If you have a startup and a lawyer this is a must read! Avoid being overcharged!
Ways That Startup Lawyers Overcharge
medium.com
Ways That Startup Lawyers Overcharge
1–10 of 69 posts
Re: Ways That Startup Lawyers Overcharge
#2Although I wouldn't over-think this, if you've never dealt with counsel before this article is worth a couple of minutes to skim through. Just one example is probaly enough to highlight, but it is a classic: Resource double-up.
"You’ll have a conference call scheduled and they’ll invite additional attorneys to sit in. And they’ll charge you for it, even though they may not say a word during the meeting. Add a clause to your contract that says, “We agree not to bill you for any more than one attorney on any conference call with you.“
Re: Ways That Startup Lawyers Overcharge
#3A lot of these strike me as not only sneaky, but unethical and possibly even illegal. For example, as a software consultant I would feel I were committing fraud were I to bill two clients for the same hour of time.
Is there a different consensus around the definition of "billable time" in the legal world that makes this not as bad as it sounds?
Re: Ways That Startup Lawyers Overcharge
#4A lot of these strike me as not only sneaky, but unethical and possibly even illegal. For example, as a software consultant I would feel I were committing fraud were I to bill two clients for the same hour of time. Is there a different consensus around the definition of "billable time" in the legal world that makes this not as bad as it sounds?
Double billing for travel & work done during travel is definitely ethically verboten, and frequently specifically used by lawyers as an example of unethical behavior.
Re: Ways That Startup Lawyers Overcharge
#5It's good to know how lawyers overcharge, but it's better to find a trusted lawyer who you don't have to worry about.
We work with Yokum Taku and Jesse Chew at Wilson Sonsini, and they've been awesome.
Because I'm a former lawyer, I started out our relationship by scrutinizing every bill.
I stopped when I realized that we were getting an amazing deal. We have only paid 1 legal bill in 2 years and we haven't been bugged at all about it. Our legal bill is being subsidized by your Airbnbs and the like. That's the luxury of working with a great startup lawyer that works with top startups.
Re: Ways That Startup Lawyers Overcharge
#6If I were still an IT consultant and a client raised even half these issues with me, I would probably terminate my relationship with that client, because I don't want to be nickel-and-dimed.
If I would find this sort of pushback so irritating as an IT consultant, I presume a legal consultant would find it just as irritating. Why would you want to annoy an important consultant in this way?
Re: Ways That Startup Lawyers Overcharge
#7If I were still an IT consultant and a client raised even half these issues with me, I would probably terminate my relationship with that client, because I don't want to be nickel-and-dimed. If I would find this sort of pushback so irritating as an IT consultant, I presume a legal consultant would find it just as irritating. Why would you want to annoy an important consultant in this way?
Were you doing this as an IT consultant? Where you double billing for your time? Were you changing rates without warning?
Re: Ways That Startup Lawyers Overcharge
#8Half of these are unethical (i.e., they violate actual, binding rules of professional ethics with actual consequences).
The other half should be spelled out in the engagement letter. If you don't like it, tell your lawyer -- we really will negotiate on these issues.
Re: Ways That Startup Lawyers Overcharge
#9I won't say that this post is devoid of useful information, although there are some questionable claims (such as the notion that an attorney is double billing for travel-related work). More importantly, however, I think it misses a more fundamental mistake that startups make: they don't know how to choose a lawyer.
If you're working with a firm that has summer associates (referred to as "law students" in the post), and they are being billed out at $200/hour, you are almost certainly working with a large, full-service law firm. And large, full-service law firms are expensive.
Working with a large, full-service law firm is overkill for the vast majority of early-stage startups. Even when it comes to securities-related work, you can find reasonably-priced experienced, competent practitioners with BigLaw backgrounds who work solo or at smaller firms.
Re: Ways That Startup Lawyers Overcharge
#10It's good to know how lawyers overcharge, but it's better to find a trusted lawyer who you don't have to worry about. We work with Yokum Taku and Jesse Chew at Wilson Sonsini, and they've been awesome. Because I'm a former lawyer, I started out our relationship by scrutinizing every bill. I stopped when I realized that we were getting an amazing deal. We have only paid 1 legal bill in 2 years and we haven't been bugg…
Yokum's personal site startupcompanylawyer.com has a ton of useful "self-help" information too. It's a great resource.