Startups hiring their own lawyers is an important issue when they’re growing. TechCrunch published an interesting article on this topic today, and here’s the ingress:
Airbnb challenged local hotel zoning laws, Uber took on taxi licensing requirements, and Pinterest built a business around posting copyrighted images. Startup companies that simply follow the rules risk getting left behind. The right lawyer can mean the difference between pushing the envelope and breaking the law. Many startups struggle to decide whether and when to hire a lawyer and how to make the most of their in-house attorney once they do.
Here are the main topics discussed in the article:
- Why Do Startups Hire Their Own Lawyers?
- When Do Startups Hire Their First Lawyer?
- How do Startup General Counsels Work?
- How do Startup General Counsel’s Interact with the CEO?
There are a lot of good reasons for a startup to hire their own lawyers, and one of the most important issues is why a founder or CEO do it and how the relationship between these two important roles are. This is described in a good way in the article:
“Being general counsel is like being Tom Hagen in the Godfather – you’re a Consigliere,” the top lawyer at a New York City startup recently explained. But to achieve that kind of trust, “you need to understand where the founders are coming from – the sacrifices they had to go through to build their business.” Startup companies hire for “fit” into a company culture that celebrates and demands risk-taking – a quality not typically associated with lawyers. So when startup CEOs recruit their first in-house attorney, they look for someone who can replace “no, because,” with “yes, if.”
It’s an interesting article, and it’s an issue for my startup Ensafer down the road. The rest of the article can be read here. Let me finish this short blog post with an illustration from TechCrunch’s article.