Start ups can have a hard time with lawyers. The traditional law firm can bog them down with strange language, hourly rates and an inflexible way of doing things.
A new breed of firm aims to be more responsive to entrepreneurial needs and a generation Y approach.
Recently profiled in Lawyer’s Weekly, Law Squared is an example of an Australian niche firm that focuses on entrepreneurs and their specific business needs.
Demetrio Zema, the founder of Law Squared, says that his firm does “a lot of education around some of those key areas of starting a business or growing a business or recapitalising, all those areas which entrepreneurs need and want”.
The firm, which has offices in Melbourne, Sydney and Brisbane, is eleven strong and was launched on the back of strong entrepreneurial expertise.
Mr Zema, a seasoned entrepreneur himself, praises a “relatable and approachable” rapport between lawyer and client and a flexible approach towards billing.
Law Squared, as an example, has thrown away the time sheets and eschews hourly rates. Pricing comes down to a “fee for service” or a membership fee, where all start up legal needs within a given scope are covered under a monthly plan approach.
When it comes to new start ups, Law Squared and another niche firm in the space, Michael Law Group in Sydney, focus on the getting the basics ticked off for a client.
“Most entrepreneurs and self-employed professionals that I meet generally go about their daily work without thinking too much about the legal aspects of their business”, says Mr Zema.
Things like business structure, basic contract hygiene and a solid understanding of the employee or contractor distinction are good start, points out Mr Zema. He also recommends that start ups think about what happens if there is a dispute, whether with a customer or within the business itself, and have a framework in place.
Vivian Michael, who heads Michael Law Group, focuses on helping new businesses and aims to make “legal services accessible to startups that would otherwise DIY, rely on legacy contracts or go without.”
Ms Michael stresses the ground rules for starting a business with friends, as an example.
Setting out expectations upfront is important, she writes. “It is a good idea to agree how to split accountability for certain roles between yourself and your co-founders and this could be based on your skill sets”.
“Written agreements help you to come back to what should be done when you feel that you are off track”.
In common with Law Squared, Michael Law Group takes an alternative approach to fees. The firm operates on a fixed fee model and bills up front, taking the uncertainty away from clients that are wary of letting lawyers loose on an hourly rate.
The ability to provide targeted assistance to start ups is a product of deciding what is and is not in scope. For example, Michael Law Group focuses exclusively on the transactional aspects of start up work and doesn’t deal with litigation.
While Law Squared offers a slightly broader scope under its monthly plans, its offering is also confined to the transactional and regulatory dimensions of a life as a start up.