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How to Convince Start-Ups That They Need In-House Counsel

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By Casey C. Sullivan, Esq. on May 26, 2016 6:59 AM

New start-ups need many things: the best young talent, a fair amount of funding, sometimes even gourmet lunches and on-hand masseuses. But what they don't need is lawyers. After all, many start-up behemoths like Uber and Airbnb started up with business plans which skirted or even ignored the law.

Or so the typical tech thinking goes. A start-up's job is to "move fast and break things" and lawyers are the suits who say "no." But, according to a recent article in the Harvard Business Review, attorneys can bring many valuable skills that are needed at young start-ups. So if you want to be in-house counsel for a start up, here's how to convince them they need you.

Learn From the Failures, Not Just the Successes

There's an obvious benefit to having an attorney onboard when a company is young: lawyers know the law. And while Uber and Airbnb might be in long-running litigation and political struggles over the law, less successful companies have simply gone belly up as a result of their legal transgressions.

Take Leap Transit, for example. The "luxury bus" company wanted to "disrupt" San Francisco's awful commutes. So they bought up a few buses, designed them to look hip, created an app and the free press came pouring in. But they also forgot to make their vehicles ADA compliant or obtain a proper permit. After some early buzz, they were off the road and out of business. A lawyer on the team may have been able to keep the company alive.

Moving Beyond the "No" Man

Lawyers can bring more than legal knowledge, as well. As Daniel Doktori, chief of staff and GC at Credly, and Sarah Reed, COO and GC of MPM Capital write in HBR, "a lawyer on the early team can contribute to a thriving company culture by asking the right questions at the right times, providing perspective on crucial transactions, and getting smart fast on issues where the rest of the team lacks expertise."

Indeed, part of what makes lawyers valuable is what they don't know. "Counterintuitively, lawyers can add the strategic absence of knowledge," Doktori and Reed write. "Having a lawyer on the early team contributes to data-driven, analytic culture of thoughtful decision making."

The lawyers the one who picks through documents, reads the fine print, makes sure that claims are backed by evidence, particularly when dealing with the complex deal making that early companies often experience. That frees up the rest of the company to do the "move fast and break things" stuff.

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