Legal Services for Startups: A Market Study on Legal Costs and Needs of Startups
Confronted with the lack of transparency on the legal market, roughly 50% of SMEs try to solve legal problems on their own, without being aware of the negative consequences they are likely to face in the future.
To get the idea of the addressable market for legal services for startups, let’s look at those figures:
- On a global scale, there are 31.8 million SMEs
- 1/3 have legal problems every year
- 90% of SMEs lack internal legal services supplier
This being said, business law, or legal services for startups and SMEs, presents a significantly underserved market niche for lawyers.
Legal needs of startups
Legal needs of early stage startups can be centered around 5 main groups:
- Corporate and contracts (Company Formation, Shareholders Agreement, NDAs, Terms and Conditions, Term Sheets, Seed Funding, Employee Stock Ownership)
- Data Protection (Privacy Protection, GDPR Compliance)
- Intellectual Property (Trademark Registration, Patent Protection, Copyright License Agreement)
- Taxation (Employee Compensation, Tax Compliance)
- Employment (Employment Contracts, Immigration)
Legal costs of startups
- Legal services are not only expensive for newly founded companies, but their total cost is often unpredictable
- Legal problems cost SMEs on average $8,700 (per problem)
- Global legal services industry reported $593.4 billion in revenue with the US covering 48.8% of the market (2015)
- In large law firms, 25% of the rate charged goes to the lawyer who did the transaction. Of the remaining 75%, half is used to cover overhead costs (such as the office and salaries of assistants) and the other half to pay the equity package of the partners
It’s important to note that many startups work with more than one single legal provider, with many turning to firms specializing in areas like immigration, employment law, IP, or others working with more than one “big” law firm.
At Enloya, we believe that the market is ready for a disruprive solution that will allow startups have more leverage over their legal matters, demand better support from law firms and more transparent pricing, and for lawyers – greater access to tools that make legal procurement easy and frictionless.
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How can Enloya digitalize the legal market?
Enloya is a global legal marketplace specialized in startups where entrepreneurs can purchase any type of legal service or product that is relevant to them, from registering a trademark to putting their paperwork together for a funding round.
The lawyers in our platform have been hand-vetted for quality, speed, and affordability.
Enloya platform has been carefully designed having in mind what startups really need and the fast pace at which they need to move. We make it easier for growing businesses to find, compare and purchase legal services at predictable prices and do things right from the beginning.
In parallel, Enloya provides lawyers with a SaaS solution to help them operate their legal business smoother than ever before, making invoicing, billing, and project management a breeze. Furthermore, through Enloya, lawyers can find other colleagues and auxiliary legal service suppliers with whom to collaborate.
Enloya builds upon goal 8:3 of the UN Sustainable Development Goals as it strives to support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises.
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Are you an entrepreneur, a part of a startup team or a small / medium business? Stay in touch with us to see how Enloya can help your company.
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“Legal Services for Startups – Costs and Needs”