Many startups dream of making the millions and becoming the next big thing, but often face the reality of having to save money and cutting cost wherever they need to. Founders of startups have to also protect their own rights or potentially face getting ousted from their own company.
It is written by Ang Hui Xue, Analyst Intern in L'Atelier Asia, Shanghai Office
According to Chris Yeh’s, How to avoid getting fired from your own company, he suggests founders to plan defenses early and to get everything in writing, because if even “Steve Jobs can be forced out, so can you”. Furthermore, start-ups may have to protect themselves to prevent their employees from starting another company using their former employers’ ideas. This calls for the need of hiring a lawyer for the start-up to handle all legal issues at the start even though costs can surge to the thousands while they may not have that much money to spend.
Singapore startup Lawcanvas is attempting to redefine this traditional industry, as they are essentially a database that collates legal document templates and tailors them into the Singaporean context. It allows the small business to create legal documents quickly through interactive editing, allowing you to fill in documents using their editor and not needing to worry about where to put what when you are editing legal documents.
Lawcanvas can help the start up in many ways, and one of the most obvious points is that it saves money for the start-up. For the start-up that requires the right documents for hiring people or even one that protects their intellectual property through non-disclosure agreements, one option they could exercise is to find a lawyer to draft these documents. This could cost upwards of thousands of dollars, it may not seem much for a big business, but for a fledgling startup, this money could be well spent on other areas.
Another option the founders can consider is to source documents from similar companies overseas, and copy and paste the clauses and details that you think applies to your situation. And even then, the founder may still be unsure if they are doing the right thing and including the right clauses, after all legalese is almost another language. Lawcanvas co-founder Daniel Leong estimates that one document takes at least 5 hours to edit and modify it to the local context. For the founders who are already on a limited timeline to complete their own tasks, time spent on these administrative tasks could be spent on their business.
Through Lawcanvas, founders can source for the standard documents they need and save time and money required to draft the documents required for their businesses. It also provides easy explanations where they simplify law jargon into plain English so regular people can understand and helps businesses understand what they are really protecting in their contracts.
However, there has been some doubt as the information they provide infringes on the legal market. In a country like Singapore, where recent news about a “lawyer glut” and an oversupply of lawyers have emerged, lawyers may feel that this innovation will disrupt their markets or replace the need for them with machines, and it could very well threaten their jobs. But, on the other hand, if costs are reduced for start-ups, there could be more companies with the potential to grow into a larger business that will require more professional legal advice, one that goes above and beyond the scope of standard legal contracts that can be just “copy and pasted”. Hence, even though it may affect the lawyers that draft these standard contracts, in the long run, with startups being given more room to grow, there could be still plenty of business left for the legal market.
While the service is being provided for free right now, Lawcanvas is planning to offer premium features for a price. This price still cannot be compared with the money one has to shell out to hire a lawyer. With innovations like this, it lowers the barriers of entry to start a company and this lowered cost may be exactly what people need to start their own business, promoting more entrepreneurship and more innovations. Even though this is in a Singaporean context, there has been some chatter about regional expansion and we can only wait and see how this could perhaps redefine the legal landscape worldwide.