Why does a startup need a lawyer?
Generally, lawyers recommend ways of managing risks. It is the entrepreneur’s job to dream of everything that will go right with the company and to evangelize about the company’s prospects for success. It is our role as outside counsel to help that success along by anticipating the things that could go wrong with the company and by formulating strategies to handle them.
Some lawyers are former engineers and scientists; we enjoy fixing problems before they occur. We encourage our clients to hope for the best, but to prepare for the worst. The potential for legal risks can be underestimated all too easily. It may be difficult to imagine a trusted employee stealing trade secrets, a good customer refusing to pay an invoice, or a longstanding investor filing a lawsuit claiming to have been defrauded. It is comforting to assume that relationships like these will remain productive and respectful for their duration. Many do. But there will always be a risk that some won’t.
The good news is that this risk can be managed. That’s what startups use lawyers for.