

Law firm funded by venture capital? - workhard

Did you ever hear about law firm funded by venture capital?<p>I represent circle of 3 ambitious lawyers from France who would like to start a law firm and open 3 offices in 3 capitals of Europe.
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tstegart
Yeah, law firms in the U.S. are generally never venture backed, although
lawyers in Silicon Valley involved with start-ups get paid a lot in stock
options or get given stock in companies they do work for.

Most of the time its like Petercooper said, there are rules preventing
ownership by non-lawyers. The idea being that a lawyer should not be
controlled by a non-lawyer, because that person might pressure them to take
actions that are not in the best interest of a client. Its not as much a
privilege question (as tons of non-lawyers work in law firms) as much as it is
a perceived problem of having a non-lawyer control the lawyer's paycheck
(although that article does mention a public law firm would have disclosure
requirements under the SEC which could conflict with attorney client
privilege)..

For instance, in your example, a VC who controls a law firm will have vastly
different goals than the lawyers, whose goals should be to advance the best
interest of the clients.

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DaniFong
Generally speaking venture capitalists fund companies that can either be
acquired for a substantial sum, or that can go public. I don't know of any law
firms that have gone public, nor law firms that have been funded by VC's.

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petercooper
_Generally speaking venture capitalists fund companies that can either be
acquired for a substantial sum, or that can go public._

There are investors in other industries who would not have "go public" as a
condition, although they may not be VCs per-se. Law firms can be acquired for
significant amounts though and they're usually very profitable, so there's an
opportunity, but unlike technology/sciences/product development/retail it's
really hard to weigh up the factors surrounding a law firm to establish the
risk.

 _I don't know of any law firms that have gone public_

It's pretty much unheard of (the first went public in 2007 -
<http://is.gd/cDks>). There are lots of potential issues, such as loyalty to
shareholders affecting attorney-client privilege. There are laws in the UK and
US regarding this too. Don't quote me on this, but commonly non-lawyers cannot
own shares in law firms in the US.

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evbart
Yeah, VCs are looking for massively scalable businesses. Lawfirms require man
power, and thats not scalable, or at least not on the scale that a website
is....

