08 Jul 2014

Tricky Business: Working with lawyers

By Melanie Hayes

Starting a business invariably involves doing things you’ve never done before. Often some of the most mysterious, and occasionally daunting, aspects of running your venture are contracts, applicable laws and working with lawyers. Here’s four tips from our experience to make working with legal eagles a breeze:

Work out what you want

Things work best when you and your lawyers know exactly what’s expected of one another. Before you ask them to do a piece of work with you – arrange a meeting to discuss your plans first. If either of you is into jargon you can refer to it as a ‘kick-off’ meeting. Lawyers love those.

You should use this session to explain the commercial matter that you’d like them to help with and to ask questions about the legal implications involved and the steps you need to take. Most good lawyers won’t charge you for this meeting. So that’s an extra reason to make sure you have it.

Get engaged

You should follow up this meeting with an email to your lawyer setting out the scope of work you agreed as a result of your discussion. Be clear about what you expect them to draft versus what the other party is preparing for example. Make sure your lawyer agrees with this scope and ask them to point out anything you’ve missed.

Once you’ve fixed exactly what you’d like them to do, ask them to give you a fixed price quote for that work. All lawyers worth their salt will do this. But bear in mind, if you change your mind about what you want, have missed something out or need lots of versions of a document then they will charge you for their extra time. Make sure you ask them to warn you before they go over their quote though so you can agree whether you’d like them to or not.

Your lawyer should summarise all of this in an engagement letter to you. Insist on one.

Make a list

A documents list is one of the most useful things you can ask your lawyer to produce for you. Its a thrilling read. Essentially, a list of all the contracts, board minutes, companies’ house forms and other pieces of paper that need to be drafted, agreed, signed and, in some cases, filed to complete your deal.

Armed with a documents list you’ll have a step-by-step guide to what needs to be done and by whom – including who needs to sign what and when. Incredibly handy if you’re doing anything vaguely complex or with several stages – restructuring your company and raising investment are prime candidates for these.

A little chemistry goes a long way

Although they’re much maligned – many lawyers are very nice people. Find one you like and trust before you start working together. It’s like every business relationship, if you get on well it’s infinitely easier to navigate any sticky or pressurised situations. Trust your gut instincts, if you think they’re a spiv, too cagey or don’t have time for you – steer clear.

They explain, you decide.

Because lawyers are experts in all things legal you might expect them to have all the answers. One of the most important aspects of your relationship with your lawyer is that you have to make all the decisions. Whilst their job is to explain to you the risks and implications of the matters at hand – its down to you to take the commercial decisions and work out which risks you’re willing to take. If you have already thought about the key commercial terms before you ask your lawyers to prepare an agreement – you’ll save lots of time and money. Its worth asking them during your ‘kick-off’ meeting exactly what those important commercial points are so you can get cracking on them upfront.