New York City Startup Lawyers
Legal Tips and Information
Advantages of a Small Law Practice for Startups
When looking to hire business counsel for your New York startup, you may find yourself stuck deciding between a traditional corporate “big law” firm and a leaner small firm or solo practice arrangement. Every startup is different – yours may have unique legal needs, professional dynamics, budget limitations, time concerns, and relationship expectations. Generally speaking, however, many startups find that the small firm (or solo practice) arrangement is better suited to their needs.
On the UpCounsel platform, you’ll find hundreds of highly-qualified small firm and solo practice attorneys specialized in business and startup law.
Small law firms have a lot to offer, with several intrinsic advantages making them a solid alternative to “big law” for the budding startup.
Lower Legal Fees
Typically, the rates at a small law firm or solo firm are lower than those at a larger firm, thanks in part to lower overhead expenses (higher rent, payroll, and administrative costs, among other things). Small firms may pass these savings on to their clients – and position themselves more competitively on the legal marketplace – by offering favorable rates. If you have a specific rate in mind, you can use the UpCounsel platform to search for attorneys whose services align with your budget needs.
Larger firms are notoriously uncommunicative when responding to informal client inquiries and concerns. The “big law” administrative hierarchy may further frustrate your efforts to engage with your attorney(s) at the firm. By comparison, smaller business law firms and solo practices are often much more responsive to client needs as they have fewer clients, are more reliant on their startup clients, and generally have less intensive billable hours requirements.
It is perfectly reasonable to have questions and concerns throughout the legal relationship – if you value a highly responsive professional relationship with your attorney, a small firm lawyer may be the right choice.
A Network of Non-firm Attorneys
Once you begin working with an attorney and assess the legal strategy of your startup moving forward, you may begin to realize that your need for legal services is greater than you initially expected. For example, you may not only need document drafting services (i.e., business contracts and agreements), but you may need an employment attorney to address certain pain points as your startup grows.
A large firm that is initially brought on board to counsel your startup on one aspect of business may be pressured to upsell you on additional legal services they provide, even if those services are not strictly necessary at that phase in your startup’s growth. Small firms tend to be more specialized. If there’s a genuine legal issue that needs an immediate response, the firm may refer you to a third-party attorney who is able to handle your issue.
Finding a Skilled New York Startup Attorney
If you have decided to work with a small business law firm or solo practitioner through the UpCounsel platform, you’ll want to ensure that you select an attorney who is professionally compatible with your team – and is well-suited to serve your particular goals, needs, and limitations.
Startup budgets are typically tight, especially with regard to “accessory services” like legal assistance. Fortunately, the UpCounsel platform lets you filter and search for attorneys who offer services at fees that suit your particular budget limitations.
As you browse attorney listings, try not to make the mistake of assuming that lower legal fees are an indication of a subpar service offering. Lawyers offering a comparatively low rate may be doing so for any number of reasons: they may have recently moved into solo practice from “big law,” they may have recently retired from a long and successful business law career and provide part-time services at a discount, they may be positioning themselves aggressively to price out new competitors, or they may simply feel that such a rate is fair for the value given.
Reviews and Stats
Reputation is king when it comes to building a new professional relationship. You’ll want to assess whether a given attorney is skilled and trustworthy, and whether they have built successful attorney-client relationships in the past. On UpCounsel, clients may leave ratings and reviews for attorneys they work with through the platform. These reviews are an excellent predictor for what to expect when working with an attorney.
Bear in mind that new attorneys on the platform may not have many reviews yet. If you’re interested in learning more about their services, read their attorney profile and follow the relevant business links.
UpCounsel attorney profiles also include “repeat client” stats. An attorney with many repeat clients proves that clients not only had an excellent singular experience, but would like to continue the relationship into the future. This is particularly important when it comes to hiring legal counsel for a startup, as you may want to “scale up” your professional relationship as your business concerns scale, too.
Reach Out and Communicate
Don’t be afraid to reach out to attorneys even if you do not have a specific legal question. Many small firm lawyers and solo practitioners will be happy to take a little time to discuss their services, their background and experience, and their fees. By reaching out and having a conversation, you’ll be able to get a sense for how the attorney does business and whether they will be personally and professionally compatible with your team.
Typical Startup Legal Services
As startups grow, they require a wide variety legal services, from document drafting to compliance to intellectual property strategy. Some attorneys specialize in one or more categories commonly associated with startup law, while others handle a broader range of concerns.
Most startups will require extensive drafting services for different business concerns, including formation (incorporation, bylaws, operating agreement, and equity documentation), employment (employment agreements, confidentiality agreements, etc.), and contracts with third-party entities (i.e., a sale of goods contract).
In recent years, online services offering standardized, form legal documents have become popular. These services should be avoided by startups. Form documentation may not account for certain details that are necessary for actual enforcement of an agreement. To ensure that your agreement is customized to meet your particular needs, have an attorney draft your agreements. Your attorney will also be able to advise you on any legal issues as they arise.
Assessing Risk of Litigation
A skilled attorney can help structure your business to minimize the risk of future litigation, and – in the event that litigation is unavoidable – to minimize liability exposure. Litigation can be protracted, difficult, tense, and expensive, so it is best avoided.
Depending on your industry, the regulatory environment may be somewhat complicated. In some industries (i.e., agriculture, food production, energy, etc.), regulatory agencies at both the state and national level make frequent and significant amendments to existing law, affecting many thousands of businesses every year.
Working with a regulatory attorney familiar with your industry is a great way to ensure that you are in compliance with current regulation, as well as to secure your startup against potential regulatory risks down the road. A skilled attorney will be able to interpret current regulation and advise your team on the steps to take to comply, and will also keep you apprised of legal developments in the industry, giving our team time to prepare for changes coming down the regulatory pipeline.
Intellectual Property Law
For many startups, intellectual property (copyright, trademark, and patents) is fundamental to the value of the business. It is therefore crucial that you secure ownership of your intellectual property and guard against infringement.
An intellectual property lawyer will register your trademarks, copyright, and patents, when necessary. They may also handle infringement litigation. Always speak with an attorney before hiring them to learn more about the extent of their services.
If you’re searching for a New York startup lawyer who can counsel you on intellectual property matters, make sure that you find a qualified intellectual property lawyer. Though a business lawyer may have some experience with intellectual property, they may not be qualified to advise you from a strategic perspective.
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Legal Services Offered by Our On-Demand New York City Startup Attorneys
On UpCounsel, you can find and connect with top-rated New York startup attorneys & lawyers that provide a range of startup law services for startups and entrepreneurs that are starting a business. Any of the top-rated New York startup lawyers you connect with will be available to help with a variety of your startup law related legal needs on-demand or on an ongoing basis in the city of New York, NY.
From primarily dealing with things like business formation, contracts, leases, equity financing, securities, and intellectual property protection, the New York startup lawyers on UpCounsel can help you with a variety of specialized and general startup law related legal matters. No matter what type of startup law needs you have, you can easily hire an experienced New York startup lawyer on UpCounsel to help you today.
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What Are Co-sale Rights?
Co-sale rights, also known as tag-along or (less often) take-me-along rights, are the rights of minority shareholders to join in when the majority shareholder or the founders sell their stock. Therefore, if the company's original owner sells his or her stock to a corporation for $20 per share, every investor with a co-sale right can get the same deal.
Co-sale rights are usually paired with the right of first refusal, or ROFR. With an ROFR clause, a company or its shareholders can buy the majority shareholder's stock if he or she decides to sell to a third party. This lets the current investors keep control of the company in case they don't like the third-party investor.
For example, say a company called Unlimited Clo
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What is Liquidation Preference?
Liquidation preference determines the payout process or the distribution of stocks if the company pays dividends, enters into a merger, or liquidates the company. Liquidation preference means the company's investors or the preferred stockholders receive their investment back first in case the company liquidates.
Liquidation preference determines who gets first and how much when the company is liquidated, sold, or declares bankruptcy. Liquidation preference is associated with the preferred convertible stock. It explains how the proceeds are divided and shared.
For example, a holder of preferred stock has a liquidation preference equal to $30 million and the company is sold. Then the holder will get the first $30 million before the common stockholders receive any amounts.
When the company liquidates, liquidation pr
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Royalty Financing: What Is It?
Royalty financing is a type of investment where the business gets money based on future revenue. It's similar to an advance on a paycheck. The investors get their money back through royalties that are a percentage of the company's revenue.
The repayment terms and the total amount repaid are negotiated at the start of the loan. The company's income and revenue determine how long it takes to repay the loan, which in turn affects the final repayment amount. However, a cap will be placed on the repayment amount during the initial negotiations.
Royalty financing is usually used for companies with large revenue streams. Less profitable companies wouldn't be able to repay the loan plus pay their business expenses.
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What Is a Delaware Corporation?
A Delaware corporation is simply a company that is incorporated in the state of Delaware. Many companies choose to be incorporated in Delaware because there are a number of financial benefits to being incorporated there in comparison to other U.S. states.
Companies incorporated in Delaware are protected by the business laws of that state, which are known to protect and benefit corporations.
Prior to the early 1900s, if an individual wanted to form a corporation it had to be approved by the U.S. Congress. Delaware changed that. Delaware was one of the first states in the U.S. to allow an individual to follow a simple process to incorporate his or her business. And to this day, Delaware remains one of the incorporation capitals of the the U.S.
Why Is a Delaware Corporation Beneficial?
Delaware consistently ranks
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What is a Section 83(b) Election?
Section 83(b) Election tells the Internal Revenue Service (IRS) that you want to report income tax the year your stock was granted instead of when it is vested. This means you will report income at the current stock price when the stock is granted to you instead of the stock price the year the stock vests.
Entrepreneurs grant themselves stock in the companies they start, and often offer their employees and contractors some form of equity incentive (e.g., stock of corporations or membership units of LLCs) to entice them to come on board. If you’re considering granting stock to yourself as a founder or joining a company that’s offering to grant you stock in addition to or in lieu of a paycheck, you should understand the potential tax consequences before accepting.
The IRS views an equity grant as a form of taxable compensation, and if you’re the recipient o