Kleinsch

I recently switched my hours to part-time at my job to dedicate more time to the mobile game company I’ve started on the side. In doing this, I wanted to make sure the intellectual property I was creating for my games company would belong to me and wouldn’t get tied up in the IP agreement I’d signed with my employer when I started. I needed a lawyer. Having little experience working with attorneys before, I had no idea about the right way to go about finding somebody who could help my business succeed while not also bankrupting me. Here are a few things I’ve learned from going through the process.

The first thing to do is to get a list of possibilities together. I leveraged my personal contacts as much as possible, asking them for recommendations. If you’re on (or know people on) email lists of local entrepreneurs, that’s a great place to ask for suggestions. Hacker News can be a great resource also. Once I got the list together, I narrowed it down to 6-8 that were highly recommended and seemed to be in line with what I was looking for.

Every lawyer will give you an initial consultation to figure out more about your business and sell you on their abilities. This is a great time to talk about what you’re trying to do, as well as specific issues to try to get their opinions. Since you’re not paying for this, you might as well get as much advice as possible! They’re not going to draft anything for you, but if you’ve got conceptual questions, this is a great time to get them answered.

You also want to get some basic information about the lawyer you’ll be working with and their payment practices. Questions to ask during the consultation:

How much of your time is spent on emerging businesses or startups? - Legal recommendations are very different for small businesses versus the Fortune 500. There are so many lawyers out there focusing on startups that there’s very little reason anymore to work with someone who isn’t.

How much of your time is spent on technology businesses? – Someone who knows your subject area will know common practices and be able to give you better advice than someone for whom you have to explain basics. For example, there are ways to structure an apps business that make it easier to sell one of your apps to another company. Someone with experience will know when this is a good idea and be able to proactively suggest this. As above, there are so many attorneys specializing in working with technology companies that you might as well find someone who knows your business.

Are you full service? – Some law firms are “full service”, meaning they have departments specializing in most issues you’ll come across, like intellectual property, M&A, and litigation. That can be helpful, but usually comes at a price. Many startups can do fine (and save money!) with a smaller law firm. Many full service firms have offices in all the major markets, like New York, DC, and Silicon Valley, which can be helpful if you’re thinking about moving to or raising money in another city.

Are you the partner/associate that’s going to be doing my work? – At big law firms, many times the partner you talk to sells clients on the firm and handles high level details, but for day-to-day stuff you’ll be dealing with an associate. If this is the case, make sure you also talk to the associate. They’re going to have a lot bigger impact on your relationship than the partner. If you’re dealing with a one-person or boutique law firm, odds are good you’re talking to the person you’ll be working with, but it’s always good to check.

How much is your hourly rate? – Every lawyer is going to spin this differently, but there is definitely a case to be made for the rate vs efficiency argument. If you’ve got an inexperienced lawyer who’s going to have to do a bunch of research, they might charge you two hours for something that would take an experienced lawyer 15 minutes. This can add up quickly! If rate is a primary concern, a good balance can be found in somebody who worked at a big firm for years, then started their own practice. They’ll have lots of experience, but lower rates.

Is there a retainer required? – If you don’t have a lot of work to be done, putting down $5000 for a retainer makes no sense and can be a real drain on your finances. In many cases, you can work out an agreement where the firm will do work without a retainer as long as there aren’t an unreasonable amount of hours unpaid. When I was first starting, the initial work ended up getting completed in 2-3 hours, so I wasn’t a big payment risk. Obviously if you need hundreds of hours of work, they may evaluate the risk a little differently. This is usually negotiable and if they want your business, they’ll find a way to make it work. If you’re just starting out and don’t have a lot of legal needs, paying a large upfront retainer or a monthly retainer makes no sense.

Do you mainly work with clients who’re raising money? – Some of the big firm lawyers can help you raise VC or angel money through introductions to contacts. In many cases, they’ll float you the incorporation and setup fees in exchange for getting paid when you raise money, since closing a round generates a boatload of legal fees. This can be very helpful if you’re trying to raise money, but result in unwanted pressure if you aren’t. I was starting a lifestyle business, so raising money wasn’t a goal. One of the guys I talked to told me they mainly dealt with people who’re trying to get to a liquidation event, and most of their clients raised money. In that case my interests weren’t aligned with theirs, so we both agreed that working together wasn’t the best idea.

How much will it cost to incorporate my business? – If you’ve already incorporated, ignore this section. I was surprised at the variety of rates I heard for this service. If all you need is a standard business set up, it should be fairly affordable. Most lawyers I spoke to were in the $500-$800 range. Obviously if you have a lot of custom work required, it’s going to cost a lot more, but there’s no way you should be paying $5000 just for a fill-in-the-blanks operating agreement and incorporation papers.

Once you’ve met with everybody on your list, you should be in good position to decide. I’m no expert on the legal realm, so let me know if there are other issues I missed here.

You can discuss this on Hacker News.

I’ve been reading through Seth Godin’s Linchpin recently and of the main themes, one has been sticking out to me: shipping. Especially at the end of the year, you want to be able to look back and say “What have I accomplished?” I wish I could write a year-end post like his, describing the many things he completed and shipped in 2010. I’ve spent the last few weeks figuring out my major goals and steps I can take towards accomplishing them in 2011.

First and foremost, I want to start a product company. I’ve worked at two very different startups and enjoyed the challenges at both. I also feel that given my technology background and entrepreneurial knowledge, starting a company is the best chance I have for breakout success. I’m working on mobile games now, but feel that’s more of a hobby project. I don’t have enough of a passion for games to see myself still spinning out a few games a year 7-8 years from now. My opinion could change depending on how much success I have, but for the moment the games business is not my long-term focus.

In conjunction with starting a company, I’m interested in pursuing YCombinator or TechStars in 2012. They both sound amazing, could teach me a lot, and would have a huge impact on whatever business I start. They’re both also insanely competitive, so coming up with ideas, shipping products, and demonstrating that I can get things done this year would go a long ways. Between living arrangements, training for Ironman, and lack of preparation, I’m not going to be able to apply for 2011, but I think I could make a strong case for winter or summer 2012. Pinning all my hopes on a program that competitive would be foolish, but everything I’d need to do to prepare for a tech startup program would be beneficial if I decided to start a company on my own, so I think all of these goals are 100% worth it.

Given the big picture goals listed above, I came up with a few goals for 2011 that will put my in good position to achieve my long-term goals. I’m going to be tracking progress on these weekly to make sure I’m not falling behind on anything.

Launch three games – I think this is an attainable number that would teach me a lot, demonstrate that I can ship, and hopefully make some money.
Launch one non-game product or app – Creating and launching games is very different from any other type of tech product, so I’d like to put something else out there. It doesn’t necessarily have to be a big idea, but I’d like to get something substantial that takes a different type of thinking and marketing than casual games.
Come up with solid business ideas – In order to start a business or apply to the major tech startup programs, I need a real idea. They all say that the idea isn’t as important as the person, but it’s the idea that starts the conversation, so I might as well not have to overcome a terrible idea. I’m going to schedule dedicated time every week for industry research and brainstorming so this doesn’t get neglected. By the end of the year, I want at least one well thought out idea that I’d feel comfortable starting and working into a substantial business.
Read and complete all exercises from SICP – I feel like ever since I finished my math degree, I haven’t been pushing my brain as much as I used to. Once you learn a language enough to be productive, there isn’t much that pushes you mentally in day-to-day development. In 2011, I’m going to start every day off with mental exercise. Structure and Interpretation of Computer Programs gets recommended all the time and seems like a good place to start. Others have tried and completed this in a year, so I think it’s a reasonable goal.
Finish an Ironman triathlon – My girlfriend got me into this hobby last year and I really enjoy it. It’s good to have a completely non-technical goal to work toward so I can balance out my life and not sit in front of the computer all day. Completing an Ironman will be a huge accomplishment, it’ll get me in shape, and I’m sure it’ll be fun too.
Build better online presence – I feel like I’m smarter and work harder than my online presence or resume makes me look, so in 2011 I’m going to fix that. Many of my other goals will work toward this, like shipping four products, but highlighting my achievements, getting more content into my blog, and a better presence on some key sites will help a lot in convincing people that I’m serious. Specifically, I’m going to reorganize this site to highlight things I’ve shipped so people looking me up on Google figure out quickly that I get things done. I’m going to average one blog post per week throughout the year. I’m also going to try to get recommendations on LinkedIn, and keep a more active presence in some of the relevant online/Meetup communities.

That’s it for my 2011 goals. Stay tuned for more posts and updates on progress. Happy New Year!