Boston Startup Attorneys & Lawyers

Legal Tips and Information

Important Startup Attorney Services

As you begin your search for an attorney to help your startup with its initial legal requirements, you’ll want to ensure that the attorney you hire is capable of providing a diverse set of services.  Your startup – like most businesses – may seem straightforward from a legal perspective, but in reality, there are a number of “pain points” that commonly affect startups and that are worth keeping in mind as you move forward.

Intellectual Property Protection

Intellectual property – patents, trademarks, copyright, trade secrets, etc. – may comprise the bulk of a company’s value, and this is particularly true in the startup world, where there may be an initial dearth of human capital, equipment, and other high-value assets.

To protect your intellectual property, your attorney must prove capable of a variety of tasks.  Skilled startup attorneys draft confidentiality agreements and non-disclosure agreements to prevent employees, contractors, and other service providers from revealing information to competitors.  After working with you to formulate a patent/trademark strategy that meets your budgetary restrictions and adequately protects your IP, your attorney should submit the relevant applications to the United States Patent & Trademark Office (USPTO).  In the event of infringement, your attorney should take steps to negotiate with the infringers to end the infringement and settle the issue.  If negotiations break down, your attorney should be able to litigate the case or should refer you to an attorney with such experience.

Employment Contracts

Employment contracts can be rather confusing to navigate in the early growth stage of a startup, as circumstances not only engage the usual complexities of an employment contract (i.e., setting reasonable terms that are in comport with the law), but also frequently involve some stake in the company itself.  To prevent any unfortunate misunderstandings down the road, it’s important to hire a Boston startup attorney who knows how to draft an employment contract and a stock agreement.

Business Formation Services

The vast majority of startups will either incorporate or form as a partnership.  By default, owners are not shielded from the risk of legal liability.  By incorporating, however, you can prevent a lawsuit from penetrating the personal assets of owners, employees, and investors.

Suppose, for example, that you own a sole proprietorship startup – you are the sole owner.  Your startup is subsequently sued by a disgruntled ex-employee.  The employee wins the a damages award of, say, $250,000.  If the business is not able to absorb this cost (as is true for many early stage startups), then the plaintiff can sue you as the sole proprietor and reach your personal assets.  To put it simply: you may have to pay for your company’s legal liabilities out of your own pockets.

Most startup attorneys are familiar with drafting the necessary documents and registering a company in the desired form.  They should also provide some supplementary advisory services to help you decide which corporate/partnership form makes sense for your business.

Qualities of a Great Startup Attorney

Though every startup is likely to have somewhat different expectations for their attorney, the best startup attorneys share certain common, positive traits.

For a long time, attorneys were able to portray and sell a quality of service that was inconsistent with their actual offering.  With UpCounsel, however, you can browse the ratings, reviews, and repeat-client numbers for an attorney.  Positive UpCounsel ratings can be taken as a reliable indicator of high-quality legal services.

What do great startup attorneys do to separate themselves from the pack?

Strategic Advising

Your attorney should not just be an instrument for drafting contracts, registering your business, and submitting intellectual property applications – a skilled startup attorney should work with you to ensure that you and your team understand the legal issues as they come up.  Further, your attorney should advise you on the strategic consequences of various legal decisions.  For example, if you are entering into a contract with another business, your attorney should not simply draft the contract document itself, but should also explain the advantages and disadvantages of relevant provisions.

No Hours Padding

Hiring an attorney can quickly drain the limited operating budget of an early stage startup.  Though you can take certain measures to maximize your return on your startup attorney’s billable hours, it’s critical that you work with an attorney who is open and honest about their billable hours.  It can feel like you’re fighting a losing battle if you work with an attorney who is constantly attempting to pad their hours and charge you additional legal fees.  Remember to read UpCounsel reviews to assess whether your attorney struggles with this issue.

Client-Engaged

The startup environment is typically fast-paced and feedback-oriented.  As such, your attorney should be compatible with a heightened level of engagement.  Avoid attorneys who respond to concerns after several days delay.  Time is especially valuable in the startup context.  If your attorney is slow to respond and does not seem particularly invested in the attorney-client relationship, he or she may stall important, internal decision-making processes.

Contract Considerations for the Growing Startup

Startups – like all companies – must navigate a variety of contracts in order to do business.  Regardless of what specialty your startup attorney has, they should at the very least be a capable contract lawyer.  The best contract attorneys will take the time to explain the strategic advantages and disadvantages of various contract provisions, but as a layperson, it is worth keeping in mind a few baseline understandings applicable to many of the contracts your startup will execute.

Breach May Be The Correct Strategy

It is important that you understand that breach is a strategically-available option.  Breaching one’s contract may be a reasonable choice given the circumstances.  Depending on how the contract was drafted, there may be fees for such breach, or an alternative dispute resolution process to determine damages, or the breach may ultimately result in settlement or a lawsuit.  Though breach is not usually “desired,” it should not be considered off-limits.

Negotiate and Draft Favorable Terms

There are provisions in your business contracts that may initially appear to be of minor significance, but may actually become quite meaningful later on.  As such, it is important that you negotiate and draft favorable terms for all relevant aspects of the contract, even those that may not seem worthwhile at first.

For example, when you execute a contract, the state jurisdiction that you select to govern the contract may affect whether other terms of the agreement are deemed valid and enforceable under the law.

Consider Including an Arbitration Provision

Arbitration is a form of alternative dispute resolution that can be highly advantageous to growing startups.  The decision made by a neutral arbitrator (out of court) can be confirmed by a court of law and serve as the final judgment over the matter.  Further, arbitration is private and thus avoids the potential reputational damage of associating your brand with a lawsuit.

If you are interested in including an arbitration provision in your contracts, speak with your contract attorney.  They will advise on the specific implementation of your arbitration provision (and can provide additional information on potential alternatives) and will draft accordingly.