I am just starting to engage with attorneys for my startup, and am wondering if working with a large, Silicon Valley firm adds credibility to the venture? Firms like Wilson Sonsini Goodrich Rosati, Fenwick & West, etc. - does anyone have experience working with these folks? BTW - yes, I am in the SF Bay Area.
I have heard anecdotally that the big law firms can help make connections to investors, lend credibility during the funding process, and generally be good for networking. However, they are significantly more expensive, so I'm interested to hear if anyone has had this experience.
Thanks for your thoughts.
I've worked with 3-4 of these firms in the past. My general impression was that they didn't provide significant help in the early stages and in making connections to investors, etc. Also, how much networking support you get out of them varies greatly from partner to partner.
Just so you know, it's really not that hard to make connections if you live and work in the Valley and attend any number of social events where people interested in the startup ecosystem congregate.
As far as the legal work -- in the early stages most of it is boilerplate. And the senior partner you meet with will, understandably, let a junior associate do most of the heavy lifting. If you have the know-how and motivation you can save yourself a lot of money by starting with something like Orrick's Startup Forms Library or let a small or solo firm set up your business structure.
The big-name law firms are much more useful in the later stages when negotiating complex deals or when you are about to sign a term-sheet with a VC. When it comes to intellectual property they will also refer the business to boutique IP law firms -- something you can do yourself.
Most of them, incidentally, consider giving a starving startup $10-$15K worth of legal fees -- most of which will get eaten up in setting up the corporation/partnership -- in return for a right to invest, if they like your idea and think it's worth the risk.
My suggestion is to do the basic boilerplate stuff yourself or with a small firm. You can always approach the big name ones when you have a specific need and can afford them.
My experience is that they will not lend credibility or help you in your quest for funding. On top of that, all VC's will bring their own big name law firm into the mix to represent themselves during the due diligence and contract stage of the funding (and hit you with the bill.)
I think a regional / mid-sized firm is the best solution, provided the partner has experience with the VC community - and being in SF that shouldn't be too hard to find.
BTW, I believe this works for CPA/Audit firms as well. Most regional firms are more than capable of providing an opinion on your books and structuring their workpapers in a way that a hand-off to a Big Four would be a relatively easy thing.
I don't think the size is nearly as important as selecting a firm that had done a lot of work with startups. When we started we used a large firm but it was a firm used to working with large companies. Because of their lack of experience with startups much of the organization of the company was sub-optimal.
Beyond the initial problems when we tried to setup stock options plans and other things startups do all the time they were not efficient at it because of their lack of experience doing this for very small firms.
The benefits of a Wilson Sonsini is that they are experts at the legal issues that startups have and will have lower associates handles them efficiently and they won't do any learning on your nickel.
If you expect your business to stay simple then a small firm that specializes in startups can have all the benefits with lower cost. If you plan to grow into doing complex licensing deals, acquisitions, international work or other types of transactions then one of these large firms will pay for itself many times over.