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When Does A Startup Need A Lawyer?

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Does My Startup Need A Lawyer?

Have you begun building your B2B software sales pipeline and encountered customers seeking contract negotiations? Or you’re bringing on more employees and partnerships and you’re starting to wonder when does a startup need a lawyer? Should you hire in house or keep going with an external lawyer partner? Startups often have to deal with the time-consuming challenge of contract negotiations, slowing their sales cycles to a grind. Managing legal teams, aligning pipeline deadlines, and gaining insights from senior leaders on contract inclusions add complexity to the process. This is where you can start to consider if your startup needs a lawyer.

Using sales contract templates or NDA templates for your startup can be a convenient and cost-effective way to create legally binding agreements with your customers or clients without having a full time in house legal person. It’s crucial to exercise caution and ensure any template you use suits your specific business needs and complies with relevant laws. Here are some considerations:

Customization:

  • While templates offer a starting point, customizing them (with legal assistance) to match your business’s unique aspects and transaction terms is vital. This may involve adjusting pricing, payment terms, delivery schedules, warranties, and other provisions. This may involve adjusting pricing, payment terms, delivery schedules, warranties, and other provisions.

Legal Review:

  • Even with a template, it’s wise to have a lawyer review the contract (especially for short and simple contracts, an external legal review suffices) to safeguard your interests and ensure compliance with laws, particularly in highly regulated industries or contracts involving complex legal issues.

Clarity and Transparency:

  • Make sure that the language used in the contract is clear, understandable, and free of ambiguity. This helps to avoid misunderstandings and disputes down the line. If necessary, seek input from a legal professional or someone with expertise in contract drafting to ensure clarity and enforceability.

Applicable Law:

  • Consider the jurisdiction where your business operates and where your customers are located. Ensure that the contract specifies which state or country’s laws govern the agreement and include any necessary provisions to comply with local regulations.

Updates and Revisions:

  • Regularly review and update your contract templates to reflect changes in your business practices, industry standards, or legal requirements. This ensures that your agreements remain relevant and effective over time.

Use of Online Resources:

  • There are many online resources offering sales contract templates, including platforms like DocuSign, PandaDoc, and Rocket Lawyer. These can be helpful tools, but exercise caution and diligence in selecting and customizing templates to suit your needs.

While using sales contract templates can be a practical solution for startups, it’s essential to approach them thoughtfully and ensure that they are tailored to your specific business requirements and comply with applicable laws. When in doubt, seek guidance from legal professionals to help protect your interests and minimize risks.

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When Does My Startup Need A Lawyer?

Hiring a lawyer for your startup is something that is essential for some things but an external legal resource can help with a lot in the mean time. They can provide valuable guidance and protection as you navigate legal matters. Here are some key milestones and situations that would tell you the answer to the question ‘when does my startup need a lawyer?’

1. Formation:

  • When you’re starting your business, you’ll need to choose the right legal structure (such as LLC, corporation, partnership, etc.). A lawyer can advise you on the best option based on your goals and circumstances.

2. Contracts and agreements:

  • Whether it’s drafting contracts with employees, contractors, suppliers, or partners, having a lawyer review and create these documents can help protect your interests and ensure clarity and enforceability.

3. Intellectual property (IP) protection:

  • If your startup’s success relies on unique inventions, branding, or creative works, it’s important to protect your intellectual property with patents, trademarks, or copyrights. A lawyer specialized in IP law can help you navigate this complex area and ensure your rights are safeguarded.

4. Regulatory compliance:

  • Startups are subject to various regulations depending on their industry and location. A lawyer can help you understand and comply with relevant laws regarding taxes, data protection, employment, permits, licenses, and more.

5. Funding and investment:

  • If you’re seeking funding from investors or planning to issue stock options or equity, a lawyer can assist with structuring deals, drafting investment agreements, and ensuring compliance with securities laws.

6. Disputes and litigation:

  • If your startup becomes involved in disputes with employees, partners, customers, or competitors, having a lawyer on your side can help protect your rights and interests, whether through negotiation, mediation, or litigation.

7. Expansion and growth:

  • As your startup grows, you may encounter new legal challenges related to hiring more employees, expanding into new markets, entering into partnerships, or acquiring other businesses. A lawyer can provide ongoing support and advice to help navigate these transitions smoothly.

It’s advisable to involve an external lawyer early on in your startup journey, especially for critical matters such as entity formation, IP protection, and contract drafting. Additionally, having a lawyer on retainer or seeking legal advice as needed can help you proactively address legal issues and minimize risks as your startup evolves. Once you get to a size that you’re doing a number of sales deals this could be the trigger that tells you to hire an in house lawyer.

The question for startups is not whether they need a lawyer but how efficiently they can get by with their legal resources to make sure they can spend money in growth areas of the business. Contract Sent has been build as a tool to allow you to better manage your legal resources and team.


Contract Sent is not a law firm, this post and subsequent pages on this website do not constitute or contain legal advice. To understand whether or not the ideas and guidance on the Contract Sent website is applicable to your business, you should consult with a licensed attorney. The use and accessing of any resources contained within the Contract Sent site do not create an attorney-client relationship between the user and Contract Sent.

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