Mission: Choose a Law Firm
As homework for the Founder Institute this week, Bill & I had the dreaded task of interviewing law firms. This homework isn’t busy work or assigned for the sake of getting experience in interviewing law firms but rather to decide which firm, we would engage to incorporate our company. I was not looking forward to this task because I didn’t know what to ask the lawyers or even how to determine which ones would be better.
To prepare for our meeting, Bill wrote up a few points to keep in mind, we had a brief animated discussion about the list he created because I was looking for 3 questions to ask each law firm to determine a base of questions we would ask all the firms that I could put in a comparison spreadsheet.
- We want to form a Delaware Corporation because investors and lawyers know Delaware corporate law.
- Discuss what is included in the incorporation package and how much it would cost.
- Discuss “F” class stock.
- Discuss whether the warrants we need to issue to Founder Institute would be included in the incorporation package.
Law Firm A: Small & Focused on Startups
Law Firm B: Big & Well Known
Our second meeting was a few blocks away. After checking in, we were offered coffee and cookies…score! We were directed to go to conference room 4 to wait since we arrived a few minutes early for the meeting. Upon walking into this conference room, I was WOWed by the view of the Space Needle; I wonder if all law firms in Seattle have great views. The receptionist informed us, the lawyer was running a few minutes late so we treated ourselves to a second cookie and took pictures of the view like tourists. At the start of this meeting, we gave a quick overview of our company then had discussion around what would be included in the incorporation package. Since this law firm represented larger companies that could potentially acquire us, I asked what would happen if there were a conflict of interest. This would be a concern for us as the “little guy” because we do not want to be out on the street looking for a new law firm if we were fortunate enough to be in talks to be acquired.
Postmortem: Interviewing Lawyers is Hard Work
We have 2 or 3 other law firms to interview in the coming week, I told Bill I was making my decision based on the quality of the cookies and coffee we are offered. All joking aside, this is a serious decision, much like entering into a marriage. All the law firms and lawyers we scheduled to interview have been recommended by a respected entrepreneur or mentor in the Founder Institute. On paper, they could be equal; we have to determine which law firm is “the one” who can help us push our company to its highest potential. Since we are bootstrapped, we don’t have the money to pay lawyers all sorts of money that could be better utilized to attract rockstar developers to join our team. Another consideration is which law firm could help us secure the most favorable terms in financing rounds and eventually help us with an initial public offering or to be acquired.
It is easy to be seduced by the beautiful views (equal between the law firms we met thus far), the cookies, and the coffee. We need to decide which one will be the best partner for our company in the early stages and throughout our growth. I will release my decision table once we’ve concluded our interviews in the coming week.
As an entrepreneur, are you ready to incorporate your company and start fundraising?
Law Firms – Links to Startup/Business Formation