When choosing a law firm for your startup in Nigeria, consider the following factors:
- Specialization: Look for a law firm that has expertise in the area of law that is most relevant to your business. for instance vazi legal specializes in startup law.
- Reputation: Research the firm’s reputation and track record for successfully representing startups.
- Size: Consider the size of the firm and whether it has the resources to handle the legal needs of your growing business.
- Cost: Get quotes from different law firms and compare the costs and services offered to ensure that you get the best value for your money.
- Availability: Ensure that the law firm is responsive and available to answer any questions or concerns you may have in a timely manner.
- Location: Consider a law firm that is conveniently located, to make it easier for you to meet with your lawyer in person if necessary.
- Network: Look for a law firm that has a strong network of contacts and can help connect you with other businesses and entrepreneurs.
- References: Ask for references from other startups that have used the law firm and get their feedback on their experience.
By considering these factors, you can make an informed decision on which law firm is best suited for your startup’s needs.
The legalities of establishing a startup in Nigeria are enormous and can be overwhelming for the average entrepreneur. They are concerned with the day-to-day running of their business, improving productivity and customer satisfaction, and moving their business from one point to another. Handling legal issues constitutes too much of a burden.
This is why it is important to work with a law firm as a Nigerian startup. In this article on how to choose a law firm for your startup in Nigeria, we will be discussing important criteria to look out for when choosing a law firm, what kind of law firm you should choose, and the cost of choosing a law firm for your startup.
It is essential to note that there is no startup or business venture that does not require the services of a law firm. Some of the legal issues startups face include confidentiality and non-disclosure agreements, trademarks and licensing; tax payments, founders’ agreements; insurance, business structure; and much more. The legal side of doing business is as important to the growth and development of a business as every other aspect that seems essential.
Wondering why a law firm is important for your startup in Nigeria? Here are a few reasons why you need a law firm for your startup.
Why is a Law Firm Important for Your Nigerian Startup?
The following are some of the reasons why the role of a law firm cannot be neglected.
To identify business risks and challenges
A startup needs a law firm to be able to identify risks and prevent them from happening. The best way to do this is by having legal counsel who is familiar with the business model and its issues. There are many areas where startups can benefit from having a law firm as part of their team.
The first one is to have someone who can advise on all legal matters, from employment contracts to intellectual property protection. A good lawyer can help you avoid potential pitfalls, such as making mistakes in your contract that could lead to lawsuits down the road.
Another reason why startups need a law firm is that they can provide an unbiased perspective on any issues that arise in the company. This means that if any employees are causing problems, they can give advice on how they should be dealt with without any bias towards anyone involved in the conflict.
Finally, startups need a lawyer because he or they will know what types of contracts are needed for each situation and what types of clauses should be included in those contracts so that everything runs smoothly for everyone involved.
To assist with licensing and registration
For every startup to function according to the dictates, rules, and regulations of the law, it must be duly registered and licensed. You cannot operate in the business world as a startup with complete licensing, registration, and authorization. There are fundamental things that must be done for a startup to operate fully, and a law firm can help you figure them out and get them done.
The last thing any entrepreneur wants is for their company to get sued or banned because of something they would have avoided if they had worked with a law firm.
To ensure regulatory compliance
For every industry and business, there are stipulated guidelines that must be observed as regards licensing and registration, and every business owner and brand must follow them dutifully. A credible law firm must be consulted to ensure regulatory compliance across all borders of a business’s operation. It would be the duty of the law firm to identify the specifications and guidelines for the operation of the startup and provide counsel on how to achieve compliance.
Tax payment and compliance
A lot of businesses default on tax payments and compliance. While this may look smart, companies that get caught by government agencies overtax defaulting are often left in a far worse financial state than if they had complied with government tax regulations. A good law firm would emphasize the need to comply with government laws on taxation and decide how the startup could optimally pay taxes.
Funding Support
This is another important aspect of a startup’s lifecycle where a law firm’s role cannot be overemphasized. When we talk about funding for a startup, there are several issues that should be handled, from equities to shares to repayment to disbursing to investing and much more.
Even if a startup understands the numbers and how to manage investments, they would require the services of a law firm to document and legalize activities on these matters.
One of the benefits of a law firm to a startup founder is that they do not share in the desperation of the founder. The founder, in his or her desperation, may want to take a loan, accept to give an equity percentage for a funding round, or agree to a deal that may not be suitable for their startup at the time.
Most of the time, founders get so carried away by their desire to make things work that they jump into decisions they regret later.
With a credible law firm on their side, startups will not have to make unnecessary decisions that may be detrimental to their company in the future. A law firm can save a startup from taking the wrong turn or legal action against their business.
Founder’s shareholding rights and equity sharing
For a startup that has more than one founder, rights, shareholding, and privileges are a delicate matter. If the rights and shares of each founder are not clearly determined and made to be legally binding, a lot of things will go wrong with the startup. There have been cases of startups breaking up because one of the founders decided to sell his or her share of the company, and there was no legal structure to prevent such levels of greed.
Aside from founders, people investing in companies are offered equities and shares. These investors get between 5% and 40% in equity, but if this equity sharing is not done properly, a company’s founder may lose control of the company before they know it. Law firms often advise startups to not give out equity at the pre-seed stage, and they also work with startups to make the right decisions in every funding round they undergo as a company.
Intellectual property (IP) protection
If your startup is going to be making products or creating software, you need to protect your intellectual property. There is a lot of plagiarism going on, and if you do not have a legal structure to prosecute intellectual property thieves, you will have your company’s hard work blown away by unscrupulous individuals.
Furthermore, as a startup, you could outsource product creation to freelancers and other employees in your company. This will allow you to use products made by other people on your behalf while preventing them from using them or selling them to another client.
There are many more things a law firm can do for a startup in Nigeria. From contracts to privacy policies and much more, the role of a law firm for your startup in Nigeria cannot be overemphasized. Now that we’ve established why a law firm is important, let’s discuss the kind of law firm you should choose for your startup.
What Kind of Law Firm Should You Choose for Your Startup?
The kind of law firm you choose for your startup can make or mar you. Not every law firm or lawyer is equipped or experienced in handling startups and the legal issues of startups. As such, there are two recommendations in choosing a law firm for your startup in Nigeria:
- A law firm that understands the business world and its legalities
- A law firm that handles issues faced by startups in your industry
It is essential to note that not every law firm can handle business-related issues. Some lawyers who own law firms may be criminal law firms or litigation law firms. Not every law firm understands how the business terrain in Nigeria works and can provide legal guidance to startups. You should look for a law firm that has proven expertise on the legal side of business. I will show you how to choose a law firm for your startup in Nigeria soon.
Still, as to the kind of law firm you should choose for your startup, you should note that industries, niches, and sectors differ in their demands and regulations. A business in the maritime industry will be different from a business in the transportation industry. There are different strokes for different folks and different law firms for different startups. Ensure that the law firm you choose for your startup has expertise in the industry where your business is domiciled and can handle issues susceptible to startups in your industry.
Tips on How to Choose a Law Firm for Your Startup in Nigeria
There are a lot of things that go into choosing a law firm for your startup. You should consider the following before deciding on a startup to choose:
Affordability
As a startup, there are several things that take up the capital in your business. You are typically going to have to pay to hire a law firm for your startup, and this may cause a financial burden. It is therefore important to choose a law firm that is within your budget. The affordability of a law firm is an important criterion in choosing one for your startup.
Area of Expertise
We already discussed this in the kind of law firm you should choose for your startup. Earlier, we made it clear that not all law firms can handle the demands of startups and businesses in Nigeria. Check that the area of expertise of a law firm covers startups and the legal side of doing business in Nigeria.
Law Firm’s Reputation
The reputation of the law firm should be put into consideration before hiring them to handle your startup’s legalities. Before hiring a law firm, you should make inquiries or perform an internet search to determine the credibility and reputation of the firm. It is also helpful to check with the Nigerian Bar Association to see if the lawyer and the law firm have good standing with the Bar.
Trustworthiness
Checking the trustworthiness of a law firm is important before hiring one. Under trustworthiness, you want to be sure that the law firm has a track record of success in getting the best outcome for their clients in cases that pertain to those your business will typically suffer. If required, ask the firm for the number of cases they have handled in a specific area to be sure.
Effective Communication
As an entrepreneur, you understand how important effective communication is. No partnership, business, or relationship can succeed without effective communication. In your choice of a law firm for your startup, hire one that is capable of effectively communicating with you and understanding the demands of your startup as regards the law.
If you have seen a law firm you want to hire, it pays to ask other people who have worked with the firm what they think about their communication abilities. Don’t settle for a law firm whose approach to clients is poor in terms of communication.
Experience and expertise
The level of experience and expertise a law firm has goes a long way in determining the quality of service your startup will receive working with them. It pays off to work with a law firm that has built a reputation over the years and has a track record of success, which validates their expertise in handling cases related to businesses and startups.
Another important consideration as regards experience and expertise in choosing a law firm for your startup is to consider firms that have multiple practitioners over ones that have a sole practitioner. When you are dealing with the former, you will have a variety of options to choose from when you are dealing with the latter.
How Do You Find a Good Law Firm for Your Startup in Nigeria?
Having gone through the tips to choose a law firm for your startup, it is essential to know where to look when you want to hire the services of a law firm. There are several ideas about where to look to find a law firm for your startup, but the following stand out:
- Searching the Nigerian Bar Association portal
- Asking for referrals
Searching the Nigerian Bar Association portal
The Nigerian Bar Association is the governing body for lawyers and law firms in Nigeria. They possess a database of registered and trusted lawyers and law firms, and you should be wary of dealing with any lawyer or firm that is not registered with the NBA.
You can find out the status of a lawyer or law firm by visiting the NBA portal at www.nigerianbar.org.ng, locating and clicking on the Find a Lawyer tab, entering the full name in the box provided, and voila.
Asking for referrals
The surest way to find credible law firms to work with is to ask for referrals. People who have used the services of a law firm can experientially tell you whether a particular law firm is worth your patronage or not. Ask questions about good law firms to work with, ask other business owners who they work with, and do internet searches.
At What Stage Should You Engage a Law Firm for Your Startup?
The best time to engage a law firm for your startup is when you have plans to establish one. You need the services of a law firm as soon as work on your new startup begins. There are several documents that must be provided as your startup idea moves from conception to actualization. Hence, you need a law firm as soon as you start working on your startup.
The issue for most startup founders is the inability to afford one. So the main question should not be about when to engage a law firm, but when will your startup be able to pay for the services of a law firm. The longer you wait, the bigger the risk your startup will face. There are a lot of things that could go wrong when a startup fails to hire the services of a good law firm.
How Much Do Lawyers Charge to Draft a Contract in Nigeria?
There is no fixed price for what lawyers charge when drafting a contract. Law firms typically charge between 100,000 and 350,000 naira to draft a contract, depending on the reputation of the firm and the nature of the contract. Some law firms may even charge higher than 350k.
According to the provisions of the law, there are a variety of fee types law firms can charge when drafting a contract. It is solely up to the discretion of the law firm to decide how they charge you to draft a contract. It is also important to note that only a lawyer and a law firm are mandated by law to create a contract. Hence, to have a legally binding contract, it has to be prepared and administered by a lawyer.
Some Startup Law Firms in Nigeria
The following are some of the law firms for your startup in Nigeria:
- Vazilegal
- Resolution Law Firm
- Infusion Lawyers
- Lawrathon
- Aluko & Oyebode Law Firm
- Templars
- Elias & Co.
Any of the aforementioned law firms can provide comprehensive legal guidance for your startup. The firms have a reputation and success rate that match the criteria for choosing a reliable law firm for your startup, and you cannot go wrong with any of them.
Conclusion
Working with a law firm is incredibly important. You cannot survive as a business startup in Nigeria without having the support and backing of a law firm. In this guide, we have shown you how to choose a law firm for your startup in Nigeria. Some of the tips include checking the firm’s area of specialization, communication ability, size, reputation, integrity, and affordability.
We also explained how to find a good law firm for your startup, which includes checking with the Nigerian Bar Association and asking for referrals. Finally, Vazilegal is top on the list of startup law firms in Nigeria to hire for your startup and company.