7 ms·

Totally understand the concern. We designed Clerky so that you can easily loop in your lawyer to review everything. So if you don't feel comfortable doing eve

Totally understand the concern. We designed Clerky so that you can easily loop in your lawyer to review everything. So if you don't feel comfortable doing everything yourself, you can still have a lawyer review and save yourself time and money by having software take care of all the paperworky aspects (word processing, printing, scanning, collating, etc.). So you get the best of both worlds!

Nrsolis 14y ago
I LOL'ed. The number of lawyers who will review a corporate formation package you bought online is laughably small. Asymptotically zero in fact. A better idea would be to provide the option to connect with the lawyers who drafted these specific documents and have them tailored to meet your requirements. Having legal work done is not like getting a Wordpress theme. If you screw up, it costs real dollars and huge headaches in lost opportunities, liability, and lawsuits. For the love of god, if you are planning on taking a partner or outside investors, please use reputable counsel and get things done right. Once you signed the documents, filed the papers, and taken the money, it's WAY TOO LATE. Otherwise, you might find yourself in a nasty lawsuit arguing about the meaning of some obscure term of art that is only exposed by some recent case law generated by a finding having nothing to do with your industry. And for the privilege, you could find yourself paying not only your own legal fees but the other sides too. Caveat emptor.
- swampthing 14y ago
  Hmm - well, let's just say that our experience differs from yours. A pretty significant number of our customers cc their attorneys and have them sign off everything before finalizing the documents. If your attorney won't do this, feel free to contact us and we'll send you to someone who will. Your lawyer should work for you, after all, not the other way around. I agree that a lot of online forms out there aren't great - it's why we built Clerky, to fill that need. Our forms are very well-vetted by some of the best startup attorneys in the industry (you can look at our About Us page to see our advisors).
  - Nrsolis 14y ago
    I'm willing to bet that attorneys on the west coast (I mean CA) are more liberal about this sort of thing. And I'm positive that your documents are great. No problems there. BUT, as I stated above, once you get into making adjustments, it's better to have the original attorney or one who is intimately familiar with the industry consulted early in the process or there could be trouble if someone feels like they got the shaft. See: http://en.wikipedia.org/wiki/Eduardo_Saverin http://en.wikipedia.org/wiki/Eduardo_Saverin
    - swampthing 14y ago
      If your lawyers refuse to review something you send them, you should really consider getting a different one. That's just unreasonable, no matter where your attorney is located. But yes, to your point - if you are doing anything custom, need tweaks to the forms, or anything else like that - by all means, get an attorney.
- tptacek 14y ago
  This is a great way to spend $15,000 in your first year to end up in exactly the same place as a team that bought the one-click DE C-corp package off the first AdWord ad on the first "incorporate" SERP. Number of horror stories I've heard about people spending shitloads of money to get incorporation done badly by some random attorney: many. Number of horror stories I've heard about people putting off incorporation because they believed they needed to do it "right" expensively and having that decision later bite them in the ass: many. Number of horror stories I've heard about people going out of business because they started out with some cheap default incorporation plan: zero. There is an advantage to running with a simple, cookie-cutter corporate structure. That advantage is compounded when it's the structure that happens to be used by a whole bunch of YC companies, since YC has a lot of experience pounding corporations into a shape that is acceptable for next funding rounds. There is no advantage I know of to spinning a roulette wheel, picking the lawyer it lands on, and having them draft a bespoke operating agreement. Incidentally (having just read a bunch of your earlier comments): there are definitely LLCs that elect to file as S-Corporations. We're one of them. Filing as an S allows the principals to take W2 wages instead of distributions; the entirety of your distribution is, as I understand it, subject to self-employment tax, while an S-Corp W2 is FICA-taxed the same way a normal employee's is. We didn't freelance this decision; quite a lot of money flows through our company and we have good accountants.
  - Nrsolis 14y ago
    You are missing my point: if you think you need a lawyer to review a document you obtained elsewhere, you're gonna have a bad time. I have no problem with using a standard structure and replicating that across many many companies. That's smart. I be surprised if it wasn't done already. BUT: once you stray from the One True Path to C-Corp, you're asking for trouble if you don't really dig in with a knowledgeable attorney who knows your industry, your goals, and how to keep you out of court. The Law is not something you can really hack. IMHO, most people are better served by a simple LLC to get started. I'd agree that using a C-corp is a good idea if you're building a company specifically to seek investment from VCs, but if you're looking to just insulate yourself from the downside aspects of starting a business, it's hard to beat a LLC for simplicity.
- jmharvey 14y ago
  Finding a good lawyer can be hard, but a good lawyer won't object to reviewing docs you got online. Lawyers review contracts written by other people all the time. If your lawyer won't review a well-written document because of its origin, replace the lawyer, not the documents. This isn't the same as a lawyer saying, "I've read through it, and we can go line-by-line to find all the issues, but you're better off starting from scratch," but based on what I've seen, the Clerky docs are a lot better than that.

Nrsolis 14y ago

I LOL'ed. The number of lawyers who will review a corporate formation package you bought online is laughably small. Asymptotically zero in fact. A better idea would be to provide the option to connect with the lawyers who drafted these specific documents and have them tailored to meet your requirements. Having legal work done is not like getting a Wordpress theme. If you screw up, it costs real dollars and huge headaches in lost opportunities, liability, and lawsuits. For the love of god, if you are planning on taking a partner or outside investors, please use reputable counsel and get things done right. Once you signed the documents, filed the papers, and taken the money, it's WAY TOO LATE. Otherwise, you might find yourself in a nasty lawsuit arguing about the meaning of some obscure term of art that is only exposed by some recent case law generated by a finding having nothing to do with your industry. And for the privilege, you could find yourself paying not only your own legal fees but the other sides too. Caveat emptor.

swampthing 14y ago
Hmm - well, let's just say that our experience differs from yours. A pretty significant number of our customers cc their attorneys and have them sign off everything before finalizing the documents. If your attorney won't do this, feel free to contact us and we'll send you to someone who will. Your lawyer should work for you, after all, not the other way around. I agree that a lot of online forms out there aren't great - it's why we built Clerky, to fill that need. Our forms are very well-vetted by some of the best startup attorneys in the industry (you can look at our About Us page to see our advisors).
- Nrsolis 14y ago
  I'm willing to bet that attorneys on the west coast (I mean CA) are more liberal about this sort of thing. And I'm positive that your documents are great. No problems there. BUT, as I stated above, once you get into making adjustments, it's better to have the original attorney or one who is intimately familiar with the industry consulted early in the process or there could be trouble if someone feels like they got the shaft. See: http://en.wikipedia.org/wiki/Eduardo_Saverin http://en.wikipedia.org/wiki/Eduardo_Saverin
  - swampthing 14y ago
    If your lawyers refuse to review something you send them, you should really consider getting a different one. That's just unreasonable, no matter where your attorney is located. But yes, to your point - if you are doing anything custom, need tweaks to the forms, or anything else like that - by all means, get an attorney.
tptacek 14y ago
This is a great way to spend $15,000 in your first year to end up in exactly the same place as a team that bought the one-click DE C-corp package off the first AdWord ad on the first "incorporate" SERP. Number of horror stories I've heard about people spending shitloads of money to get incorporation done badly by some random attorney: many. Number of horror stories I've heard about people putting off incorporation because they believed they needed to do it "right" expensively and having that decision later bite them in the ass: many. Number of horror stories I've heard about people going out of business because they started out with some cheap default incorporation plan: zero. There is an advantage to running with a simple, cookie-cutter corporate structure. That advantage is compounded when it's the structure that happens to be used by a whole bunch of YC companies, since YC has a lot of experience pounding corporations into a shape that is acceptable for next funding rounds. There is no advantage I know of to spinning a roulette wheel, picking the lawyer it lands on, and having them draft a bespoke operating agreement. Incidentally (having just read a bunch of your earlier comments): there are definitely LLCs that elect to file as S-Corporations. We're one of them. Filing as an S allows the principals to take W2 wages instead of distributions; the entirety of your distribution is, as I understand it, subject to self-employment tax, while an S-Corp W2 is FICA-taxed the same way a normal employee's is. We didn't freelance this decision; quite a lot of money flows through our company and we have good accountants.
- Nrsolis 14y ago
  You are missing my point: if you think you need a lawyer to review a document you obtained elsewhere, you're gonna have a bad time. I have no problem with using a standard structure and replicating that across many many companies. That's smart. I be surprised if it wasn't done already. BUT: once you stray from the One True Path to C-Corp, you're asking for trouble if you don't really dig in with a knowledgeable attorney who knows your industry, your goals, and how to keep you out of court. The Law is not something you can really hack. IMHO, most people are better served by a simple LLC to get started. I'd agree that using a C-corp is a good idea if you're building a company specifically to seek investment from VCs, but if you're looking to just insulate yourself from the downside aspects of starting a business, it's hard to beat a LLC for simplicity.
jmharvey 14y ago
Finding a good lawyer can be hard, but a good lawyer won't object to reviewing docs you got online. Lawyers review contracts written by other people all the time. If your lawyer won't review a well-written document because of its origin, replace the lawyer, not the documents. This isn't the same as a lawyer saying, "I've read through it, and we can go line-by-line to find all the issues, but you're better off starting from scratch," but based on what I've seen, the Clerky docs are a lot better than that.