British Innovation And Start-Up Heads Wholly Unsupported By Legal Sector
The founder of a legal comparison and procurement service has said that the law’s refusal to catch up with and adopt technology is impacting on the potential of British innovation and start-ups’ growth.
Alexandra Isenegger, founder and chief executive of Linkilaw has stated that British startups are being left to drown at sea due to lack of support from the legal sector, with many being eaten up by larger firms, many foreign, striking poor deals or worse entering into legal disputes that appear to be above their heads.
In fact, the appearance of a lack of legal shrewdness on the part of start-up heads can in fact discourage angel investment or expansion overseas, as a result leaving British innovation fulfilling only part of its potential.
Isenegger warned: “The UK legal sector [doesn’t] understand start-up culture and there is a complete mismatch in service provision and pricing models.”
She could have a point. Though there has been much noise in recent years about the legal industry’s need to adopt technological processes for the sake of efficiency and cost-savings (for both client and firm); the key concern here however is the provision needed for startups is particularly acute and specific.
Firms should look at creating legal products with the following in mind – that start-ups generally have either volatile cash flow or low capital investment. They tend to search the internet for cost saving templates many of which are too generic for their needs to be effective or relevant. Or worse, they simply waive legal services altogether “hoping for the best.”
The most common considerations for start-ups cover for example can include the proper setting up and management of share options, employment contracts that are solid and appropriate, intellectual property rights, and relinquishing equity in the company today can impact on future funding rounds.
Companies such as Linkilaw are providing streamlined processes via technology by enabling the business to match clients to specific practitioners according to service requirement, available budget and fixed-rate terms. This should in turn make the job of lawyering simpler as well as reduce the cost of legal services for businesses without shrinking profit margins.