The relationship between lawyers and startups has traditionally been complex, with legal services often misaligned with the needs and resources of early-stage companies. Tom Bohills, founder of Founders Law and former White & Case lawyer, shares insights on the specialised skills needed to effectively serve the startup community.
Rethinking the Business Model
“It’s very difficult,” Bohills admits when discussing the challenge of building a sustainable legal practice focused on startups. His firm operates on 15-20% margins rather than the 40-50% typically sought by traditional firms. This lean approach requires innovative thinking about both service delivery and firm structure.
“We compensate our lawyers well, but we’re not chasing the silver circle firms in terms of comp,” Bohills explains. Instead, they offer flexibility, remote work options, and a more entrepreneurial culture. The firm maintains efficiency through extensive use of technology and a lean back-office team.
The Startup Mindset
Working with startups requires a fundamentally different approach from serving corporate clients. “Corporate clients generally will have dealt with lawyers before. They know what they’re about, they know exactly what they expect, and more importantly, they know how to instruct them,” Bohills notes. In contrast, startup founders often have no prior experience with legal services and are deeply emotionally invested in their ventures.
“This is not a job for them. This is their baby. This is their life’s work,” Bohills emphasises. “You’ve got to care as well. I know it sounds a bit trite, but I think it’s true.”
Beyond Traditional Legal Services
The role of a startup lawyer extends far beyond traditional legal advice. Bohills describes being asked about everything from contracts and fundraising to HR systems and even personal matters. “Do you like the product? What do you think of my co-founder?” These questions require lawyers to develop broader business acumen and emotional intelligence.
Regional Differences Matter
The approach to startups varies significantly by region. Bohills observes that U.S. founders tend to be more aspirational, always aiming for billion-dollar exits or IPOs, while European founders often focus on building sustainable businesses. The UK presents a unique hybrid, combining U.S.-style entrepreneurial spirit with earlier exit strategies.
Key Skills for Startup Lawyers
- Flexible Fee Structures Startups require creative payment solutions, from equity splits to deferred payments and “bulk buy” hours that can be used over time.
- Clear Communication “You’ve got to condense concepts down into bite-sized chunks that someone who’s never had legal advice before can understand,” Bohills advises.
- Risk Management “Play in the grey,” as Bohills puts it. Perfect compliance isn’t always possible for startups, so lawyers must help prioritise and manage risks pragmatically.
- Solution-Oriented Approach “You can never say no to a client,” Bohills insists. Instead, provide alternative solutions that achieve the client’s objectives while managing legal risks.
Building Trust and Managing Relationships
When dealing with payment challenges or financial difficulties, communication is crucial. “Don’t ignore us and hide from our calls,” Bohills advises founders. This transparency allows for better planning and relationship maintenance during difficult periods.
The Ecosystem Role
Startup lawyers often become key players in the broader entrepreneurial ecosystem. While they can’t formally broker deals, they frequently facilitate introductions to investors, other service providers, and potential partners. “Lawyers are some of the best connected people out there,” Bohills notes.
Looking Ahead
As the startup ecosystem continues to evolve, particularly in regions like Dubai where Founders Law recently expanded, the need for specialised legal services grows. Success in this space requires more than legal expertise – it demands an understanding of startup culture, business dynamics, and the ability to grow alongside clients.
“It’s a state of mind,” Bohills concludes. “You’ve got to plug into the mind of being a founder and understand that they live and breathe risk every day.” This empathetic approach, combined with practical legal skills and business acumen, forms the foundation for successful startup-focused legal practice.
