Bootstrapper.com - Confessions of Serial Entrepreneurs

So i was thinking, my lawyer charges $800 an hour. Some lawyers charge $1000, even $1200. Standard rate for Corp/M&A/securities type lawyers (the tier 1 guys you want working on your term sheet/sale docs/option plans…) typically run at the very least $300 an hour but more than likely between $500-1000 an hour. Now that’s just crazy. When was the last time you paid any other consultant that much money in an early stage company? I never have. It’s pretty crazy. I think i should become a lawyer so when I do some marketing consulting I can charge $800 an hour. The little consulting I do these days is between $100-300 an hour. Still great but nothing like my lawyer gets. Oh yea, 90% of what our lawyers do is take templates, make a few changes, give work to a paralegal and give back to us. Then we pay them to explain to us what they did so complexly. Oy vey! 

One of the most important things for an entrepreneur to consider and probably the last thing on the list of what an entrepreneur actually considers is lawyers. Why? Entrepreneurs (my old self included) always think they can write their own contracts and that they are legal beagles. Now let me ask you a question my fellow entrepreneur. Say you had a beagle, they are very cute doggies btw, would you lick your dog clean so he doesn’t have to? Now, if you said, yes, PLEASE DON’T tell me you do, but if you are normal, the answer is no.

So why would you want to do your own legal work? It’s not your specialty. NOw finding a great lawyer is tough and they are expensive. That’s why you should try to become friends with a great lawyer and get him or her to believe in your ideas and then give you discounted legal services for equity.

Now you’re probably saying “give my lawyer equity!!!!” you’re an idiot. Well, while I may very well be an idiot, there are very specific reasons why you’d want to give your lawyer equity.

1) You are a tiny client of his, this is a motivator to get him to do extra specially hard work for you. None of his big clients offers him equity.

2) Now he’s a shareholder and actually cares.

3) The most important thing you’ll ever do if you are looking for an exit is paperwork. Whether it’s a term sheet or a sale agreement or filing for an IPO. There are a million ways in these agreements for an entrepreneur to get fucked. You want a lawyer that will rip the other side in half with a smile. An entrepreneur negotiating hard may piss off an investor and get an investor to think “he’s being a greedy bastard” and walk away. A lawyer negotiating hard is expected and the investor or buyer may come to you, to try to “settle this thing” and get it over with. Then the investor or buyer is playing into your hands. You just turned a weakness (having to negotiate) into a strength (getting them to come to you to negotiate with you). All because you had a shark of a lawyer. Also, if you 10 entrepreneur, I guarantee you’ll find at least 5 who hated their VC’s and feel like they’ve gotten fucked. Ask those people if they feel they had good lawyers. Case Closed.

PS. How do you find a good lawyer? Networking, or ask me!

Be good friend with a fucking great lawyer. Not a mediocre lawyer, a shark. Don’t hire one. Be friends with one. A good lawyer now will save you heardache later. I just learned this lesson by accident. I’ve been screwed many a times because of shoddy legal work (usually me trying to play my own lawyer - bad idea folks) and i recently because good friends with a great lawyer (hiya joe) who happens to love startups, if i stay out of trouble in the future it’ll probably be because of him.

Nothing is more important than a good well written, notarized contract. Except having a shark to protect you once someone tries to fuck you over - which will happen….

FInd a friend or at least hire a big firm and save your ass now. Spend a little now to save a lot later. Don’t be foolish, you need a lawyer like an atlantic city hooker needs her fix - get it!