This is part of series of blog posts I'm writing on lessons learnt while building and finding product market fit with Engyne.
I was shocked at the bill.
It's a cost I really didn't factor in. I really messed up.
Lawyer bill for exit negotiationsA bit of background
Backing up, last month, my co-founder and I decided to split up— amicably, of course. Part of the chat was negotiating exit terms.
When we first started the company we partnered with a very well known startup legal firm in the country to do our incorporation. For $5K.
Now I know what you're thinking - Sukh you can incorporate your company for free over a weekend.
Totally. The thought we had was:
Having a big name law firm could get us access to new customers
When we raised, there wouldn't be any complications as we would be set up the right way from the get go
They had a startup plan where you can move defer the $5K fees until after you raise
So it was basically free.
Negotiating the exit
When we started having the exit negotiations, we had to get the lawyers involved for the paperwork. We went back and forth ourselves and they did the necessary changes.
They never specified that the calls and the work done would be billed and how much.
I naively thought that this was part of the "Startup package".
It wasn't and we got hit with the bill after a few weeks. $7235. ~10 hours billed at ~$700/hour.
Lesson Learned
A couple of lessons from this:
Being consumed by day-to-day bugs, features, calls, etc., is fine, but you can't let things like accounting, taxes, legal, etc. fall through
Start off with a cheaper option and work your way up
When talking with lawyers, always ask if it will billed or not and by how much
