Domain name? Check! Office space? Check! All legal documentation in place?? Um… check?
Entrepreneurs often leave themselves vulnerable over simple matters that could be avoided by working with a lawyer early on. To learn more about how entrepreneurs can get ahead of these problems, we consulted Basha Rubin, Co-Founder & CEO of Priori, a legal services marketplace. Priori’s technology-enabled marketplace connects businesses with a network of vetted attorneys. We asked Rubin, having worked with thousands of companies, about four of the most common legal mistakes they’ve seen entrepreneurs make.
- Not protecting intellectual property. Before you choose a name for your business, draft a logo or build a website, you may want to hire a lawyer to do a trademark analysis to discover whether anyone else might have a claim to your name or logo, or help you decide if filing for a trademark may be necessary. “We see this all the time,” Rubin says. “Entrepreneurs start their businesses without thinking about a trademark, only to discover down the road that they need to change their company’s name! It’s much less harmful to your brand to pick a new name at the outset than to have to change it once you already have clients and a reputation.”
- Not clearly documenting governance and ownership with your co-founders. “We see a lot of entrepreneurs who start their company as a project with a friend or family member and fail to formalize the business and/or relationship,” Rubin says. “Unfortunately, that can make things more complicated down the line if a dispute arises between the founders.” Work out the details before you start the company and ensure an attorney accurately memorializes them.
4. Editing agreements without a lawyer’s assistance. When a client wants to change one small provision in a contract, it might seem easy to change it yourself. “Because entrepreneurs don’t want to incur more legal fees, they will often edit documents themselves,” Rubin says. “Often, they will make a change that has more profound consequences than they anticipate.” Have an attorney carefully walk you through the contracts they draft for you, and create fall-back positions for provisions they or you anticipate might be commonly negotiated.
Instant Elevation Moment: When in doubt, write it out. From ownership agreements to service contracts, get all parts of your business formalized in writing—and have a lawyer review all documents to cover you legally.