Law firm helps entrepreneurs use its ‘bench strength’
Like oil and water or cats and dogs, entrepreneurs and lawyers have always made for awkward combinations. Action-oriented business owners tend to have an instinctive distrust of papershuffling process experts who always get paid, no matter the result.
Can the culture clash between them be overcome? The law firm of Fasken Martineau is betting on it. Two years ago, the firm’s Toronto office named entrepreneur and angel investor Jeff Dennis as probably Canada’s first entrepreneur in residence at a legal firm. His job: build bridges to the local entrepreneur community — especially to early-stage tech companies — and figure out how Fasken’s lawyers can better serve cash-starved startups.
Dennis has both an MBA and law degree and has run his family’s business and his own startups in finance, real estate and solar energy. He’s also an angel investor and co-author of a 2002 book on his adventures in business,
Lessons from the Edge.
On a strict cost-benefit basis, there’s been no official calculation yet to prove his efforts are making money. But his appointment has been a boon for both the firm and many new companies. Fasken wins by meeting lots of prospects through the events it hosts or sponsors, such as the TiEQuest business plan competition or the Tiger 21 peer group for highnet-worth investors.
Business owners win through the consultations and creative solutions Dennis provides, or through Fasken’s new (and heavily discounted) startup program. It allows startups to affordably solve common legal challenges, such as constitutional documents and trademark registrations, while getting to know the firm and its specialists.
The entrepreneur-in-residence job came at the right time for Dennis. Having had his fill of running companies, he spent a few years advising entrepreneurs. But he found it lonely: “I missed people, interaction, whiteboards and flip charts.” Being at Fasken offers all that and more: “This has given me a lot of resources I wouldn’t have otherwise had. It extends what I can do to help entrepreneurs.”
A law-school friend and Fasken partner, Craig Brown, told Dennis the firm was looking for a champion to reach out to innovative small businesses. “I put together a little business plan for the powers that be,” Dennis says, “and they agreed to give it a shot.”
Like a good startup entrepreneur, he designed a compensation plan that would give him a minimum base salary, but upside potential through performance-based incentives: “I wanted to do it right, not fast.”
Dennis has a twofold mandate: to help entrepreneurs take advantage of legal services in more cost-effective ways and help lawyers better understand small business clients. For example, recently a client came to Fasken for help setting up a venture fund. The firm estimated the legal spadework at $200,000.
For a startup that wasn’t sure its strategy would pan out, that investment was out of the question. “We came up with a solution that let them do it for $15,000.” That helped the client create a “minimum viable product” to test its theories before going all in.
Dennis contends there’s much more room for innovation and customization in legal services. “Most legal advice is pretty standardized, term sheets and partnership agreements,” he says. “The value I add is understanding business. I know what our clients are going through because I’ve lived that life for 25 years.”
As an advocate for small business inside a huge law firm, he enjoys helping entrepreneurs access Fasken’s “bench strength.”
“As a large law firm we have specializations that run really deep. We’re building a team that can help small companies, whether they’re into biotech, medical devices, Bitcoin, cleantech or public-private partnerships.”
Such depth doesn’t come cheap, but Dennis hopes to convince his colleagues that investing in early-stage relationships will pay off. “My job is to build a clientele where many of them will hit it out of the park.”
A Fasken M&A team recently helped one young company pull off an ambitious acquisition. “We invested our time and energy and advice and built some loyalty,” Dennis says. But the firm got to know its client and has faith in its future, “so we’re confident that we’ll reap that benefit as we go forward.”
The most tangible product of Dennis’s tenure is Fasken’s startup program, now offered in Toronto and Montreal.
For about $2,000 a year, companies get help with basic legal issues — including some they don’t even know they have, such as who really owns your company’s IP? — and two hours a month of face-to-face consultation, with either Dennis or another Fasken lawyer.
Dennis says the program, just over a year old, has attracted more than 50 participants.
Brown, who championed Dennis’s appointment, admits some old-school partners still think “fishing around here is a waste of time.” But in the legal profession, “everyone’s scrambling for new business today. And this is a great place to find new business.”