In the three years that Priori Legal has spent developing its data-driven process for finding businesses the right lawyers for their needs, we’ve worked with a lot of tech startups and entrepreneurs. Our process asks a potential client to provide a brief description of the support required, and then based on those requirements, matches them with lawyers from our carefully vetted legal network. The matching is based on numerous criteria, including the lawyers’ detailed descriptions of their experience, skills and practice areas. Part of our role is translation: mapping client requests onto lawyer experience.
After comparing thousands of potential attorney-client matches, we’ve discovered an interesting trend: tech founders and entrepreneurs are often searching for words that don’t align with the way lawyers describe their skills. Our data shows that matches between entrepreneurs and attorneys are often sub-optimal because of some very basic semantic misalignments.
We have identified several common examples of misalignment that cause missed connections. Entrepreneurs and attorneys alike should take heed—a few simple changes to language could make the processes of both finding and delivering the appropriate legal resources much more efficient.
According to our data, startups are nearly four times as likely to use the term “co-founder” to describe their legal needs as startup-focused attorneys are to describe their skills. Startups often use the term in the context of, “co-founder disputes,” “co-founder agreements” or “founder agreements.” Attorneys who can add value to early stage companies are more likely to use terms such as, shareholder/stockholder agreements, membership/operating agreements, partnership agreements or partnership disputes to describe their experience in this area.
Startups are nearly three times more likely than lawyers to use the term “vesting” . Vesting is an important legal and financial concept in relation to startup equity, and it is clearly top-of-mind for both entrepreneurs and investors alike. By searching for lawyers with experience in company formation, financing, shareholder/stockholder agreements, and even option plans and securities, you can find the help you need on this important issue.
Delaware is often the jurisdiction of choice for companies because its body of business law is relatively sophisticated and well-defined. Startups are no exception. Nevertheless, lawyers are four times less likely to identify Delaware as an area of expertise than startups are to use that term when requesting legal help. The reality is that nearly all lawyers with experience in company formation, incorporation and registration are extremely experienced with Delaware corporate law.
“Terms of Service” or “Terms and Conditions”
Every online business should pay careful attention to its terms of service—these are legal contracts between the business and its users, and it is critical that the terms are prepared by a lawyer who understands the business and its legal obligations. Yet lawyers who work with startups are three times less likely to mention that they can help with terms than startups are to ask for help with them. Like with privacy policies, if a lawyer works in technology, internet law and/or e-commerce, startups can expect them to be able to help with these documents and details.
Why the Disconnect?
The disconnect between what startups are asking for and what lawyers are offering stems from the fact that, although startups need help with very specific problems, lawyers are accustomed to describing their experience in broad terms. A startup may need help setting up a business in Delaware, but in law school, there is no class called “Delaware Law.” The class is called, “Business Organizations,” and it just so happens to include a lot of Delaware law. It follows that when practicing at a firm, it doesn’t occur to most lawyers to list “Delaware Law” as a separate specialty because, in their understanding, it falls under their broader Corporate practice.
Similarly, most lawyers view the concept of vesting within the much broader question of a company’s stock plan. It’s obvious why the issue is important to so many founders whose financial outcomes are dependent on vesting, but for attorneys describing their practices, the term vesting is only one aspect of a much larger picture.
Bridging The Gap
For startups seeking legal advice, it is important to understand that specific needs often fall within broader legal categories; entrepreneurs can assist in bridging the information gap by educating themselves on these broader categories. Lawyers should also take on the responsibility of thinking about their practice from their prospective clients’ point of view, allowing them to better communicate the kinds of problems they can solve rather than only categories of expertise.
For our part, Priori Legal works to expedite the re-alignment process by translating lawyers’ offerings into entrepreneurial needs. We have developed a tool that maps the legal tasks in which our network attorneys are specialized on to the broader practice areas understood by our entrepreneurial clients. Using proprietary technology, we are helping to bridge the gap between lawyer descriptions and client requests, ensuring our clients get exactly the help for which they are looking.
For those looking to meet the old-fashioned way (i.e., Google), a little bit of linguistic education on both sides of the market can lead to better outcomes for all parties.
- Entrepreneurs Use the Wrong Search Terms To Find The Right Attorneys - October 13, 2016