It’s the catch-22 of any risk averse startup CEO – do you hire general counsel, unsure whether their services are paying off; or do you not hire legal counsel, unsure whether that choice will negatively impact your company’s sales, and even its existence? Well, one thing should be made clear off the top – you need legal counsel, for a number of reasons that this article will explore.
Well, you might be pleased to know that it doesn’t have to be costly, and you don’t have to hire a lawyer long-term to see the benefits.
If you own or work at a startup, chances are you know the value of specialization; you know that you’re not hiring developers off the street, or designers out of high school. In order for a startup to be successful, regardless of how good the foundational idea is, everyone needs to excel at their job within the company. When it comes to things like regulatory compliance,crisis management, mergers and acquisitions or matters of intellectual property, yes, you could crack open a couple books, or scour a few Wikipedia pages, but it will be no match for the breadth of knowledge, and the accompanying quality of advice, that you’ll get from general counsel.
1. Risk Management
The first and perhaps most pressing reason a startup needs legal counsel is risk management. If you want your business to grow smartly, it’s important, early on, to consult with a legal professional about matters like policy compliance, laws and intellectual property.
If Uber hadn’t hired general counsel initially to circumvent licensing requirements, or if Airbnb hadn’t had counsel to look at subletting restrictions or transient occupancy tax, those businesses would’ve folded faster than a futon in an Airbnb suite. Startups are always going to take risks, and if there’s no one there to manage and advise, you become your own obstacle.
2. A Legal Plan
Your startup needs a long-term legal strategy, one that’s cohesive and specific to your company. Hiring legal counsel ensures that you have a legal professional intimately knowledgeable with your company who can put in place a legal infrastructure for going forward. This doesn’t necessarily mean that you have to hire a full-time, long-term lawyer – legal outsourcing sites like http://www.lexlocom.ca/ wield a wide database of legal professionals that you can access for short term.
The point is, these questions need addressing sooner than later, and hiring general counsel, for however long, will set your startup off on the right foot.
3. Protecting Your Intellectual Property
Protecting your IP, especially if yours is a tech startup, is incredibly important, as it’s probably your most valuable asset. Trademarks, copyrights, trade secrets, patents and industrial designs are all valuable IP for a startup, and their strength will attract investors. Talking to legal professionals about your IPs, how to protect them through registrations and NDAs, etc., makes perfect sense –it’s the same reason you install locks on your door.
The startup world is often a fast-paced one, with companies rising and falling all the time. Making smart choices in those tenuous first few years will be what eventually opens your company up to long-term success – and those smart choices start with legal counsel.