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So you’re the first small business lawyer at this amazing startup

Here’s what you need to know
Sterling Miller

There is little more exciting than your first general counsel job. Finally, you get to be in charge and do things the way you have always wanted to do them. For many, this begins at a small company or startup, and usually the entire legal “team” is composed of just you. Meaning, mixed with that shiver of excitement is a very real twinge of fear; “what happens now and can I handle it?” The answer to the latter part of that question is almost certainly, “of course you can!” The answer to the former can be a bit more complex. In this article, we’ll explore some of the things you need to know heading into your first GC role with a startup firm.

Is it really for you?

It takes a special type of person to be the only in-house lawyer at a startup. Do you have at least several years’ experience practicing law? Are you ready to give up the perks and cushy lifestyle of working at a law firm or a big in-house department? You will need to be almost completely self-sufficient — a Swiss Army knife of legal skills — and ready to work long hours to ensure everything gets done.

You may not have an office or even a cubicle. Get ready to fly by the seat of your pants when making legal decisions. You will likely not have to go to outside counsel (if that is even an option), nor can you spend hours researching a problem — you will be lucky to get minutes. You will constantly make important decisions with less-than-perfect information in areas of the law where you have little background — are you comfortable with this? Finally, be ready to take on more risk than you’ve ever experienced in your legal career. Your orientation will quickly become more “business” than “legal” much of the time.

Clarify your role

Before accepting the job, clarify exactly what your role will be. Will you be part of the executive team and a trusted advisor to leadership and the Board of Directors, or are you simply going to be a scrivener whose job is to draft contracts and manage outside counsel? Get your role, duties, and expectations nailed down before accepting the job.

Get scrappy

As general counsel of a startup, you will need to be very frugal. Money will be at a premium with pressure to limit expenses. You may have no to little budget for outside counsel.

Here are things to focus on:

  • Find a small boutique law firm or solo practitioner. You can stretch your legal budget by ditching “Big Law” and finding a small firm or solo practitioner (or even an Alternative Legal Services Provider) to help with legal work.
  • Find free CLE and seminars. If you look, you can find a lot of free CLE; you can sign up for free client alerts on the web sites of most law firms.
  • Free law library. Many law schools and local courts provide guest access to their resources/collections at no cost (in person or online).
  • Specialized blogs. You can find a lot of free guidance and information through legal blogs dedicated to the sole general counsel or startup company lawyer.

Expand your resources

If you can get the budget, get Practical Law. It is a life saver for a single in-house lawyer or small legal team.  Practical Law can give you the research, forms, checklists, sample policies, etc. you need to find answers fast.

However, if it is not in your budget, there are several other free or low-cost resources out there:

  • Lexology.com – a newsfeed service that captures the best of law firm publications and client alerts.
  • Justia.com – a helpful, free mishmash of links to case law, law reviews, blogs, contract forms, etc.
  • Harvard Guide to Free Legal Resources – a lengthy list of links to free legal resources.
  • State Bar Association – usually has a lot of free resources for members.
  • Google Scholar – if it is on the web, you can probably find it here.
  • RocketLawyer.com – lots of free form agreements (but for a small price, an even bigger library).
  • Business in a Box – for a yearly subscription you can get access to a plethora of well-written and useful form contracts and other documents.

Focus on the basics

Odds are good that there is a lot to fix at a startup. You cannot fix it all at once, so focus on the basics:

  • Fix the basic corporation documents (for example, articles of incorporation, by-laws, LCC documents) as it is likely these were prepared by the founders using a “do-it-yourself” form.
  • Clean up/prepare the “cap table.”
  • Get the right HR policies in place (this has likely been an after-thought at the company).
  • Prepare form agreements for the company’s most used contracts and install a repeatable contracting process.
  • Get on top of data privacy/security issues.
  • Protect the company’s intellectual property, such as trademarks, patents, copyrights, and trade secrets. For many startups, if its IP gets improperly copied or stolen then all the value of the company is at risk.

Build a network

You may be a department of one, but you are not alone. Focus on building a network of lawyers (in house or outside) that you can talk to, share resources with, and bounce ideas off of without cost. This “expands” your department without adding headcount. Many cities have organizations comprising general counsel that meet or email regularly; or create your own group (locally or on LinkedIn).

Prioritize/delegate

You must become an expert in prioritizing and delegating. Hone your ability to decide what needs to be done now and what can wait. Focus on “urgent versus important” and value; the more urgent and valuable issues go to the top of the list.

Even if you are the only lawyer, you can still delegate. If it doesn’t require a law degree, it is “game on” for delegating. For example, administrative assistants can do way more than answering the phone and keep your calendar. Let calls roll to voice mail, keep your own calendar, and then figure out what substantive tasks your assistant can take on for you.

There may be others in the business who can take on tasks. For example, can someone in sales be trained to do contract intake and gather all the information you need to begin to draft the contract? Your pool of available people to delegate to is only limited by your imagination.

Become “Dr. Yes”

You must quickly get into “Dr. Yes” mode and drop “Dr. No.” This doesn’t mean you cave on everything, but you must be sure you understand what risks the company is willing to tolerate and then adjust your legal thinking accordingly. It may be risky to accept uncapped liability in a contract but it may be the only way a startup can sign that keystone customer. Don’t say “no,” say “we need to get some insurance!”

Being the general counsel of a startup is both challenging and exhilarating. Be sure you know what you are getting into and that you have the stomach for a new way of working. Once there, be scrappy and creative to expand your resources and your ability to say “yes.”

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