Ways to Save On Startup Legal Fees

If you're starting up a business there will come a time when a good lawyer will be your best friend. However, that doesn't mean you need to utilize their bill-by-the-minute services for every legal decision you make. There are ways to avoid legal fees. Consider these options:

Go Boilerplate

If you've ever signed a renter's agreement for an apartment you were probably using a boilerplate contract. This is a template agreement already drawn up by a lawyer and is readily accepted by both sides. You might find that many of business contracts can use boilerplates that are available for free on many online legal resources sites. These contracts can include:

• Commercial building lease agreements
• Employee contracts
• Vendor agreements
• Non-disclosure agreements

Just because you're using a boilerplate contract doesn't mean you can't put in your own terms, dates and names. That's what these contracts were created for. Here's a dirty little secret: You know that expensive lawyer you hire to write up your contracts? They use the same boilerplates. You didn't think they wrote every word of a new contract did you?

Ask For a Fixed Fee

Much like the boilerplate contracts, there are also boilerplate services. Filing for a trademark or setting up a corporation are pretty much routine. The only changes that are made are the names in each of the contracts.

Does this mean you should be paying a lawyer by the hour to get those papers in order?

Not at all.

Ask around and see if you can find a lawyer to handle those kind of for a fixed fee. That means whether it takes them two or 20 hours it will only cost you one price

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You could also offer stock options in exchange for legal services. The caution with that is giving away too much for the kind of "simple work" mentioned above. Your new investors might not be happy about that.

And, if you want to avoid hiring a lawyer for basic corporate services, consider using a document filing service (like CorporationCentre.ca!) to submit your paperwork at a much smaller fee than a lawyer may charge.

Part-Time Lawyer

You might find that after your initial start-up filings you don't need a lawyer all that much. However, you're now stuck paying a hefty monthly retainer to a law firm. Not a wise move.

Instead, look for a firm that can provide you with a part-time attorney. This is someone you can talk to once a week for a reduced fee. Save up your questions and make that weekly meeting count. You can also look into legal insurance. You pay a small premium in exchange for getting a lawyer only when you need them. That's a lot less than the big retainer fee.

If you should ever come across a complicated issue with taxes or find yourself being sued then you don't want to turn that into a DIY legal matter. Get a good lawyer on your side. For everything else, look for flexible options from your legal firm.

Starting Your Business with a Clean Slate

Breaking up is hard to do. That's true for relationships and also for ending your contract with an employer.

Whether you're moving on to start your own business or have been hired at a company that could be considered a competitor, you'll want to make sure you can start your new job with a clean slate.

A lot of the following issues might be covered in your employee contract. It's worth discussing with an experienced lawyer to make sure you can get up and running without a potential lawsuit slowing you down. 

Here's what to look out for:

Intellectual Property

It is obvious that anything you created or invented during work hours for your company is owned by that company. This would be considered intellectual property. Where it gets fuzzy is any work you did on the side during off hours. Things could be further complicated if you used any type of company equipment like a computer or software for your own inventions. There could be a strong claim for that property you created.

Non-Competition

It stands to reason that if you're good at your current job, then your start-up would be related to your skill set. That might be cause for concern if you are going to be in direct competition with your current employer. Most contracts have a non-compete clause that can last up to a year. It might take that long to line up your investors and launch your business but you'll you might be restricted from doing any kind of work that is deemed "the competition." Worst-case scenario, you sit out the year and spend it planning.

Non-Solicitation

This is often referred to as the "poaching clause." Just because you've created solid working relationships with a lot of clients doesn't mean you can "steal" them all for your new business. It's a tricky area. A client can go to any business they want as long as they don't violate a contract. The mere fact that you're starting up on your own might be enough incentive for the client to jump ship. From a legal standpoint you'll be covered if you don't actively solicit that client.

If you have doubts about any of these areas then you'll be better off checking with a lawyer. Additionally, you should consider your future plans when accepting any job. If your goal is to become your own boss then a restrictive employee contract which prevents that from happening might not be worth signing.

There is nothing wrong with negotiating. Just make sure you're not getting trapped into a contract which will stop you from pursuing your dreams.

Losing a Valuable Employee

What happens when a valuable employee resigns? First, don't panic.

After all, how many times have you moved from job to job? This is not an uncommon occurrence. Now that you're the boss you can't just throw a going away party and wish that person well.

There are certain steps you need to go through to make sure this is a smooth transition and everyone is on the same page.

Step 1: The Exit Interview

There should be no hard feelings when an employee resigns, especially if they are moving on to a different opportunity or opting to spend more time with their family. Just as you would with a client or vendor, you don't want to burn a bridge with a good employee. Who knows where they will land or if you might need them to consult for your company. If it is a situation where you know a competitor has made them an offer they can't refuse (and you can't match) let them know you appreciate their work.

Step 2: Recall the Non-disclosure Agreement

Hopefully, every employee working for your company signed a non-disclosure agreement before starting work. As they are leaving, it is a good time to remind them of their obligations under this contract. Technically, if they signed the agreement you don't have to remind them because it is legally binding. Just make sure they have a copy before they head out.

Step 3: Let the Company Know

When a valuable member of your team has decided to move on it won't be a secret for long. You still want to get out in front of the news by making some sort of official statement to the rest of the company either in an email, memo or announcement. Hopefully, there will be an opportunity for your former employee to train the new hire. You can also have that going away party to allow everyone a moment of closure. Then it's back to business.

Step 4: Ask For a Written Duty Log

The employee who is leaving might have taken on tasks you're not even aware of. It will be a big help if they were to write down all of their tasks and responsibilities. This is a document they can hand off to the person taking their place. This log should include all the usernames, passwords, email accounts and other company online access issues. This is another reason why you don't want to make this resignation awkward: You still need that employee's help!

Step 5: Call Up a Recruiter

You should know exactly how much time you have to fill the position. This doesn't mean you need to rush to find that new person. Put a recruiter to work to find the best candidate. Perhaps your old employee might even have a recommendation. If they aren't moving to another job, you can also leave the door open for future freelance work.

No matter how important this person was to your business, it's not the end of the world when they leave. You'll press on and might just find that a new member of the team is just the shot in the arm your company needs to take it to the next level. 

How to Protect Your Idea without Using a Patent

Taking your idea from the drawing board to the store shelf is going to take many months (or, in some cases, years!) of dedicated work. During that development process, someone could swoop in and steal your idea right out from under you.

At least that might be your biggest fear.

This is why you want to make sure your product or idea is patented, right?

Although that may make sense, during the development and start-up phase filing for a patent can be a costly and time-consuming process. So, should you put your great idea on hold?

Absolutely not! Here are some ways you can protect your idea without using a patent.

Non-disclosure agreement (NDA)

If you have any proprietary information or plans that you're going to share, you should make sure you get a non-disclosure agreement signed by that person before you show them anything. This is a binding contract that compels the second party to confidentiality. They can't talk about your product or idea to anyone else without your permission. You can get a lot of work done with a NDA without worrying that your idea will get stolen as it is developed.

Non-compete agreement

This is an agreement you sign with someone you are hiring for your company. It will compel them not to start a competing business that could take direct aim at your profits. For instance, if you've come up with a great new ice cream making process and you share that with your workers they can't turn around and use that same process in their own store if they've signed a non-compete agreement. Of course, if you want to sell them franchises go for it!

Work-for-hire agreement

This is an agreement you'll enter into with a freelance worker who will be lending some of their talents on certain elements of your product development. With a work-for-hire contract, you will own all the work that person creates on your behalf. If they design a killer logo for your brand, under this contract, that logo will be all yours.

Go provisional

Another layer of protecting your idea is by filing a provisional patent. This is something you can do yourself using resources found online. The provisional patent can throw a "protection net" over your idea for up to one year. With this type of patent, you can make the claim of "patent pending." In that year, you should be working out the kinks and lining up investors. Then you can pull the trigger on the patent. You might also find that your product has changed greatly in that year. Better to get it right than to rush into a patent.