Act I: The awesome leverage of a Fractional General Counsel

The idea that “because startups don’t have a lot of legal needs, they don’t need a GC” is backwards.

Seed and Serie A founders are navigating, without inhouse counsel, a tension between sending everything to an expensive firm vs. executing on important early decisions on IP, finance & equity, internally on their own.

Do the GC, just do it fractional, or part time. They will (1) enable your team to appropriately self-service, (2) fulfill 80% of your remaining needs themselves, and, (3) identify special matters, using their industry experience and connections to source and/or manage the perfect solution for everything else.

Makes sense, right? Still you might ask — how’s that different than working with BigLaw? Three answers:

1. Subject matter expertise geared towards generalized legal and business acumen: The GC trades knowledge of legal edge cases for expertise in everyday advising, contracts, corporate governance, legal process strategy & implementation, and upside realization. Those focuses are directed to minimize your time, mindshare, and costs, while maximizing your revenue opportunities.
2. Unbundling means lower costs. BigLaw forces you to bundle the deep experience & value of their partners with the mark-ups and relatively low experience of fresh-out-of-law-school junior associates and support staff, overhead, and more. This makes them invaluable for tough questions and tablestakes matters, but less value-effective for day to day stuff.
3. Fixed pricing is more predictable and avoids incentive perversion. The billable hour makes sense for bespoke work, but if you’re lucky, your GC will offer fixed costs, which are better for (a) standard tasks, and (b) incentive alignment in issue spotting, project scoping, and third party vendor selection / management. Otherwise, you’re travelling with a tour guide who’s getting a kickback on every experience he takes you to.

Tl;dr early stage startups need a Fractional GCs more than anyone, enabling Lean Legal practices with a more relevant skill set, a smaller scale of cost, and a better cost structure.

Catch Part 2, how to shop for and measure your GC, and part 3, the very special Lean Legal for Startups Playbook, by signing up for updates on our website at www.legalandops.com.