Does my new business need a startup lawyer?

If you're starting a new business from scratch, a startup lawyer can be an incredible asset. They can provide sound legal advice that will set your business up for success in the future. In addition, professional guidance and business law education will help you make wise decisions that protect you and your startup business.
What does a startup lawyer do?
A Canadian startup lawyer practices business law and can guide you through the legal issues and regulations related to operating your business - specifically focusing on things that apply to brand new businesses. The best lawyers for startups will have experience working with new businesses and are well-versed in the laws that most commonly apply to startups. Startup lawyers can also represent you if you ever find your business in a legal dispute.
How can a startup lawyer help me?
Once a startup lawyer educates you on business law, you’ll better understand what is required of your business legally, and how to avoid potential problems that could arise in the future. Seeking counsel from a startup lawyer when you first start your business will help you avoid complex and time-consuming issues and guide you to make good decisions.
Incorporation
There are many benefits to incorporating your startup, and it's a business structure that works well for many founding companies. Incorporating your business can provide greater access to grants, loans, and funding and lower tax rates. Incorporating also allows startup businesses to scale and grow by attracting investors and hiring employees.
Incorporating is standard practice, but it's not the only option available for your startup. A startup lawyer can share the pros and cons of incorporating. They can also provide information about other business structures, including co-ops, non-profits, and sole proprietorships.
Reviewing contracts
Any contracts you enter should be reviewed by a startup lawyer. Canadian businesses can have contracts with different parties, including contractors, vendors, clients, employees, and business founders. In addition, a lawyer can review lease agreements, employee contracts, warranties, waivers, acquisition and merger agreements, shareholder agreements, and other legal documents.
It is worth the startup lawyer costs to have a professional look over your contracts. They'll ensure that they are free of any loopholes and admissible in court. Startup founders will also get a better idea of what to look for when writing or signing a contract in the future.
Shareholder agreements
If your business has multiple founders, or you plan on growing by selling shares, you'll need a shareholder agreement. This legal agreement describes how your business will be operated, outlining shareholders' rights, obligations, privileges, and protections. It will also include information on how owners manage the company, how outside parties can become shareholders, and share pricing.
Developing a shareholder agreement can feel like a complicated and overwhelming task when you're just starting. However, good startup lawyers can help you build this agreement, ensuring it offers fairness and protection for all shareholders, including minority holders.
Founders agreements
Founders' agreements can be shareholder agreements, as well as cooperative policies and partnership agreements. Founders' agreements can drastically reduce the risk of a disagreement and damages caused by a future conflict. Startup law firms can help create or review your founders' agreement to ensure they're compliant, fair, and offer protection for all parties.
Stock Option Plans
If you have employees, you might allow them to purchase company shares. A stock option plan will enable them to do this and own some of the company's equity at a set price. The benefit of a stock option plan is that your employees can profit as your startup increases in value. In addition, having stock option benefits can improve employee retention and loyalty. Startup businesses require several legal documents, including a Stock Option Agreement for employees, Stock Option Certificates and a Director's Resolution that approves the plan. These documents are things your lawyer can help provide you with.
Mergers and acquisitions
In time, you might want to negotiate the sale of your company or acquire another business and its assets. To do this properly, you'll need a qualified startup lawyer. They can guide you through the process to ensure agreements are legally compliant and that they align with your company's objectives with regards to drafting, negotiating, and executing all contracts related to the merger.
Privacy policies
If your startup collects personal information from visitors of a website or app, you require a Privacy Policy under Canadian and international privacy law. This policy informs users about your privacy practices. Often, your website or app collects information, whether you know it or not! That is why having a startup lawyer advising you is essential.
A professionally-drafted privacy policy will ensure your business complies with all relevant privacy laws. It will explain how information is collected, what you'll do with it, and how your company will protect it. Privacy policies will also provide information about who might have access to the data.
Resolving claims
Unfortunately, legal problems and disputes can arise for any business owner. If someone makes a legal claim against your business, your startup lawyer will provide education on applicable laws and represent you in the case. For example, if an employee sues your business on discrimination or workplace safety claims, you'll need an attorney.
Fortunately, correspondence with a startup lawyer will help you avoid legal problems before they arise. For instance, a startup lawyer can help you understand anti-discrimination laws before going through the hiring process for new employees. Then, you'll have a better idea of what you can and cannot ask to be compliant with those laws in a job interview. Startup businesses who invest time in learning a little bit of business law and what's required will save money on legal services down the road.
The best lawyers for startups can keep tabs on your business and alert you to any potential problems early. In addition, having an experienced attorney on your team ensures your startup stays compliant and prepared for the future.
How much are startup lawyer fees?
You're probably wondering how much a startup lawyer is going to cost you. The general perception is that startup business lawyers charge high fees - sometimes higher than a startup founder can afford. Many budding business owners don't have a lot of capital so high lawyer fees can make their services feel out of reach.
However, instead of taking a reactionary approach to hiring a startup lawyer, businesses can save money in the long-term by hiring one now. Don't wait until there is a serious legal issue. A startup law firm will typically use a flat-rate, hourly-rate or contingency fee structure. Depending on the firm, they might charge extra for consultations.
Flat fees for startup lawyer
Canadian law firms often charge a flat fee for common legal services. For example, they might have a set fee for reviewing employee contracts or creating a privacy policy document. In most cases, providing these services or documents is something they've done hundreds of times. Therefore, they can offer a predictable price.
Hourly fees
Some business law firms want the assurance that they are not doing any work for free. For example, the legal service they provide might seem simple enough, but if you ask many questions, expect more correspondence, make unexpected changes, etc., they want to make sure you pay for it.
An hourly fee structure can feel intimidating for small business owners. But, if you have a quick question, is it going to cost you $500 to make a short phone call? Is your lawyer taking their time so they can charge you more? If a startup law firm charges an hourly fee, ask for an estimate on how many hours that job typically takes.
Contingency fees
You might be charged continency fees, or a hybrid of contingency and hourly fees, with a business lawyer. Startup companies pay a percentage of the amount potentially owed for a legal service. However, since most startups hire a lawyer early to avoid future legal issues, contingency fees are less relevant.
Cost of working with Goodlawyer
With Goodlawyer, you won't have to worry about high startup lower fees or getting a massive bill by making a simple phone call. All your legal fees are straightforward, quoted upfront, and surprisingly affordable. Goodlawyer makes hiring a startup lawyer easy and stress-free.
Fixed-Fees
Goodlawyer charges a fixed fee for standard legal services a startup might require. For example, they can help create legally compliant advisor agreements, shareholder agreements, privacy policies and more at an affordable, fixed rate. If you need help creating a stock option plan, or even with incorporation, there's a fixed fee for those services too. You pay what you are quoted when the job is complete. Upfront, fixed legal fees make budgeting straightforward and professional legal services more accessible.
Micro Services
Goodlawyer also offers various Micro Services for quick legal services you might need on the fly. You can have your contracts reviewed by a professional startup lawyer for just $25 per page. Or, if you have a quick legal question, you can book a legal Advice Session and get your answers from a qualified startup lawyer for just $39 per 15-minutes. This makes obtaining important legal advice you need affordable and simple.
Custom Fees
Unfortunately, not every instance is as straightforward as those common legal services. Sometimes you'll need a startup lawyer to help you through a complicated legal problem. In that case, you can share your situation and receive a custom quote from Goodlawyer with no obligation to hire. Your quoted fee will be clear and detailed and will never come with unexpected or additional costs when it comes time to pay the bill.
Plus, if you're not satisfied with the legal advice you receive from your lawyer, startup businesses can request a refund and get their money back.