Nivi · June 16th, 2011
Go read Elad Gil’s You Should Read Every Word of Every Legal Doc.
Some docs are too long and boilerplate to read, so this is how I read financing docs:
- Read and understand everything in the term sheet. But when it comes to the closing docs, ask your lawyer to explain all the terms that he has seen written, or could have been written, more favorably to the startup. The closing docs are too long and boilerplate to read.
- Get a good lawyer because you probably don’t have one. You really won’t know what a good lawyer is until you’ve fired a few. I regularly run into lawyers at big firms who give bad advice alongside good advice. Don’t assume your lawyer is good just because he works at a big Silicon Valley law firm.
- You probably can’t tell the difference between good legal advice and bad legal advice. So you will need a great advisor like Elad.
You should subscribe to Elad’s blog. It is consistently great.
Topics Lawyers
I tell clients similar things all the time. And in reading Elad’s notes I found myself thinking he was parroting what I say: Get an attorney when it’s time, which is at the end. and then, watch him as though he was the person you were signing the contract with.
Yes yes YES. Especially to #2. I never fully appreciated just how uneven the quality is among people at large, expensive law firms until I had the chance to oversee a dozen of them as General Counsel. The mantra among GCs and other in-house lawyers is “hire the lawyer, not the firm.”
For startup CEOs evaluating when to hire their first in-house GC, a major factor to consider is that he or she will have a much better basis to judge outside counsel (and their bills), including advising you on who to fire.