Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m M A R C H 2 0 1 7 27 passion in their eyes," he says. "When we go and chat about their business over din- ner or drinks, they'll invariably get some free advice, but that's fine. It's not all about sending a bill. I want them to succeed, and if they do, then they can send me some more complicated work." The other benefit of immersion in the startup scene is that it gives lawyers a chance to size up potential clients. Before joining Osler Hoskin and Harcourt LLP and founding the firm's emerging com- panies practice group, Chad Bayne had a previous career as a computer engineering grad and software designer for Ottawa telecommunications company Newbridge Networks. That background not only gives his credibility a boost with clients, it also allows him to make better judgments on their long-term viability. "If you've been around long enough, you just know when a founder is special. At an early stage, all you're really doing is betting on the person or the team of people they have behind them," Bayne says. "The longer you do it, the better bets you make." At Stewart McKelvey LLP, Adam Bata says lawyers in the field need to increase their tolerance for failing clients, compar- ing his work with startups at the firm's Halifax office to that of a movie producer. "For every big hit, you might get anoth- er eight or nine that fall by the wayside," he says. "The really creative founders will learn from the experience and come back again with a new idea." Stewart McKelvey isn't the only Mari- times firm willing to "kiss a few frogs" in the hopes of finding a startup prince, says Sandra Goodwin, managing director of client development and service at McInnes Cooper LLP. The firm is a major sponsor of Volta, a four-year-old hub for entrepreneurs in a variety of sectors, and every week sends one of its lawyers to run open office hours at Volta's Halifax office. "Whatever is keeping them up at night, they can come in and talk it through," Goodwin says. "It's a way of staying keyed in to the startup community." McInnes Cooper runs a "BIG potential" program for companies that can demon- strate "business innovation and growth." For startups that make the grade, the pro- gram is designed to guide them through the first two years of their existence with a combination of fixed fees and cut rates in the areas of intellectual property, tax advice, employment law and others, tailored to individual companies. The firm is also in the process of devel- oping Legal Ninja, a subscription tool for entrepreneurs who want to create and manage their own legal documents using templates and guidance from the lawyers. Modelled on tax software that takes cus- tomers through their annual return, Good- win says the hope is clients will eventually be able to use fillable forms to create docu- ments including employment contracts and non-disclosure agreements. "Then if you have a problem answering a question, it's designed so that you can call or text a lawyer for help," she says. Jack Newton, the co-founder of Clio, a cloud-based practice management tool for lawyers, says law firms who want to attract startup clients need to show a willingness to embrace new ways of doing business. Despite running a business aimed at the legal profession, he and his co-founder were initially outsiders to the legal world and struggled to find a lawyer that could match up to their standards. "Law firms need to think about how to shift from the old service delivery model to a new one that makes it as effortless as possible for the clients," he says. That's particularly true of millennials, the generation that has produced a large proportion of recent startup founders, according to Newton. "Your millennial founder does not care about a law firm's fancy downtown offices and certainly does not want to come there to see you. They probably want to talk over Google Hangouts or Facetime from the comfort of their own office, and they don't want to fret about whether you're on the meter every time you talk," he says. At Kahane Law, Clements makes lib- eral use of flat rates for startup clients in an effort to ease the chronic cash shortages that almost all new businesses share in their early days. The firm offers a 12-month startup kit to clients priced at $2,599, which includes an hour-long initial meeting, plus a further 30 minutes in consultations per month, as well as incorporation, share issu- ance and other discounts. "Clients really appreciate it. I've been on the other side, and I know what it's like to make a dollar stretch. I also know how frustrating it is to think you're paying one fee and then get a bill for three times that amount," Clements says. "Unfortunately, many people come into relationships with lawyers with a level of reticence or distrust, so I try to stick to the cost I set as much as possible. We're trying to let clients enjoy the process and show them that it doesn't have to be painful." Pawar is more of a fixed-rate skeptic, preferring to put together a customized fee structure depending on the client's indi- vidual situation. "I understand the rationale, but it's the one-size-fits all part that I'm not comfort- able with," he says. Pawar says it's still possible to achieve budget certainty with a cost estimate based on a thorough assessment of the startup's needs. The firm will regularly defer fees or legal matters, depending on the urgency. "At an initial meeting, we want to do a lot of listening, and then have an open and frank conversation. Once you know more about where they are in the process, the experience of the entrepreneur at the helm and their long- and short-term goals, you can get on with setting a roadmap for them," he says. "Letting them know what they might not need right at that moment can be as important as what they do need immedi- ately. If a shareholder agreement is needed but not for another six months, then we can talk about pushing that down the road." Weinstein says IP issues are often first on the agenda for her clients. "If they come to us after working in their basement, they don't necessarily have any money, but they have one very valuable asset: their intellectual property. And many times, they won't have any agreements to protect it," she says. Brock Smith at Launch Academy, a startup hub in Vancouver where his clients work. ANGELA FAMA

• Cover