How to Hire the Right In-House Legal Counsel (and Save Your Startup Money)

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If you’re looking to hire legal counsel for your company, be careful. Just because you’ve found a lawyer who specializes in startups, doesn’t mean they’re the right legal counsel for you or your startup. Here’s how to evaluate whether a lawyer is right for you.

Experience Is Important

In order to reap the benefits of hiring an in-house counsel early, you need to hire the “right” lawyer.  Look for someone who has worked in your industry, and if possible, in the particular type of business your startup is involved in, which will make their existing knowledge and experience transfer easily to the company. 

The right lawyer should bring real-world considerations into any legal analysis and be able to assess and articulate risks without making a startup feel that all roads to achieving its business goals are blocked. If a particular course of conduct is deemed to be too risky to pursue, an in-house lawyer should be able to suggest safer alternatives to consider, balancing legal requirements with the needs (and vision) of the business.  

Consider Culture Fit

Fit within your company culture is also important. Your in-house legal team should be adept at forming relationships with the other key members of your leadership team, so that they, too, see the lawyers as a helpful source of guidance and strategic input, rather than simply naysayers.  

Timing Matters (and Earlier Is Better)

It is much easier for in-house counsel to be viewed by your management team as a “partner” and not a “blocker” when that person is brought into the conversation early and is part of discussions about the vision and path of the company. Bringing a lawyer on board when there are already fires to put out makes it harder hard to view them as the strategic partner they can be.  

By bringing on the right in-house counsel early in your startup’s life, you can build a legal department that is not simply a “cost,” but a true strategic partner of the business. This paradigm shift can end up saving you money, angst, and reputational damage, and will ultimately lead you and your company to be more successful.

“By bringing on the right in-house counsel early in your startup’s life, you can build a legal department that is not simply a “cost,” but a true strategic partner of the business.”

—Amy Rowland, Founder of Varia Search

About the Author: Amy Rowland is the founder of Varia Search, a boutique legal recruiting firm that uses a bespoke approach to fill legal department roles. Prior to starting Varia Search, Amy was a recruiter at another legal search firm where she focused on recruiting for in-house legal positions. She has also held in-house roles at two international companies and a large New York City law firm.

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When Should Your Startup Hire a Full-Time Lawyer?

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Because an in-house legal department is commonly viewed as a “cost center” and not a “revenue generator,” startups are often advised that the answer to the question of “when should we hire an in-house counsel” is best answered by running a straightforward cost-benefit analysis. When that exercise demonstrates that the legal fees paid to outside counsel are greater than the cost of adding a lawyer to a company’s payroll, then it is time to bring on a lawyer to work in-house.

While this approach is appealing in its simplicity, it fails to account for a big portion of the value that an in-house lawyer (and ultimately, a legal team) can bring to a young company, the value that may be difficult to quantify. The right in-house counsel can be a strategic partner and a huge asset to a growing business. Here’s how to tell when you should bring on a full-time lawyer.

Save Yourself Headaches and Money, and Hire In-House Counsel Early On

Once the legal structure of a company (LLC, Corporation, Partnership, etc.) has been set up and the basic legal requirements for doing business have been met, many startup founders think of lawyers only as “clean-up crews:” people reluctantly hired from time to time when there’s a problem. 

In fact, until confronted by a lawsuit or government investigation, many founders tend to view lawyers as obstacles to progress—people who are always telling you what you can’t do—and to want to avoid them for that reason. But lawyers can also provide useful perspectives to a founder strategizing how the company can achieve its goals while avoiding expensive pitfalls. 

A good lawyer has been trained to anticipate issues that might arise and will put in place the safeguards that can help a company avoid those problems. Like the old adage, “a stitch in time saves nine,” this way of working obviously helps a company avoid extremely costly mistakes.  

Learn From the Mistakes of Others, and Consult Legal Counsel Proactively

Protecting your business early on can save you 10x, 20x, or even 30x in legal fees if you have to hire legal counsel to clean up a mess. In Season four of HBO’s series “Silicon Valley,” an entire episode (“Terms of Service”) was constructed around a character’s failure to comply with the FTC’s Children’s Online Privacy Protection Rule (“COPPA”), estimating that that mistake—made without even realizing that a lawyer should have been consulted—left the company, Pied Piper, potentially liable for $21 billion in fines. 

A quick consultation with a lawyer could have saved a lot of angst, even if it would have ruined the episode. As far-fetched as this scenario might be, it is unquestionably true that a lawyer can save a company money by minimizing its exposure to regulatory fines, along with lessening the likelihood of costly lawsuits and making sure the company’s intellectual property, reputation, and other valuable company assets are well protected—all of which add enormously to a company’s success. 

Unfortunately, since these benefits represent savings that are difficult to quantify, they are not so easy to plug into a cost-benefit analysis, but that doesn’t make them any less important than the sum of all those law firm invoices.

“Can’t I Just Use Outside Counsel Instead of Hiring a Lawyer In-House?”

While outside counsel can certainly provide legal services, without context, a founder may miss the right opportunity to reach out for help (since you don’t know what you don’t know!). Even if you do think legal counsel would be helpful, the prospect of facing expensive legal fees may deter your from making the call until a concrete issue presents itself. 

Giving an in-house lawyer a seat at the table early in a company’s development can mean fewer unpleasant surprises down the road. It can have other benefits as well, such as devising a strategy for utilizing outside law firms and judging when the most cost-effective choice is to consult outside legal experts, for example, to advise with respect to a specialized area of the law such as patent and other intellectual property matters, First Amendment issues, SEC regulations and the like. 

When it is determined that outside counsel needs to be consulted, the in-house counsel team can manage that relationship, including negotiating legal fee rates and reviewing bills. If done right, this can also save a company money. Not only that, it will free up the team member who is currently managing outside counsel, which again can lead to cost savings or even revenue growth if that team member’s responsibility is normally to generate revenue for the company.

“While outside counsel can certainly provide legal services, without context, a founder may miss the right opportunity to reach out for help (since you don’t know what you don’t know!).”

—Amy Rowland, Founder of Varia Search

About the Author: Amy Rowland is the founder of Varia Search, a boutique legal recruiting firm that uses a bespoke approach to fill legal department roles. Prior to starting Varia Search, Amy was a recruiter at another legal search firm where she focused on recruiting for in-house legal positions. She has also held in-house roles at two international companies and a large New York City law firm.

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Why This Founder Says Wait Until You're 30 to Start Your Business

When she read “The Tipping Point” by Malcolm Gladwell, Ivka Adam, founder and CEO of Iconery, immediately identified with the archetype of the Connector. Connectors make things happen through people. They galvanize people and act as catalysts for change. 

So it makes sense that the idea for Iconery, a curated online selection of fine jewelry, was born from Adam’s idea of creating an ideal online business model, one where you “don’t have to hold inventory but have the vibrancy of a marketplace.” A business that connected a marketplace model with e-commerce. 

“I knew I wanted to build a marketplace where I was supporting designers and their passions,” the founder says. “My passion is to support other people’s creativity, and give them access to manufacturing in a vertical that is very capital intensive.” For instance, the cost of gold, diamonds and other gems, as well as the labor cost in stone-setting, is very expensive. From funding to manufacturing access, Adam knows the fine jewelry market is a difficult passion to pursue. 

She took no shortcuts on the road to Iconery, and believes that entrepreneurs should actually wait until they are in their thirties to launch a startup. She bootstrapped the company, used up her entire savings, and moved home to live with parents. “I was 35, living at home, single. It’s a really tough place to be, and founder depression is real.” But she adds, “When you have twelve years of experience behind you, it’s so much more compelling to investors, they trust you. And you’ve made enough life decisions that you know how to make decisions quickly.”

Adam has always been incredibly thoughtful and strategic about her career, learning early that the road to success is paved with good connections. Home-schooled until high school, she went to a “ton of summer camps, where I had to very quickly learn to make friends.” She credits this as one of the experiences that has informed her networking ability.

While in business school at USC, Adam worked at three different startups. One of those was Cash Warren’s (Create & Cultivate keynote Jessica Alba’s husband) startup, ibeatyou.com. She also knew that she wanted a product management internship at eBay, but at the time eBay was only recruiting from the top four business schools. “I had zero chance of getting an internship there,” she says, “Plus no one ever does product management internships.”

But that didn’t stop her. She leveraged her product management experience at ibeatyou.com, and then “networked the hell out of eBay.” 

What does that mean? She might want to thank mom for those summer camp experiences. 

At the time Adam knew no one at eBay, so she did some research and found out that there was one recruiter who was going to be at the National Black MBA Conference in Texas. Adam hopped on plane and headed to the conference just to meet that one recruiter and get on her radar. She also went through all of her connections on LinkedIn to find an in. Through all of her networks she was only connected to two people at eBay, but they both happened to be product managers. “So,” she says, “I scheduled a 30-minute coffee with each of them.” She flew up to San Francisco, on her own dime-- the cost of all three trips was about a thousand dollars-- just to have those coffees. But another one her beliefs is that, “You have spend money to make money.” 

“I got on their radar, I showed them that I was gung-ho eBay — I was a longtime customer, I knew the ins and outs of the site, and I had read up on everything.” When the time came for internship offers to go out, one of those coffees resulted in an internship in product management. AKA: she did the impossible. 

“You can’t expect an internship to come to you.” she says, “You have to go out and fight for it.” 

"You can't expect an internship to come to you. You have to go out and fight for it."

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“I also believe,” she adds, “in putting all your eggs in one basket, instead of spreading yourself too thin.” She stays that if a company can see that you’re on fire to work there, it will feel real, authentic, and they’ll take you seriously. 

Some of the best advice she ever got was during that eBay internship, where she was told “To set the goal to get to know two new people at the company every weekend.” That meant she was having lunches with VPs and coffees with a wide variety of people throughout summer of 2008. When offer time came in the summer of 2009, which she points out was “one of the worst financial climates to finish school,” only 5% of her graduating class received job offers.  Adam got one of the top offers.

She credits the offer to building her network the prior summer. And by the time she was ready to leave eBay she had advanced from intern to Head of Mobile Marketing for North America, while simultaneously working as the Chief of Staff to the CMO. 

“The big company experience is really important. It automatically gives you an incredible network. Because of my time at eBay,” she says, “I now know the CMO of Facebook. I know the CEO of One Kings Lane, and a ton of people at Pinterest and Google.” People she worked closely with at eBay are now leading teams and departments at other startups. She can ping them anytime. “It’s an automatic, built-in network.” 

But even so, it wasn’t a straight shot to starting her own company. She moved to LA and was recruited by another startup, Modnique, which she joined as VP of Marketing and Mobile Development. In July 2014, a private equity firm bought the company's assets and laid-off all employees. When it happened, Adam was on a backpacking trip, trekking the John Muir trail in the Eastern Sierras. She was quite literally finding a different path without knowing it. “It was a bit of a shock to come off the trail to no job,” but it’s something she says is simply “the nature of business,” and has been an invaluable asset in starting Iconery.

She had the big company experience. She had the startup growth experience. “Between the eBay experience, which was a true marketplace, and Modnique, which was true e-commerce, I knew there were pros and cons to both business models.”

One of Iconery’s main strategies to lowering costs is using CAD design software to create a 3D model that is fed into the 3D printer, which in turn prints the model in wax, and that wax model is cast in metal. They’re using technology to reinvent an age-old industry, and the company is at the intersection of fashion, e-commerce, and the 3D printing technology.

Stone Fox Bride14K Yellow Gold Skull Ring

Another strategy was making the deliberate decision to find a team of experts. She did a ton of research when building her team, cold emailing and reaching out through warmer introductions from past connections at eBay. The response was enthusiastic. The women she approached were excited about Iconery’s new take on the jewelry industry. Her team consists of an award-winning CAD designer, a woman who runs jewelry product development who has been in the jewelry industry for 40 years, and fashion industry veteran Andrea Linett, one of founders of Lucky magazine. “There are a lot of startups,” Adam says, “who think, let’s do this, we can be scrappy, let’s teach ourselves, and find young, cheap, talent. My team is a little more expensive than the average startup because we have incredible expertise.”

It’s the opposite of what we often hear: say yes and figure it out. It’s an approach that mirrors the kind Adam has taken with her entire career: strategic and thoughtful. 

However, she always says it’s so important for startup founders to understand their limits when it comes to uncertainty. “If not knowing whether the company you work for is going to be around in another month freaks you the fuck out, you’re not a startup person. It’s sexy to be in a startup, but there’s tradeoff. Being at Modnique really tested me, and made me very comfortable in uncertainty.”

Startup Tip: Understand your limits when it comes it uncertainty. 

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The business model was so compelling, and airtight, she knew she had to go for it. “I was looking to poke holes in Iconery, looking for any opportunity to find area of risk, and I had two other job opportunities. But I knew what I was aiming for.” 

“I had other options and I powerfully chose Iconery.” 

Arianna Schioldager is Create & Cultivate's editorial director. You can find her on IG @ariannawrotethis and more about her on this site she never updates www.ariannawrotethis.com

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Never Make It Perfect: Laurel & Wolf CEO Breaks Down How to Launch

LAUREL & WOLF IS THE FUTURE OF DESIGN. 

At least if Leura Fine, CEO and Founder of the interior design company that offers its services online only, has a say.  

An innovator in the online design space, Laurel & Wolf has developed a platform and software to allow for easy communication between a client and a designer, from anywhere. The entire service takes place in the digital world, and has opened the industry of interior design to people who never thought they could afford such services. 

We put 30 minutes on the clock with the busy entrepreneur to pick her brain on everything from bootstrapping your business to the future of tech. 

IN THE BEGINNING YOU MAKE IT WORK & GET IT DONE, NO EXCUSES

In January 2014 Leura began concentrating full-time on Laurel & Wolf. The first version of the site was up that month. 

"I was the algorithm" she says about the company's beta site, a very bare-bones version of what exists today. Instead of spending 100k on a website build out, she paid a local LA-based developer 5k to build out eight pages with no backend. "I started spreading the word through friends and friends of family, putting it out on social media, saying, 'Hey who is looking for interior design services that only cost 300 dollars?'"

She had about 1,500 people signup over the course of six weeks. The first iteration of Laurel & Wolf took users through a "style quiz,"-- that had no outcome. What Leura was testing was the public's interest. The BIG question: Would people be willing to pay for an interior design service online? 

"It was many, many long nights, of me staying up, calculating and emailing people their style quiz results. If you had this many As and this many Bs, you were 'Contemporary Eclectic.' It was terrible to demo, but between the MVP and servicing actual paying clients, we validated that not only there was a demand for the market, but what it would be like to acquire customers."

By the time they were ready raise money the company (which was two people at that point) also had a good, working idea of what the basic functions of the platform needed to do.  

[define it: Minimum Viable Product (MVP): In product development, the minimum viable product (MVP) is a product which has just enough features to gather validated learning about the product and its continued development.] 

By June 2014, just six months later, they had launched the site. 

WHEN RAISING MONEY, YOUR RESPONSIBILITY AS FOUNDER IS TO CONTROL THE PROCESS

The interior design world provides a service that typically 1 percent of the population can afford. People like venture capitalists and those with money to invest in the business. In the beginning, there was a little pushback-- angel investors who didn't understand the service, but what Leura had was proof: the basic function of what the service needed to provide. With that proof she had the confidence to control her fundraising. The goal of Laurel & Wolf's seed round was $500k. They hit $650k in a month and a half. 

[define it: Seed Round: The initial capital used to start a business. Seed capital often comes from the company founders' personal assets or from friends and family. The amount of money is usually relatively small because the business is still in the idea or conceptual stage.]

"I received this advice early on and tell every founder I meet who is fundraising the same thing," Fine explains. "You as the founder, your job is to control the fundraising process."

"You as the founder, your job is to control the fundraising process."

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She was resolute, telling potential investors: "'This is the amount we’re raising, this is the day we’re closing, you’re either in or you’re out.'" And she got it done that way. "I couldn't continue to chase people in circles, it was crazy towns. I had to build a business." 

In both Series A and Series B she took a similar approach. She was strategic and thoughtful, meeting with VCs when it made sense and getting to know them. When it came time to raise, it was go time. She took meetings, had term sheets by the end of those meetings, and then made decisions very quickly. 

[define it: Series A: Series A is usually the first level of fundraising where VCs get involved. The name refers to the class of preferred stock sold to investors in exchange for their investment. Usually in this round you will see the company's first valuation.]

Another part of controlling the process she says, is taking all of the multifaceted variables into account. "There are questions," she explains, "that you need to ask yourself when you talk about why you're raising money. Are you raising money to accelerate growth? Could you build this business without raising money? Do you know what your business model is? Do you know the metrics that you’re trying to hit?"

That's your job as founder: to have a business model and monetization strategy in place from day one.  

Your job as founder is to have a business model and monetization strategy in place, from day one.

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TAKE A SERVICE ONLY AVAILABLE TO 1% AND DEMOCRATIZE IT

It's a simple, but brilliant idea-- take a service that only a small percentage of households can afford, and open it up to more people. More people=more work=more revenue. 

"You’re talking about taking a small pool of people in the U.S. who could afford to hire interior designers. We’ve opened up the market to 30% of the U.S." 

This represents enormous opportunity for growing a consumer base, while offering designers the ability to extend the arm of their business. It's simple supply and demand, where both parties benefit. People get spaces they loves; interior designers get to do the work they love. 

"Design is more of a science than I think people realize," Fine says. "You don't have to be in a space to make it impactful. As long as you have good assets in place— whether that’s photos, video, and obviously dimensions, then you have the opportunity and ability to design just as well as if you were in person. And most importantly, make an impact in someone's life." 

CHICKEN OR EGG? DOESN'T MATTER, JUST LAUNCH

"I’ve been meeting with a lot of female founders," Fine says, "and I’ve had the same conversation the last three meetings. They tell me they want to wait to launch until they feel that they’re ready."

There is however, no such thing as ready. Sometimes the founders don't want too many eyeballs on an unfinished product. Sometimes they are worried about letting down a customer or not being able to deliver. 

But, Fine notes, "When you’re building a company from the ground-up there is always the chicken and the egg. You have to go for it. You have to put it out there and see what it does." 

"When you’re building a company from the ground-up, you have to go for it. You have to put it out there and see what it does."

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In the beginning Laurel & Wolf was far from perfect, but that didn't matter. "The last thing you want to do as a tech company is go out and build the entire working product from A to Z," says Fine. "You really have no idea what it needs to do and what it's going to look like."

Adding, "There is no such thing as perfect." 

THE FUTURE IS MAN & MACHINE, WORKING TOGETHER

"Our software," she says, "represents the best combination of humans and technology working together to really transform people’s lives. Our clients get to live a better way through the spaces that they spend time in." 

At the end of the day, she realizes that all the product recommendation and algorithms can’t predict how someone will feel in their space. But that’s where the designer comes in.

“A designer,” says Fine, “really understands, beyond the aesthetics of the space, the aesthetics of the person."

Arianna Schioldager is Create & Cultivate's editorial director. You can find her on IG @ariannawrotethis and more about her at www.ariannawrotethis.com

Startup 101: Your Year One Essential Checklist from Above the Glass

FEMALE ENTREPRENEURSHIP IS GROWING FASTER THAN EVER. BUT TO CAPITALIZE ON THE WHIRLWIND OF OPPORTUNITY, YOU NEED TO UNDERSTAND THE STORM FROM WITHIN. 

Enter, Danielle Yadegar and Heather Serden, co-founders of the freshly launched Above the Glass, an online platform providing women in business with straight talk interviews with women in business and actionable take-it-to-the-bank advice. Like free downloads, because Above the Glass wants to see you succeed. They believe that, "without a doubt economic empowerment and the capability to start businesses should be available for all women.”

So, if you are on the precipice of launching, download the Startup Essential Checklist from Above the Glass, and get the engine on your business running. 

To download the checklist, enter your information on the the form below and a link to the free download will pop-up. Good luck!