Free legal documents for entrepreneurs

August 3, 2009 | Chris Morris | Comments | |

Navigating the legal waters as you launch a business can be a perilous journey. Good attorneys are expensive and the temptation to cut corners and jump into product development is often a strong one.blind_justice.jpg

Of course, giving in to that temptation can cost you dearly down the road, as initial team members move on and VCs come calling. Orrick, Herrington & Sutcliffe, a law firm specializing in start-ups, has put together an online ‘tool kit’ for entrepreneurs that includes a wide variety of legal documents, a library to assist founders with the terms and terminology found in legal papers and a network of individuals and events where they can learn business strategy.

It’s not a substitute for your own attorney, of course, but it can help smaller firms better organize things and keep their legal fees to a minimum.

The start-up tool kit features three main components.

Term Sheet Creator: This series of interactive questions helps you create drafts of venture or start-up finance documents. The founders term sheet puts together a framework for you to organize your start-up and gives you something more concrete to memorialize the “deal” among founders before formally incorporating.

Similarly, the bridge financing term sheet lets you easily put together your financing picture before you begin chasing VC money and the preferred stock financing term sheet lets you prepare for additional investors.

Start-Up Forms Library: This collection of downloadable legal forms is meant to help you start and grow your company. There are 17 documents at present, including ones focusing on corporate formation, founder’s stock purchases, certification of incorporation, employee agreements and equity compensation documents.

Event Series: Like many legal firms, Orrick offers a slate of panels and lunch seminars. Called the “Total Access” Event Series, these particular gatherings focus on start-up venture-capital concerns. If you’re not based in Silicon Valley or San Francisco, though, this will be the least useful part of the kit.

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About the Author, Chris Morris

Chris Morris is editor of the Entrepreneur Corner on VentureBeat, helping start-up business owners launch and grow their companies. He previously worked at Yahoo! Finance, where he was managing editor, and as director of content development at CNNMoney.com. His work has also appeared in Variety, CNBC.com, AOL and Forbes.com.

  • Chris, thanks for posting.

    If you're like most entrepreneurs, dealing with legal firms for issues like company formation, financing and business contracts makes you cringe because you know it's going to hurt. I'm talking about your pocketbook. Hiring big law firms these days will cost you hundreds of dollars per hour and you're often handed a junior attorney that's learning the ropes.

    For entrepreneurs with zero capital these legal doc's look like a good way to get started. For other entrepreneurs who have some capital it's probably worth finding an independent attorney who worked at one of the big firms but has struck out on their own...their prices are usually significantly less but you won't give up the quality.
  • Barnaby
    Awesome!
    Lawyers are not worth what they charge, and if you're choosing between a piece of paper and 3 months of Ramen to fuel product development ... just copy and paste the paper from elsewhere, and revisit it when you're profitable.
  • I can't agree with the statement that lawyers are not worth it. I have been running operations "nuts and bolts" of startups for 12 years already and I know there is no substitute for a good attorney. BUT, I also have spent some time working in a law firm (no longer there, and no, I am not a lawyer) and had very good view of some of those cleanups attorneys had to do pre-investment. It was not pretty. Entrepreneurs need to invest time educating themselves on legal issues. The more you learn, the less you will have to spend on attorneys.
    That all said, you should not be paying attorneys to draft documents. You can save money by getting these boiler-plate docs, just like (...gasp...) many attorneys do themselves. Scribd.com and some other sites are frequented by associated who have to draft those docs. Find a good attorney and use them for direction and final document review.
  • scottmunc
    This is a great resource for entrepreneurs. Thanks.
  • maryanderson
    Entrepreneurs aim high in order to surpass their expectations.
  • It's hard to finalize a contract without your lawyer at least reviewing it...
  • adbirds
    This is a great resource. I hope you will use it too.
  • Texsquire
    Most of the time, deals can be structured in a variety of ways, and companies can be established and formed in just as many. The key to not shooting yourself in the foot as you get out the door is to make sure you have proper advice in terms of structuring. This includes everything from tax advice to buy-sell triggers embedded in partnership documents. A little advice from a good lawyer can save you many times your initial investment. I am biased, of course, because I am a lawyer, but I will tell you now, I have had to "fix" so many bad entity structures before a liquidity event arises, such as an equity or asset sale, and it makes me cringe each time because, even though I love making money as a lawyer, I hate doing it where the client is having to fix something that should have been done right in the first place. It's a waste. One example is people in c-corporations with high built-in gains because their business was wildly successful- the c-corp structure subjects them to a 55% tax rate in the event of an asset sale (which is the typical sale form for small businesses- purchasers don't want the liabilities that come with equity). If they had been in a partnership they'd be looking at typically a 15% tax rate. That's quite a sum, and it's tragic to see an entrepreneur's hard-earned money go either to (1) Uncle Sam or (2) a lawyer so that the deal can be fixed on the back end. My advice- spend a little, get some good legal advice, and know you're set up great in the beginning. If you don't go get legal advice right from the start, then at least get it before you get too big to undo whatever missteps have been taken. Best of luck to all of the entrepreneurs out there!