When it comes to outside lawyers and accountants, you want the best of the best for your business. This is no time to skimp. But how...
When it comes to outside lawyers and accountants, you want the best of the best for your business. This is no time to skimp.
But how do you know who's genuinely in it for the long haul?
We asked a panel of 11 startup founders from the Young Entrepreneur Council (YEC), a group of successful entrepreneurs, how they vet the most experienced outside consultants.
1. Make Sure the Providers Speak to Your Needs
The best lawyers for startups typically understand that you don't have a lot of money to spend on them today. If they have "startup packages," it's usually a good sign they understand that you'll need a core base of services at a manageable rate in hopes of winning your long-term business. If they're talking to you like you're a large company, then you're dealing with the wrong people. - Andy Karuza, Brandbuddee
2. See if They Will Recognize Your Mistakes
I need people who can tell me I'm wrong when I obviously am. One of my favorite vetting techniques is to do something wrong (such as telling an accountant to edit an Excel sheet, but sending him a PDF instead) to see if he emails me back to fix my mistake. I'm not testing whether they can do the job; I'm testing whether they'll fix my problems when I inevitably have them. - Liam Martin, Staff.com
3. Make Sure They Know Your Industry
Lawyers should know the industry your startup lives in (not just how to set up a company), otherwise they won't know how to advise you. When we sourced our general counsel, that was our key deciding point: Did the partner know crowdfunding and fashion-related law? - Benish Shah, Before the Label
4. Ask the Important Questions
Accountants and lawyers are like doctors: Some are great and some are terrible. It's important you find out which one they are as quickly as possible by asking questions. For example, when you ask lawyers a legal question, they often go off track while racking up hours of fees. So, before you engage, get references and ask if they're willing to work on a "per-item" basis. If not, dig deeper. - Adam Callinan, BottleKeeper
5. Talk to Their Startup Customers
When vetting professional service providers such as accountants and lawyers for your startup, ask to talk to their startup customers. You want providers that work with startups on a daily basis and understand the little nuances that come with startups. - Tim Jahn, matchist
6. Test Run Them Before Hiring
Get them in the door (literally), and see how they perform for half a day before hiring. A startup is a fast-paced environment, and if the person really wants to work there, he won't mind proving his worth. - Andrew Schrage, Money Crashers Personal Finance
7. Request Flat Project Rates
Startups often have legal needs that can cause large, unexpected legal bills. Ask your attorney for flat project rates that allow you to better budget your legal expenses. If an attorney will not provide a flat rate, he might be willing to agree to a cap on the project, which can also help you prevent surprise legal bills. - Doug Bend, Bend Law Group, PC
8. Ask Them to Take Equity
The best startup service providers love taking equity. They don't just provide a service -- they actually partner with the startup. They are along for the ride with you. They want to take equity rather than cash to show you they believe in you and your business. Look for these people. - Adam Lieb, Duxter
9. Understand Their Pedigree
Do not be afraid to ask about the service provider's professional background, from education and where they cut their teeth to professional and entrepreneurial associations. Obviously, a good pedigree does not guarantee quality. But short of actually working with the provider, a strong résumé is your best bet at determining their ability. - Peter Minton, Minton Law Group, P.C.
10. Look for Benefits Beyond Cost
If you're looking for a long-term relationship with a professional service provider, see how you can take your relationships beyond just paying for a service. Look for ways to provide a higher level of mutual benefit. Your accountant may be able to recommend other service providers, for instance, and you may be able to offer that accountant a chance to use your product early. - Thursday Bram, Hyper Modern Consulting
11. Understand Their Client Mix
I like to understand what percentage of their time is spent working with startups versus established companies, and then understand their motivation for working with startups. Besides just making sure they have the stomach to work with your startup, it is critical to understand how it fits into their client strategy because that will help you understand how you'll be treated.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.(Image: via freedigitalphotos.net)