When do law firms get equity in IPO companies?
Some of the law firms you are considering may want stock or options as part of their fee or want to invest in an early or late round with the VCs. For an overview of equity for counsel, see IPO Vital Sign #492. See IPO Vital Signs #801 for all examples of such equity participations. Compare your IPO law firm’s fee estimates with fees charged by them for other IPO clients. Check out IPO Vital Signs #398 and #647 for legal fees for each IPO over the years, and then analyze the fees in terms of SIC, financial profile, and lead manager. Evaluate your individual IPO lawyers. Your law firm may be experienced, but how about the lawyers assigned to your IPO? Compare the long-term record with recent experience for each lawyer that will represent your interests when your company goes public, as IPO issuer’s lawyer (IPO Vital Sign #165); as IPO underwriters’ lawyer; and on a combined basis (IPO Vital Sign #161). “Your IPO Law Firm is Your Key Adviser and Advocate. It’s No Time for OJT.” Is there
