Incorporation
Working with lawyers
When you’re building a company for the first time, there’s constant pressure to do things “right.” So it makes sense that many first-time founders bring in lawyers early, just to be safe.
But sometimes, when you’re trying to cover all your bases, you end up treating every legal question like a high-stakes decision. And that’s where things can get expensive, fast.
In this guide, we’ll walk you through when you should bring in a lawyer, what it’s like to work with one, where things can go sideways, and how to avoid the mistakes that catch a lot of first-time founders off guard.
Boutique firms are often more startup-friendly and cost-effective than large firms.
Or if you’re raising a priced round, the lead investor might suggest a law firm they’ve worked with before.
These referrals are often solid, but could lock you into a relationship where you’re not totally clear on the costs upfront.
Other areas that generally aren’t worth your time early on include , changing your legal name, and trademarks. For details and edge cases, see our Incorporation guide.
Use lawyers selectively: hire only for priced rounds, lawsuits, and complex enterprise deals.
When you should hire a lawyer
There are a few key circumstances when legal help can save you time, protect you from risk, and help you navigate complexity you probably haven’t seen before.Raising a priced round
When you’re raising a priced round from investors, the details get a lot more complicated than a SAFE. A good lawyer will walk you through ownership terms, help you negotiate with the other side’s legal team, and handle the legal paperwork. This is one of the clearest moments where legal support pays off.Dealing with a lawsuit
This one is obvious, but still worth highlighting. If you’re facing legal action, don’t try to handle it yourself. Even if it feels minor, it’s smart to bring in a lawyer early to protect your time, your company, and your sanity.Enterprise contracts and licensing deals
If you’re closing a large enterprise customer, especially one with unique demands on how they’ll pay for or use your product, you’re entering territory where legal expertise matters. These contracts often include terms around liability, data, and usage rights. A lawyer can help you understand the risks and draft language that protects your business.Post–Series A legal situations
As your company grows, you’ll face more edge cases like employee termination settlements, more complicated commercial deals, and doing business in a new location. At that point, having legal support that you trust becomes part of the cost of running a real business. Eventually, you’ll even bring it in-house by hiring general counsel.Working with a lawyer for the first time
Unfortunately, working with a law firm can be surprisingly opaque. It’s not always clear where to find a lawyer, how billing works, or what you’re actually paying for. Here’s what to expect:They’re usually referred to you
Most founders don’t shop around for lawyers. You’ll typically get a referral from someone you trust, like an investor, another founder, or an accelerator like YC. Here’s a list of reputable law firms that past YC founders have worked with and found helpful. Note that not all of the firms offer the YC special deal.Major law firms
Major law firms
Boutique law firms
Boutique law firms
Boutique firms are often more startup-friendly and cost-effective than large firms.
You’ll likely start with a retainer
Most firms won’t do one-off work. Instead, they’ll ask you to pay a retainer, a lump sum up front (often $10K or more) that gets applied to future work. The idea is that they’re committing to a longer-term relationship. They’ll build context on your business, track your legal history, and be ready to jump in when you need them. That continuity is invaluable, but it also means you’re on the hook financially, regardless of how much you use them right away.You’ll get billed by everyone
For example, here’s what happened at Finta: We worked with lawyers on a trademark issue that lasted maybe a month. Nothing urgent, just a few emails here and there. But months later, the invoice landed, and the fees were shocking. Everyone who even skimmed the email thread billed for their time. If someone spent 6 minutes thinking about us, we got billed for it.- A junior associate visiting your website to research your company? $166 per 15 minutes.
- A partner cc’ed just to stay in the loop, even if they never respond? $325 per 15 minutes.
- A quick email confirmation like “Yup, that’s correct”? Still billed as a 15-minute minimum.
Billing accrues until you get a big bill
You might go weeks or months without seeing an invoice for any of the work done after paying the retainer. Then, usually after your funding round closes or your legal situation wraps up, you’ll get an email from the billing department, and it’ll be a lot more than you expect. In the example screenshot, Finta received this invoice after 3 months of work on a handful of small issues. That final total even includes $10K off for the YC special deal!Misaligned incentives
Here’s another example. Finta’s legal name isFinta Platform Inc., but we wanted to operate under the simpler name “Finta.” We’d heard about and weren’t sure if we needed one. A quick online search gave mixed answers, and founder friends we asked hadn’t filed for one either. Wanting to be responsible, we reached out to our lawyers to check. They responded with a detailed breakdown showing the work they’d done to check.
- Research on state requirements
- Links to where we could file
- A few forms
- A proposed next step
When you don’t need a lawyer
Here are common startup legal tasks and the affordable tools that handle them as well as a lawyer would:| Task | Tools |
|---|---|
| Incorporation | Stripe Atlas, Clerky |
| Fundraising with SAFEs | YC SAFEs, Mercury, Clerky, Carta, Pulley |
| Fundraising with RUVs | AngelList |
| Foreign qualification | Clerky |
| NDAs | Clerky, Common Paper |
| Officer or company name changes | Clerky |
| Authorized share increases | Clerky |
| Hiring | Clerky, Common Paper |
| Commercial agreements | Common Paper |
Default to self‑serve early: Clerky, YC SAFEs, and Common Paper cover most routine needs.
If you’re unsure you need a lawyer
Talk to another founder who’s been through it. Most will happily share what they did, what they’d do differently, and whether a lawyer was actually worth the cost. If you can’t get a second opinion, make the best call with what you know. While you might not get it right every time, the goal is to learn the lesson quickly and cost-effectively. Now, when you do need to work with a lawyer, you can go into it with your eyes open.How to work with lawyers when you need to
Hiring good legal help doesn’t mean handing over the wheel. Founders who stay proactive, organized, and intentional get better results and lower bills.Treat your lawyer like a vendor
Lawyers are there to support your business, not run it. Stay in control, ask questions, and don’t assume every recommendation is the only path forward.Set clear fee expectations
Before any work begins, ask for a cost estimate or fee cap, and request alerts as you approach that limit. Make sure your invoice breaks out charges by task and person, so you can see where your money is going, catch any mistakes, and track spending across projects. The more visibility you have, the more control you keep.Control costs: set scope and a fee cap, ask for spend alerts, and require itemized invoices by task and person.