Controlling Legal Cost: A brief guide for startups

Small, agile, businesses frequently report that legal services are too expensive and too opaque, and it is no surprise that these businesses end up turning to existing sources of advice in an attempt to deal with legal problems.  In a major survey in 2015, only 13% of respondents from small businesses and non-profits considered that solicitors do not provide a cost-effective means to resolve legal issues, with more businesses turning to their accountants than solicitors.  An earlier 2013 survey estimated that £100billion per year is lost on unsolved legal problems.

We always recommend that getting a good lawyer educated in your tech business is beneficial: ignoring legal matters early on can mean bigger headaches down the road.  But we appreciate that the cost concern remains a very real stumbling block, so here are some ways you can help lawyers help you, without the price-tag.

Prioritise

When you consider whether an issue should or should not have a lawyer consider it, analyse the implications if the issue goes against you:

• Do you know the money loss to your company? Could there be potential flow-on losses – e.g. if subsequent orders depend on the initial contract?
• Will the issue expose the company’s reputation?
• Does the issue relate to a fundamental relationship? g. profit and power-sharing relationships between partners and investors need to be clearly understood so that there are no uncertainties.  This can matter more as the stakes get higher down the road.
• Make sure you are educated about what legal issues face your industry: service levels in contracts, copyright and design patents, data protection, employment and immigration laws, and so on.

Speak a bit of Lawyer

The best lawyers know how to speak industry language or can quickly pick it up when they need to.  But most industry participants don’t know how best to present information to a lawyer.  A key skill of lawyers is the ability to quickly extract the relevant information without wasting time trawling through irrelevant documents, but you can help them in this task.

• Focus on the core problem: give the lawyer a brief background, including any key players, and then explain what objective you need and what obstacles you have identified (if any);
• If there is significant technical jargon, provide brief separate explanations – even technology specialists may not know your particular field!;
• Provide core documents which relate to the objective and obstacles, and tell the lawyer about other documents that exist and how they might be relevant, but leave it to them to say what further is needed;
• Make yourself available to talk through it: it’s often most efficient to let the lawyer ask you questions verbally and talk through the issues at a very high level – but don’t press the lawyer to give a final advice before they’ve checked the law!

Do some of the work yourself

Lawyers try to outsource basic tasks to secretaries in order to save you costs, but ultimately the person best placed to organise documents and make arrangements is you.  You know where everything is, and who to ask for information, so when you know this is needed it’s best for you to get this ready.  Prepare lists of issues that need to be covered, write draft statements or contracts (focussing on what you know needs to be in it).  Read about the legal area so that you have an idea what may be relevant before you have the lawyer spend time on it.

Prepare for Phone Calls and Emails

Considerable legal fees can be saved if you can give clear and certain answers to a lawyer’s queries, and keep your meetings and interactions concise and to the point.  Make sure before a call or meeting that you have all the information to hand, or know where to find it.  Have a list of items you want to ask beforehand.  Try to send fewer emails with more concise content.

Find an Effective Lawyer

Once you’ve found a lawyer that works for you, it’s unlikely that you’ll find better by shopping around.  The legal industry is opaque, and costs are hard to evaluate, so if you find yourself confident in the support received, content with the cost, and certain that the lawyer understands your business, it’s recommended that you build the relationship further.