
Ask YC: Story for Forbes - How do you spend zero on legal fees? - wschroter
Doing a story for Forbes on how entrepreneurs can avoid legal fees by being a lot more creative and resourceful.  Anyone have some good methods they've used for getting employment contracts, stock option agreements, partner contracts, term sheets, etc. done for nothing?  I'm thinking this thread could also be a good resource for other readers on this board.
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thinkcomp
I fought a long and expensive legal battle all throughout college, which I
eventually won. I was able to get 50% pro-bono rates because I had started a
501(c)3 non-profit that had a related interest in the case.

I once avoiding having to hire an attorney to sue a non-paying client by suing
the company myself in small claims court for $30 in fees. You can't file
anything electronically, and the courts like old-fashioned cash or checks
payments in person, so it's anathema to the ways high-tech entrepreneurs, but
it worked. I got a check for the remaining amount the next day; the other
company simply didn't want to show up for court.

Writing blunt letters to the CEOs of large companies can be effective. I've
saved thousands of dollars in costs by writing letters. I inadvertently ended
up altering the manufacturing process for a well-known company's blade
servers, as well.

Writing blunt letters to lawyers who overbill you can also be effective. I've
been billed for other clients' time, billed double for a new attorney to join
a case due to the original attorney having to go on maternity leave, billed
for "this isn't my area of expertise" as advice, etc. The law firm may not
agree to work with you again afterward, but they won't make you pay if you
have a point. After all, they have bigger fish to fry.

Gold and platinum credit cards have extended warranty programs that will
usually take care of issues with faulty equipment that would otherwise
probably require a lawsuit to actually gain anything. I've saved several
thousand dollars thanks to such programs, as well.

Lastly, I was able to borrow some standard agreements from my family business.

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wschroter
all great points - can you drop me a msg at wschroter@yahoo.com so I can ask
some specific questions?

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pg
Law firms in startup hubs offer deferred-fee deals to the most promising
startups. Typically you can use up to $25k worth of time and they won't bill
you till you do a big (series A) funding round. Several firms, including those
regarded as the best in the Valley, offer such deals to all YC-funded
startups.

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iamelgringo
Do you need an introduction or a recommendation to get started with those
firms, or can you just call them up and make an appointment?

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pg
You need an intro. Ditto for VCs.

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NoBSWebDesign
So far, I've gotten all my legal stuff done by:

1\. Doing tons of research and being well-versed in the legal field. This is
good stuff to know anyway, so I put the time in at the beginning learning how
to do it myself. And you save a lot of money by drafting the documents
yourself (pulling from examples online) and then just paying a lawyer to
review them, rather than going to a lawyer and paying them to pull out one of
their standard templates.

2\. When it does come time to get a lawyer to review your documents, find one
you trust through personal referrals and then hope that their website needs
some work. Then, in you come to the rescue ;)

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wschroter
Thanks NoBS - do you remember any of the sites you tapped to get some of the
original legal terms?

edw - the idea for the article is that there is a fair amount of legwork you
can do yourself to avoid legal fees without wasting a ton of your time either.
For example, it takes less than 20 minutes to incorporate your biz at
MyCorporation.com and it's only about $300. I've done 3 companies through
them. So I'm just trying to provide entrepreneurs with some quick/easy
resources.

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NoBSWebDesign
Mostly, what I did at the time was googled something like "example operation
agreement" and went from there.

A new site I like is <http://www.docstoc.com>

Also, check out the Nolo series of books. Those are awesome and usually come
with a CD with a bunch of stock templates.

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dkokelley
Some cities (such as my own) have small business development centers that
offer free legal advice (free as in tax payers, unfortunately). I've also
talked to law professors at my school for "I can't provide legal advice, but I
would recommend doing x, oh and I also can't tell you that I would change y."

So, universities (if you're a student) and local small business development
centers are great resources if you're strapped for cash. The third choice
would be legalzoom.com. That's a last resort area for me.

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staunch
1\. Write some code.

2\. Register a domain.

3\. Copy and modify _Terms of Service_ and _Privacy Policy_ from someone else.

4\. Write some more code.

5\. Profit.

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sgoraya
I read the book: The Entrepreneur's Guide to Business Law

Great read with a lot of practical advice - This really helped me discuss
issues with potential attorneys. In addition, after selecting our attorney, we
were able to lower our cost by asking more pointed and specific questions.

Also, I was able to use some template documents that I worked with at a
previous job, to include: NDA's, Contractors, Term sheets - I took these
documents and massaged to our liking - In cases where we needed a more
'bullet-proof' contract, I forward my copy to our attorney for review. This
has saved a lot of money.

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mixmax
I think that the old adage "time, quality, money - pick two" applies here as
well.

I can get standardised contracts, NDA's etc. off the net, read through them,
google a little legalese, and put something together that works. The longer I
spend the better it gets. Of course a lawyer would be able to do in one hour
what I spend 15 hours doing.

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aaroneous
I thought the old adage was "smart, sexy, sane - pick two"... and it didn't
relate to legal fees.

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epi0Bauqu
I took a Harvard Law Class entitled Electronic Commerce that was immensely
helpful (and I wasn't otherwise a law school student). Also: Nolo, Lexis
Nexis, The Teaching Company, lawyer relatives, blogs, etc.

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edw519
You'd think that someone from Forbes would know that you get what you pay for.

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thinkcomp
It has been my experience when dealing with attorneys, who are usually priced
at around $350 per hour, that your statement is rarely true.

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daniel-cussen
So what is one to do? Hire a cheap lawyer? A young lawyer? An $800 per hour
attorney? None of the above?

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thinkcomp
It depends what you need done. Any corporate lawyer should be able to handle
an incorporation or vesting documents. They'll probably just hand it off to a
lower-paid associate (or if they don't, ask them to), so it almost doesn't
matter who you hire. They won't be doing the work. It does matter that you
trust them so that you're not surprised when the bill comes. On the other
hand, if you find yourself needing a criminal defense lawyer for a specialized
case at the last minute, you might very well find yourself paying that
hypothetical $800 per hour attorney.

In worst case scenarios, you can always harass law school professors, who are
sometimes amused by the interesting travails of undergraduates and non-law
graduate students.

Basically, just pray you never need to hire any of them.

