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by tluyben2
3654 days ago
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> Not that very many startups need any in house lawyers! This is not meant as a flaming comment as I do not know enough about it but in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs. I have been through a bunch of legal cases in the Netherlands and here no party wins usually in business cases. Even if you win you do not really win money so most cases just settle for a few bucks or win for the same few bucks at more legal cost. You get nominal expense back if you win aka if you pay E300 per hr for your lawyer then if could be you get E70/hr back. I do not know the exact numbers but it's basically mostly a loss for all which is why it happens very little and no one is really afraid of it. |
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> [...] in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs.
Don't worry, it's not as bad as it looks. I do see a lot of lawyers running up the bills at the expense of inexperienced entrepreneurs. That really ticks me off.
In the first few years of a startup my legal bills are typically under $15K/year -- well under. Setting up the company doesn't cost much, and apart from some minor routine stuff (the odd employee termination mainly, plus a few contracts and the like) there just isn't much legal stuff to do. An A or B round financing shouldn't cost more than $20K even in the valley. In fact legal bills can be lower in the valley because the firms are used to doing the kinds of thing you need.
Patent stuff is more expensive but again, most companies have no need to bring that in house. If you hire some overseas people you'll need some legal help but you wouldn't bring that in house.
Some businesses do have an explicit legal needs (e.g. Uber) if they are going after a regulated industry. But, for example, one of my startups developed a drug and got it into clinical trials -- even though it's a highly regulated field there was no need for in house counsel, and actually the legal part of that was not huge.
If you get sued you'll hire an outside firm that specializes in litigation.