Vetting & Selecting a Trusted Business Counselor
While it is understandable that entrepreneurs are primarily focused on identifying and developing their ideas for a new product or service, eventually it becomes necessary to nestle those ideas inside a legal entity that will serve as the structure for launching a new business. While entrepreneurs are often put off by the notion of having to deal with attorneys and “legal stuff”, those who are committed to building a sustainable company realize that finding and engaging an experienced, thoughtful and creative legal adviser is extremely important.
Many entrepreneurs rely heavily on suggestions of their peers for recommendations of prospective lawyers and the experiences of colleagues can certainly provide useful information. However, forming a strong and reliable team of professional advisers is so “mission critical” that entrepreneurs should settle on a process to follow that covers several key features: identifying and understanding the legal advice that the entrepreneur will need during the launch phase; orderly exchange of information between the entrepreneur and the prospective attorney to determine the quality of fit and sketch out the scope of the initial activities and projects if the engagement moves forward; several conversations between the parties to assess “personal chemistry” and the ability and willingness of the attorney and his or her firm to take on the engagement and structure the relationship in a way that fits the entrepreneur’s financial situation; and negotiation of formal engagement letter that lays out the scope and terms of the attorney-client relationship. If the business involves multiple founders, the attorney should be able to counsel the group on prospective conflicts of interest to ensure that the specific needs and expectations of each founder are taken into account upon formation and organization of the new business. Finally, the entrepreneur should get a sense of how the attorney intends to build and manage the attorney-client relationship and grow to become a trusted business counselor of the entrepreneur.
The Growth-Oriented Entrepreneurship Project (www.growthentrepreneurship.org) has put together a toolkit that entrepreneurs can use to intelligently navigate the process of vetting and selecting trusted business counselors.