How Startups Can Save on Legal Operations Expenses
Jan 3, 2023
Legal expenses can burn a hole in an entrepreneur's pocket, especially if you have just begun a new venture. They face many questions and concerns relating to legal and finance, which can be mental obstacles in the early days. While it takes some work and a course of appropriate steps, it can be done by seeking proper guidance.
Here are some ways through which startup owners can cut down the legal expenses:
Look for a Lawyer Online
Hiring a SaaS lawyer can cost you anything between $500 and $1,000 per hour. However, looking for a lawyer on platforms like UpCounsel or Upwork can tremendously bring down the cost to even $50 per hour. On Upwork, you can submit your requirements, and lawyers from across the world will place their bids. You can then filter the profiles that suit your needs, negotiate the deal, and start your legal work instantly.
On the other hand, UpCounsel is very selective with the attorneys who sign up for their services. This is because they prefer quality over quantity and ensure that their lawyers are in good standing with their respective states. UpCounsel runs a thorough background check to make sure the clients are served with the best.
Utilize Free Templates for Contracts
Your SaaS deals can be laboriously negotiated over a period of months. Law firms and other online resources offer free contract templates that startup owners can easily use. These resources enable you to create a draft, a primary contract that can be used for further discussions.
They also provide models of bylaws, founders' stock purchase documents, director- and officer-related documents, employment and consultant documents, and technology-related documents. You will need help reviewing these documents once you are done, and you need to get in touch with a lawyer. This way, you can save money since reviewing contracts is way more economical than creating the contracts from scratch.
Invest in a SaaS-Based Platform
The technology used by such platforms empowers startup owners to review and manage their legal documents, especially contracts, licenses, and permits. In addition, the dashboard gives you an overview of all the upcoming, ongoing, and pending tasks. Cloud-based platforms like Traact not only streamline your contract, licenses, and permits but also take care of the entities, disputes & litigation and help with board management. Additionally, since everything is stored securely on a cloud service, the risks involved with privacy and breach are mitigated. Your documents are safe, and only authorized people can access them. And the costs involved are way lesser than hiring a full time law firm.
Look for a Law Firm that Accepts Equity as a Fee
Nowadays, many lawyers are investing in startups that they also take care of legally. But sometimes, there can be a conflict of interest in being the lawyer as well as the shareholder in the venture. To avoid so, a lawyer can create separate funds to hold the equity and require their startup clients to sign a waiver of any conflict claims.
The equity stake and the cost of the legal services to be exchanged can both be limited. Therefore, this could be a viable short-term strategy for financial savings on legal services. But before signing the document, assess the pros and cons thoroughly!
Outsource Some Legal Tasks
Consider hiring an outsourced general counsel if your business is tiny but not so small as to avoid administrative and corporate expenses like board meetings, HR compliance, insurance, and the like. It's comparable to hiring an in-house attorney on a part-time basis. Many firms provide limited legal counsel services, which are flexible: You can meet with an attorney face-to-face, online, or one day per week. You will save crucial time and be aware of the expense because the counsel must work a few hours each week to handle time-consuming duties.
Saving on legal expenses is the ultimate goal of any startup. If you'd like to know how Traact can help you with this, book a free demo with us.