Seeking out legal services can be a fraught endeavor for the leaders of startup companies.
Whether founders have concerns about the cost of counsel or uncertainty about the value of having a lawyer on their side in the early stages of their businesses, they often lack confidence when they’re obtaining legal services.
One Kansas City-based law firm is hoping to change that by giving startups in the region a hand — offering free legal counsel and access to a deep well of mentors.
Spencer Fane launched its Startup Lab in 2018. The lab is co-chaired by Carly Duvall, who is of-counsel at the firm, and Patrick McAndrews, a partner.
McAndrews said the idea for the lab grew out of the firm’s participation in efforts to connect established companies in Kansas City with startups. He approached Duvall and posed the question: How could the firm contribute to that effort?
The two put their heads together and hatched the idea of creating a lab in which participants could get access to three months of the firm’s legal services — at no cost.
When they started meeting with startup organizations, they learned that startups often struggle with obtaining legal services. They also found that the firm could help companies by providing access to mentorship.
“We started approaching some of our clients who were startups 20 to 25 years ago [as potential mentors], and they were like, ‘We love this idea,’” McAndrews said.
They also won over the firm’s leadership. The firm workshopped the idea during a nine-month period and selected its first participant, Helix Health, last fall. The company uses technology to improve outcomes for individuals suffering from chronic diseases such as diabetes.
Each quarter, the lab will select a new company with which it will work for a three-month period, McAndrews and Duvall said. The firm accepts applications on a rolling basis, and participants are selected following interviews with an internal firm committee. The application can be found on the firm’s website.
McAndrews and Duvall said the lab is seeking startups located in the Kansas City area. In terms of development, the firm is looking for companies that are past the idea stage.
“We want companies that will actually use as much as they can of legal services in their three-month period,” McAndrews said. “If they’re too new, they’re probably not going to use our services as much.”
The two said the effort aligns with clients the firm already serves: small and mid-sized companies within their geographical footprint.
“It’s mostly local companies,” McAndrews said. “This kind of worked really well with our brand. We would like to see these companies become these mid-sized companies and stay in the area and generate jobs here.”
How it works
With each new startup, Duvall and McAndrews start the first month by meeting with the company’s leaders to learn more about their needs and concerns.
In terms of legal work, Duvall said the firm typically starts with formation documents and spends time with companies to learn their business structures.
The second month is focused on connecting startups with mentors.
“We try to connect with three to five mentors in the community, and we use our network — both our client network and our network as attorneys in the community — to connect them with the right individuals,” she said.
In the third month, Duvall said, they want to ensure their participants leave the lab with a strong foundation. At the end of the program, she and McAndrews meet with participants to talk about their 12-month business plan.
“We marry that with a legal services plan,” she said, explaining that the team talks with the business about next steps and pairs it with legal services they anticipate it will need.
They give the startups an anticipated budget for those services, too. Breaking down legal costs is an especially helpful service they can provide startups, McAndrews said.
“They’re not scared of lawyers, but they’re apprehensive to get lawyers at the beginning stages of their companies because there’s a mystery [around fees and costs],” he said.
“ . . . We kind of take the mystery out of legal services.”
‘Flip of a switch’
Anurag Patel, the co-founder and CEO of Helix Health, said the experience transformed his perspective on lawyers. In his team’s first meeting with Duvall and McAndrews, he had a light bulb moment, he said.
The co-chairs explained to his team that they frequently work with clients when things go wrong, but they were excited to work with the startup because it allowed them to lay the groundwork for warding off trouble later, he said.
“That was incredibly helpful, and it changed our entire thought process on what we wanted to do with this experience,” he said. “It really was a flip of a switch.”
Receiving coaching and counseling from Duvall and McAndrews was especially valuable for the company’s leaders, Patel said.
The firm helped the company to draw up high-level agreements and an electronic data policy. Patel said the connections the company formed with mentors also were helpful, and he encouraged other startups to apply to Startup Lab.
“At a bare minimum, they would have a great relationship with a new set of lawyers, and a great set of assets they’d build up in their legal portfolio,” he said.
Duvall and McAndrews are currently working with TravelHive, a web platform that allows travelers to collaborate in trip-planning. Company co-founders Jillian Carlile and Kim Naramore said they jumped at the opportunity to apply when they heard about the lab through Kansas City’s startup community.
Carlile said legal services are difficult and complicated to navigate, so they wanted to take advantage of the resource available to them. Naramore agreed.
“We knew we had a blind spot in that area and how important it was,” she said, adding that as a startup, funding for legal work is scarce.
Carlile said they are “over the moon” to take part in the lab.
“Almost every stage this early is so critical, and having this has helped us immensely being able to take this next step,” Naramore said.