How startups can avoid wasting money on lawyers?

Startups need solid legal counsel to succeed. A good startup lawyer can add so much value to a startup and help accelerate growth while managing risk.

However, it’s easy for legal fees to run out of control. There is an actual skill involved in managing counsel. These tips below will help you get the most out of your counsel without wasting money. It could potentially save you hundreds of thousands of dollars, so pay attention.

Of course if you’re looking for counsel, feel free to reach out to us. We have killed the billable hour at our law firm and only charge transparent flat fees.

Build a Strong Legal Foundation from the Beginning

All aspects of legal compliance for your startup will be built on your incorporation and post-incorporation work. When launching a startup, legal considerations are often overlooked. However, without a solid legal foundation, you expose yourself to significant risks and may incur higher costs later on to rectify any legal issues. Therefore, it is essential to prioritize legal matters from the outset to establish a strong foundation for your startup.

  • Engage a Specialized Startup Lawyer Early On. While your uncle may be a great commercial litigator, he may not be the best fit for a startup. By hiring a specialized startup lawyer in the early stages, you can navigate legal complexities and avoid costly mistakes. Experienced lawyers are typically quicker and have a clear understanding of common practices and procedures. Though this may be an investment up-front, it will pay off in the long run. For more information on finding the right attorney, click here.
  • Consider Using Reputable Platforms for DIY Incorporation. If you choose to incorporate on your own, consider using reputable platforms such as AngelList or Clerky. These services offer quality standard documents that can help streamline the incorporation process while ensuring legal compliance.

Maintain Corporate Records

Maintaining organized corporate records is essential for startups, as it promotes transparency and ensures legal compliance. It will also save your legal counsel a lot of time if you can provide them with well-organized documents. You’d be shocked at how much time lawyers spend sifting through random folders on a Google Drive link from a startup.

Keeping your startup’s legal documents organized is essential for keeping your legal costs down, ensuring compliance, mitigating risks and positioning your company for growth. By developing good document management practices early on, you can save yourself time, effort and potential headaches down the road. Whether you choose to keep physical copies in a binder or store everything on a shared drive, make sure your documents are easily accessible and up-to-date. By doing so, you’ll be better prepared for potential due diligence, regulatory compliance requests and dispute resolution. To learn more about organizing your corporate records, click here.

Do Your Homework

While relying on legal professionals is essential, startups can contribute to cost savings by being proactive and well-informed. To achieve this, follow these key steps:

  • Research to Understand the Basics. Take the time to familiarize yourself with fundamental legal concepts that are relevant to your question. Understanding the basics will enable more productive discussions with your legal counsel and help you make informed decisions. The goal of your research should be to gain a provisional understanding of the basic concepts so that you can ask how those principles apply to your specific situation.
  • Remember You Hired an Attorney for a Reason. While conducting online research is beneficial, it is important to remember that your lawyer has hands-on experience. Avoid downplaying (challenging) your legal counsel based on Internet searches. Instead, use your research to facilitate meaningful conversations and ask pertinent questions.
  • Make Clear Requests. When seeking legal advice or engaging in discussions with your lawyer, clearly communicate your goals, concerns and expectations based on your initial research. By providing comprehensive and concise information, you enable your legal counsel to provide targeted and efficient guidance.

Use Solid Contract Templates and Playbooks

Having robust contract templates and playbooks in place can significantly reduce legal costs by streamlining routine legal processes.

  • Avoid Using Random Templates from the Internet. Steer clear of using generic contract templates downloaded from the internet. These templates may lack the necessary provisions or fail to align with your specific business requirements. Instead, work with your legal counsel to develop customized contract templates tailored to your startup’s needs.
  • Collaborate with Counsel to Draft Reusable Templates and Playbooks: Invest time upfront to work with your legal counsel in creating contract templates that can be reused across similar transactions or situations. Make sure they understand the nuance of your specific business. When you’re building a template, it’s appropriate to be nitpicky to get the exact agreement you want. Since this final template will be used dozens or hundreds of times, it’s worth getting it right. In addition to the template, set up a contract playbook that specifies the preferred and acceptable positions on each term of the contact. This upfront investment will pay off in the long run by reducing the time and effort required for drafting contracts from scratch for each new deal.

Flat (or Capped) Fees

Unexpected legal bills can be a major burden for founders. You may expect a $2,000 bill but receive one for $20,000 instead. Without accurate pricing information, it’s impossible to make informed decisions regarding legal counsel. To avoid unpredictable and potentially excessive legal bills, consider implementing flat or capped fees.

For most startup legal work, an experienced startup firm should be able to offer flat fees. Avoid the billable hour whenever possible, as it often results in misaligned incentives between the attorney and founder, leading to slow progress and unexpectedly high bills. At Westaway, all services are offered at transparent flat fees.

If a flat fee is not available, insist on an upper cap. However, note that introducing a capped fee into the engagement will often lead the firm to do everything they can to reach that cap. Nonetheless, this is still preferable to being hit with a surprise bill.

Blended Legal

Striking a balance between startup-focused legal firms and specialized legal advice from larger firms can help optimize legal expenses.

  • Utilize a Startup Law Firm for Day-to-Day Legal Matters. Engage a startup law firm that offers reasonable or flat rates for managing your startup’s day-to-day legal needs. These firms often have the necessary expertise in startup-related matters and can provide cost-effective solutions. For instance, General Counsel at Westaway is designed to handle all your day-to-day legal needs for a flat, monthly fee.
  • Use Big Law Sparingly for Specialist Advice. Leverage larger law firms with higher billable hours on an as-needed basis for specialized advice or complex legal matters that require their expertise. Engaging big law firms for every legal issue can be costly. By using them selectively, you can access their specialized knowledge while controlling expenses.


In conclusion, startups need solid legal counsel to succeed, but it’s important to manage legal fees effectively. By building a strong legal foundation from the beginning, maintaining organized corporate records, doing your homework, using solid contract templates and playbooks, implementing flat (or capped) fees, and using blended legal services, startups can save money on legal fees while still receiving high-quality legal services. Additionally, seeking legal advice early, understanding the legal implications of different business structures, protecting intellectual property, and navigating international laws and regulations for global expansion are all important considerations for startups. By taking a proactive approach to legal matters, startups can minimize legal risks, comply with all applicable laws and regulations, and position themselves for long-term success.

10 Rookie Startup Legal Mistakes

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