Changing the Way the Law Serves Startups

By Using the Law as a Tool in Business Development

Startups Founders feelings toward lawyers are akin to the general public feelings toward dentists – no one wants to go. The reasons for the feelings toward each respective profession may differ – the dentist being associated with unbearable pain, while lawyers are associated with…well I won’t discuss that in this article. The consequences, however, of waiting until you have a problem to see your dentist or contact a lawyer can be dyer in both circumstances. If one waits until you have unbearable tooth pain to go to the dentist, they could lose your tooth, while if startup founders wait until they have a legal problem to seek legal guidance, they could lose their business.

Startups are not traditional businesses

The truth is, I understand why startup founders have this view of lawyers and the law. Startups are not traditional businesses. They are newly emerged ventures that are disruptive and innovative. They are challenging the business landscape. They are changing norms from the formal to the informal, making old technologies obsolete, and changing the way society operates.

How startups operate further differentiates them from the traditional business model. The ultimate goal of startups is not only to be profitably but to eventually become either: 1) acquired or 2) a public company. As a result, there priorities are product development, marketing, pitching to investors, raising funds and scaling.

The biggest difference between startups and the traditional business is that while startups are creating products and services, they are also creating demand for something that does not yet exist to people who do not know that they need it – yet. Simply put, startups are about the future and addressing or solving the future needs of today’s consumers.

Lawyers – a necessary evil and/or “visionary snipers”

To startup founders (and many in society) lawyers are seen as a necessary evil that you contact only when it is absolutely necessary. They are not seen as being a part of the development of the startups success story. In fact, lawyers can be viewed as “visionary snipers” who shoot down the visions of startup founders by bringing them back down to the reality of the law. While startup founders see solutions, lawyers are viewed to see problems – and the two views are seen to clash – but do they?

Changing the view of lawyers and the law by changing the relationship between startup founders, lawyers and the law

What if the law could be a tool to promote the visionary startup founder? What if the lawyer is not seen as killing visions, but widening the vision to provide startups with a birds-eye view of where they are heading and how best to get there?

As a lawyer who is steeped in startup culture, I believe that the law and lawyers can play a vital and positive role in promoting startup growth and success by changing the relationship from top down to a collaborative. This new relationship can foster the startups visions in a legal context by creating a legal roadmap for startups that foreshadows challenges and provides solutions that allow startup founders to successfully execute their vision.

It is for this reason that I have spent time cultivating a new way for the law to serve the interests and needs of startup founders that is innovative and in keeping with the way they do business.

Using the law as a business development tool from the onset

Not only can the law be used as a business development tool for startups, it should be done from the onset in two of the following capacities:

Legal Planning

As I wrote in a previous post,  legal planning is “the means of anticipating the legal needs of your business endeavors from the onset” providing “a blueprint of your legal rights and responsibilities as your business expands from an idea to a reality.” Legal plans, like business plans, should be completed at the start of the venture and updated accordingly as changes are made to the businesses operations and growth. Legal plans complement  business plans by showing the legal rights, responsibilities and liabilities of the startup’s business and how they will be addressed. Every component of a business plan should have a corresponding legal plan to demonstrate how the business will operate legally and how it will address legal issues and concerns.  A brief example of how the law corresponds to components of a business plan are demonstrated in the table below.

This is by no means an exhaustive list, but a small sampling to give rise to the idea of how legal planning complements business plans.

Legal Strategic Plans

While business strategic plans are the long term goals of the startup that provide a snapshot of where the venture is now and where it wants to go, legal strategic plans complement the business strategy. They do this by showing how the law does and will impact the the strategy of the venture, especially as it relates to expansion into other markets and the legal considerations of such expansion efforts. Also like business strategic plans, legal strategic plans should look to a 3 to 5 year period in the future of where the startup hopes to be and how it will get there. For example, if a startup plans to enter markets outside their domestic markets, then legal strategic plan of how this expansion will occur should be completed at least 3 years ahead of the expansion to provide a roadmap of how it will enter foreign markets.

The Law as a Proactive Business Development Tool

The law is not something that should be used or thought about when problems arise. The law can be a proactive business development tool that allows startups to increase their probabilities of success by being able to understand their rights and responsibilities, while mitigating their liabilities from the beginning. Having a legal roadmap provides startups with a clear view of the road they will take as they develop their startup, what aspects of the law they will encounter along the way, and how to address legal issues as they arise. Creating a legal plan or legal strategic plan can promote the startup founders’ vision for their startup and ultimately, their startup’s success.

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The Law Office of Janelle M. Lewis – Merging the Law, Innovation & Entrepreneurship


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The views expressed in this article do not constitute legal advice and legal information provided in this post should not be relied upon as legal advice. Please contact an Attorney for advice on your specific matter.