An early-stage founder recently told me that he got a legal bill that exceeded $100,000 for work on two legal matters. Both matters were standard, but it was the first time the founder had navigated them. He needed experienced lawyers to help him. He enlisted a top-tier firm with deep early-stage experience without realizing the cost would be that high.
While bootstrapping my company, I quickly learned that I couldn’t afford well-known service providers. I also couldn’t afford to get work done by inexperienced service providers. The downside to mistakes in things like legal work is high (as I found out the hard way). I had to try to get the highest-quality providers I could while staying within my bootstrapped budget.
It occurred to me that top-tier service providers are a collection of people. The knowledge and experience the top-tier firms are known for reside within the people doing the work. If I could find someone who used to work for a top-tier provider, I could likely get high-caliber expertise for significantly less.
In a specific legal situation, I pinpointed a firm known for handling the type of matter I had. I then looked for lawyers who had worked at that firm and now had their own practices (or were part of a virtual practice). I figured that if they’d left recently—within the last few years—and started their practice, they were hungry, entrepreneurial-minded practitioners. A partnership could be a win-win for both of us. The strategy worked. I found a great lawyer who’d left that firm a year earlier. He started a solo practice and was looking for new clients. He got a new client and I got a rate I could digest because his overhead was significantly lower than that of his previous big law firm. With a little bit of digging and hustling, I found a diamond in the rough. He was less known, but I got the caliber of work I needed in a timely manner without breaking the bank. And I supported another founder. It was a win-win.
I now think of hiring service providers for early-stage companies or small projects as being just like hiring team members. Start with a budget and try to find the best provider with the desired experience (or capabilities) within the budget. This often means identifying people with relevant expertise who don’t have the packaging of elite firms. It’s more work, but it’s worth it when resources are limited. It’s also a great way to build relationships with great service providers early on.