Attorneys have bad reputations for all sorts of reasons, especially in the business world. But, companies large and small usually end up needing legal counsel at some point throughout their companies’ lifecycle. Here are some of the more prevalent myths about law firms that startups in particular should ignore:
They will always keep data confidential.
Although attorneys owe their clients a duty of confidentiality, they may leak client information inadvertently. Obviously, this may occur by accident during conversations with others. However, it is more likely for this to happen due to simple carelessness or lack of oversight when it comes to handling important documents. After all, not all law firms have a solid document management strategy in place, especially smaller operations.
And, as is the case with businesses in most other sectors, attorneys often utilize multiple devices to access and review work-related documents. This type of document sharing and viewing software may not have the right security measures built in, potentially exposing client data. Thus, for startups with valuable intellectual property or any other sensitive information, it is important to ask a law firm about its data security measures before retaining its services.
Related Article: Why a CFO's Biggest Cybersecurity Liabilty May Be Their Law Firm
They have all the answers.
There is a common misconception that attorneys know just about everything about just about everything. It is an understandably persistent myth considering that they go to school for a long time, they read a lot, and they tend to speak persuasively. But, good lawyers know what they know, and perhaps more importantly, know what they don't know and aren't afraid to admit that. Startups have a tendency to turn to counsel for basically any issue that arises, but it's important to recognize when additional help or expertise is needed.
They all cost a fortune.
Pricing is all about supply and demand, and that isn't any different for professional services. Granted, attorneys that work in highly specialized fields may be able to get away with charging a bit more. However, for most straightforward business matters, there is bound to be a firm out there that startups of any size and budget can afford. And, with the surge of startups, plenty of firms are moving away from traditional hourly rates and are willing to establish a pricing model that makes more sense for the nature and amount of work needed. It just takes a little time and research to find the right fit.
Related Article: Law Firms and Data Security
They understand your venture.
This goes along with that notion that lawyers know everything, but it is more specific to business. A surprising number of corporate attorneys don't actually know that much about general business subjects, such as accounting and marketing. Fortunately, this is changing, as firms have realized how costly and dangerous this disconnect can be for both firms and clients. Thus, many are introducing courses and training relating to business and entrepreneurship. However, rather than assume that attorneys already have the requisite knowledge, startups must inquire about a firm's background in these areas during the vetting process to ensure they pay for sound advice.
They only think about avoiding litigation.
Most startups are hesitant to retain counsel because of the cost, but quite a few simply believe that they don't need legal advice. After all, there is tons of information online, including sample documents like licensing contracts and LLC agreements. The problem with relying on random information that is found online is probably fairly obvious.
In addition, many business leaders have been led to believe that attorneys will primarily focus on helping the company avoid litigation. As a result, early stage startups tend to think that they don’t need legal counsel in the beginning. Unfortunately, failing to set things up properly from the outset could end up causing problems down the line, including litigation, so it is best to get good advice as early as possible.