A few months ago, we lamented the fact that the cool disruptive legal tech startup field was woefully short on actual lawyers that might provide useful information about how legal tech should work. The comments were, shall we say, spirited, with some folks asserting that good tech is good tech and you do not necessarily need the assistance of some Luddite lawyers. Lawyers might have the last laugh, however. According to the Harvard Business Review, we could be good for all sorts of startups.
Lawyers can add value in the obvious ways, helping to avoid early mistakes like issuing stock too late in the game, when the company has grown in value and the employees can no longer take advantage of favorable tax treatment. But more importantly, a lawyer on the early team can contribute to a thriving company culture by asking the right questions at the right times, providing perspective on crucial transactions, and getting smart fast on issues where the rest of the team lacks expertise.
The article notes that the first set of skills-being a smart tax lawyer, for example-are great, but can be handled by outside counsel. For an attorney to add enough value as a full-time employee, they need to have a mindset that is both highly detail-oriented and risk-tolerant.
For one thing, she must be willing to give up her plush office and lucrative salary for a computer station at a long table and compensation in the form of prayers, otherwise known as stock options. Her professional risk tolerance must follow suit. An essential attribute of a business attorney is providing “risk-adjusted” advice, and the level of tolerable risk for a startup generally far exceeds that for a Fortune 500 company. Lawyers at startups need to recognize that a workable answer today is often preferable to the perfect answer tomorrow; hand-wringers need not apply.