Price vs. long-term potential: how to pick counsel for incorporation?


For those of us who have incorporated a start-up and for those of us who are in the process:

(1) did you hire counsel to handle the initial paperwork (i.e., for the initial founders' stock issuance, initial hires, etc.)?
(2) if you got counsel, did you choose the firm on price alone or due to potential for long-term service?

I am a lawyer and am just curious how much interest there would be in a firm offering a very low fixed fee just for handling basic incorporation documents below, which would be enough to get a company up and running, if the firm did nothing but that:
* Basic employment agreements
* NDAs
* Bylaws
* Certificate of incorporation
* Operating agreement
* Founder's stock purchase agreements
* Checklist of other filings that the start-up would need to make (e.g., to pay sales taxes and get licenses)

The start-up could then use a different higher-priced firm for future work, such as stock offerings to outside investors and expansions.


Incorporation Legal

asked Apr 7 '11 at 22:15
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1 Answer


There are many legal document service companies that provide low fixed fee incorporation set up and contract services on the web. Two of the largest are LegalZoom and MyCorporation. You'll have difficulty competing with these established companies in a broad, scalable sense, but you do have the advantage of providing added-value services within your specific locale - perhaps with more in-depth knowledge of your state's corporate laws. If you do want to scale, then you'll need to think of ways to differentiate your service from that of the big players (which do refer their clients to attorneys as an added-value service btw). I've seen some lawyers drum up business by posting useful information on

The user demographic for the startup market is split into two camps: The first needs a quick, cheap, and simple incorporation service to get started (many of these go to Legalzoom et al); the second is a funded startup looking for reliable ongoing legal advice - a lot of these startups seek legal counsel they can interact with in person - usually through a friend's referral - so geography and networking can play a significant role in business volume.

answered Apr 7 '11 at 23:14
Henry The Hengineer
4,316 points
  • Thanks. I took a look at LegalZoom and MyCorporation. Not knocking them, but I don't think that one would usually get first-rate documents specific to a start-up from them, such as employment agreements, stock purchase agreements, NDAs and more. I'd look to provide good-quality documents that a start-up could use and in which investors would have confidence- not just "fill in the blanks" documents you pay $99 for. I was thinking $2,000 for a full slate of documents- a good law firm could easily charge $5-$10k. – User6492 13 years ago

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