Startup Founders: Don’t Let Your Attorney Lawyer You

Clint Costa

March 12, 2013 · 3 minutes read

Uncategorized

Every Wednesday night during law school, my friends and I would head to the bar for “Bar Review” (creative name, I know). We typically talked about what important work we were doing at our respective internships. Drinking $1 beers made this all seem sophisticated.

During one of our nights out, a member of our group decided to go out on a limb and substitute onion rings instead of fries as accoutrement for his burger. To his utter dismay, our regular waitress pointed out the fine print at the bottom of the menu which read “Fries may not be substituted without additional charge.”

In a state of shock and disappointment, my friend did the only thing he could do: he began to lawyer.  He pointed out (and rightly so) that using the word “may” destroyed the force of the no-substitution rule.  To properly disallow substitutions, the menu should have said “shall not” or “cannot.”  Five minutes and some additional back and forth later, our waitress relented and our friend got his way; our usual deeply discounted bill was replaced with a full charge for everything else except the onion rings my friend proudly pointed out.

The battle was won, but the war was lost. It was hard to blame him since all of us would have jumped at the chance to put our legal skills to the test in the name of saving $2 on onion rings. Players gotta play, right?

Now, let’s fast forward. When you next have a conversation with your lawyer, remember this story and don’t let your attorney lawyer you.

The natural inclination of lawyers is to manage risk. That’s one of the things we’re good at in the context of applying the law to a set of facts.  Experienced lawyers have also seen things go bad, so we’re aware of risks that our clients sometimes are not.

Startups have to accept and embrace risk in a way that established companies do not. While Walmart handcuffs risk to a radiator in the basement of its headquarters, startups must dance with risk, have dinner with risk, and maybe even lead risk on a bit before calling it a night. Not all lawyers understand this very basic difference in business mentality.

But as my onion ring example proves, lawyers will lawyer.  It’s in our blood.  Your job as the starter is to make a business decision about the risk, and not the other way around.  Don’t let the tail wag the dog.

Here are a few examples to describe what I mean:

  • If your lawyer tells you that doing X and Y will get you sued, ask which one is less likely to get you sued.
  • If your lawyer frets about some business you’re in that makes you money, ask how to reduce the risk without killing the golden goose.
  • If your lawyer can’t explain the risk simply and without involving at least two intervening events that must occur to cause the risk, ask about the likelihood of the risk and the dollars at stake and then make a business decision.

Your lawyer is never going to stop pointing out risks, large and small.  It’s your job to make a business decision out of good sense, not fear. In other words, don’t pay full price for beers just to save $2 on onion rings.

1 Comment

  1. I’d add, make sure if you are doing a startup that your lawyer really understands how to lawyer for startups. Have seen a lot of startups get messed up through bad lawyering that didn’t understand how to structure deals.

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