully, you'll have a better chance of finding the right leading lawyer for all of your legal needs.
Good luck out there!