Most Silicon Valley firms are open to the idea of deferring fees. With a deferred fee, you’re essentially putting off your bill until a later date or when you raise your first round of capital. Some firms ask for equity in exchange for the deferral. All companies thinking of going this route should be weary of the hourly rate for the services. You might be jumping for joy because you don’t have to pay your legal bill for another year but the price of the hourly rate might increase substantially since you’re putting off payment until a later date. If your fees are deferred make sure you thoroughly understand the consequences of deferring the fees and not being able to pay for it at the later date (knock on wood). If you’re giving away equity to your lawyer, make sure it’s someone that you see yourself working with in the long term for more complex projects.
Fortunately, startups have other options now. One alternative is. Our legal platform is transforming the legal experience for startups by cutting the overhead that makes Big law expensive, while maintaining that same quality. Stop by today and we’ll set you up with a free consultation with an experienced business attorney. Good luck!