Ways That Startup Lawyers Overcharge

(1) If you're unhappy with your bill, PUSH BACK ON IT. Even if you like the partner that you're working with, a substantial portion of your bill will be generated by paralegals and associates like me. And, as an associate, my marching orders are to account for every last minute of my day, even if I think it was an unreasonable thing to bill for. In theory, the partner is supposed to see these items before they go out and make a judgment call on whether to write it off, but more often than not, the partner will eyeball the total amount without looking too closely at the details.

Case in point: When I was a founder, a paralegal at a well-known law firm made a mistake with our cap table and left off a single share. We ended up getting billed $300 to find that single share. When we changed firms a year later, we mentioned this to the partner, who was surprised and had no idea this had happened (despite ostensibly signing off on the bill).

(2) Check in with your lawyer regularly -- doesn't have to be a phone call. A quick e-mail will do. Bills often come in monthly intervals, and fees can rack up pretty quickly in that time. As a lawyer, I'll often start work on a new matter only to find out that my work is no longer required after several weeks have passed and I've already billed the item. Regular check-ins can help avoid this. In addition, it'll be easier to draw connections between vague descriptions on your bill ("Attend to cap table") and what actually happened ("find missing share that paralegal left out"). As a side benefit, regular check-ins result in faster turn around, especially if there are multiple matters competing for your layer's attention.

(3) Second opinions can be free. If you're unsure about the advice your getting from a lawyer, ask a lawyer at another firm. Those other lawyers will view this as a chance to poach a client and will write their time off as business development. As a side benefit, those lawyers may point out mistakes that your current law firm didn't catch or is reluctant to admit to.

But people tend to, in addition to doing the subjective "good work" [1], they refer people that they like personally or who encourage the type of relationship building that leads to more work. [2]

Also, in theory at least, if an attorney ends up being referred a great deal and has a nice book of business they would raise their rates and/or push work off on subordinates, right?

[1] And how, with legal work, do you know if it's "good" until the shit hits the fan or there is a problem?

[2] Even physicians are susceptible to this (but less so). I don't want to know who you like personally or who you know but who you think does a really good job as a clinician. And maybe you hate that person or their personality. That's fine. I just want someone who is good I don't care if you like having him over for dinner. (Had a girlfriend once whose father was a surgeon and they were always entertaining the family practice doctors so they could get referrals. He was a jerk to his family but he was sweet as sugar to the other physicians who he needed.

If my friends and cofounders tell me "John S is an excellent programmer!(or marketer, or designer)" I cna trust that. They know the industry, they know the skills, and can formulate informed opinions.

If those same people tell me "John S is an excellent attorney!", I can't trust it. They don't know anything about the legal profession other than the bill they get. They don't even necessarily know what to look for to indicate that John S is an untrustworthy git .