Hiring a Lawyer For Your Business

About this video

Dan Martell, who says he has spent nearly $1,000,000 on legal fees in his career, outlines three mistakes software companies make when choosing a lawyer. First, staying with a family or small-town lawyer for advanced corporate work: his first lawyer, introduced by his father, handled incorporation and simple filings well, but was out of depth when Martell needed an IP ownership agreement with a large company like Procter & Gamble and when revenue and customer contracts grew. Second, using the wrong specialist for the job — what he calls the wrong horse for the course. Different matters need different experience, and a firm that has not handled a funding round or exit many times may over-paper a deal or use it to monetize free early work; in one acquisition he describes, in the single-digit millions, the seller’s counsel drafted as if for a much larger deal, threatening to push legal costs well beyond the budgeted range until the principals intervened. Third, taking referrals from conflicted sources such as an accountant who gets referrals back. He recommends referrals from other tech founders in your city, from a local technology accelerator’s legal partner, and from online rankings of top startup firms, then interviewing partners personally to find someone who will give direct counsel on what is normal in a situation, not just list options.

Key takeaways

• Upgrade from a family or generalist lawyer once you sign large customers, raise money, or handle complex corporate and IP matters.
• Match the firm to the specific job: ask whether they have handled that kind of transaction at least a dozen times.
• Set a legal budget up front and ask the lawyer to alert you at the halfway point if the work is only fractionally complete.
• Do not rely on an accountant’s lawyer referral, because reciprocal referrals can bias the recommendation.
• Source referrals from peer tech founders, accelerator legal partners, and ranked startup-firm lists, then interview for personal fit and willingness to advise directly.

Episode details: published February 20, 2023 · 12:33 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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