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Managing Your Lawyers as Your Startup Grows

It’s a commonly held perception that lawyers are ruining America, a view that can be especially resonant with entrepreneurs running startups who often find their legal dealings to be a major point of frustration as they grow their businesses. They complain that their attorneys slow down negotiations and the closing of deals urgently needed to bring in vital revenue. All that and they cost too much!

As a former lawyer and business person working as a venture capitalist to help startup founders reach their ambitions, I know that handling legal affairs poorly can crater the chances of a startup’s success. Entrepreneurs who learn to manage legal counsel effectively increase their odds of winning customers and closing financings — decreasing their chances of running out of cash. A chief executive and her lawyer should work together like winners in a three-legged race, moving smoothly in tandem, each aware of their responsibility and how to respond to the actions of the other.

Managing your relationship with your lawyer starts with understanding the orientation of the legal mind. Entrepreneurs that run startups are comfortable wearing many hats to make their businesses successful and typically like to work in a non-confrontational, quick and collaborative manner. That’s not how the mind of your typical corporate lawyer works.

Law schools teach that the adversarial process is the best way to find the truth and to reach optimal agreements. That means starting at the most favorable (e.g. extreme) position for the client in a contract and wrestling every point with the “opponent’s” counsel. This approach to partnerships and relationships tends to push people’s buttons, requires poking holes in the “other side’s” thinking and takes substantial time. It’s a mindset that finds solutions through formidable posturing and strenuous debate. It’s often uncomfortable for people who prefer working collaboratively. As Benjamin Franklin once put it, “A countryman between two lawyers is like a fish between two cats.”

However, lawyers work like this for good reason: Their ethical responsibility is to be a “zealous advocate.” That commitment mandates lawyers to protect and pursue your interests, within the bounds of the law. However, it’s a thin line between zealous and overzealous if the client fails to prioritize the business’s interests to the lawyer.

Finally, your lawyer is an expert in legal matters only — and can only be held liable for legal advice. You’re responsible for balancing that legal advice, the timeliness of the negotiation process and legal costs against your customer’s needs and the strategic and financial value of any business relationship or partnership to your overall business.

Published Miriam Rivera
GUEST WRITER – Entrepreneur
Co-Founder and Managing Partner at Ulu Ventures, Kauffman Fellow

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