When Nan Zhang decided to grow her company out of her alma mater, Johns Hopkins University, she knew to handle the science but not the business side.
Zhang is the CEO and founder of Vision Interchange, an online trading platform that lets people trade-in designer eyeglass frames. The site had a beta launch in November and has plans to go national. In order to do that, however, Zhang needed lawyers to incorporate her company, which could have cost thousands of dollars.
But as a member of FastForward, the incubator part of Johns Hopkins Technology Ventures, Zhang was able to set up her company using counsel from a top Baltimore firm – and it didn’t cost her a penny.
Over the past two years, FastForward has been partnering with four of the largest firms in Maryland – DLA Piper US LLP, Saul Ewing LLP, Whiteford Taylor & Preston LLP and Venable LLP – to offer startups a range of agreed-upon services described as “startup in a box,” including formation documents, nondisclosure agreements and consulting agreements.
“Costs are something all startups are conscientious of,” said Mark VanderZyl, operations manager at FastForward. “They work hard to realize the capital that they have, so we’re hoping to offset those costs at the early stages.”
Each firm has committed to 20 hours of pro bono work per company. That includes 15 hours of corporate legal work and five hours startups can use for other needs at their discretion.
In addition, the firms also provide office hours at the incubator every month to let startups come in and ask questions or bounce off ideas.
Since the partnership’s inception, 37 new companies have used the law firms pro bono services, VanderZyl said.
While some firms bring associates along to get more experience, all lawyers involved with FastForward are at partner level at their respective firms.
“If you put a dollar amount to the time they’re spending, it’s substantial,” VanderZyl said.
Investment in clients
For the lawyers who donate their time, it’s more an investment through service than money.
“This is how law firms invest in clients, not in cash but in services,” said Howard S. Schwartz, a partner and head of the corporate group at DLA Piper’s Baltimore office. “The best lawyers always think about how to give the right amount of services at the right time and at the right price.”
For Whiteford Taylor, the firm Zhang was paired with, that investment may just work out.
“Going into the future,” she said, “we absolutely plan to keep working with them and building that relationship. They feel like they’re an integral part of who we are at this point.”
Like the other three firms, Whiteford Taylor has worked with about eight startups through FastForward. The firm has done similar work with other local incubators.
“The companies don’t have an obligation to use our services, but our hope of course is that they will like the work we do and will want to continue using us,” said Howard R. Feldman, a partner at Whiteford Taylor.
That thought process has led to a wider trend in Maryland’s legal community, with firms offering fee structures to startups with the hope that an initial investment will lead to a long-term paying client.
Another FastForward startup, Neuraly Inc., worked with Shulman Rogers NEXT, a program from Potomac-based Shulman Rogers Gandal Pordy & Ecker P.A. that offers fixed pricing packages to startups and early-stage companies.
Other firms offer free initial discussions or fixed-fee consulting services for specific legal issues.
The firms involved in FastForward also provide similar support outside of the program. For example, Saul Ewing’s Resources, Access and Mentoring Program (RAMP) fulfills basic legal needs for entrepreneurs at various stages of building their business.
“If we are more active with a company at an earlier stage, we’re more likely to continue working with that company through its life cycle,” said Eric G. Orlinsky, partner and chairman of the firm’s private equity and venture capital practice.
Orlinsky, along with about eight attorneys from his firm, have worked with FastForward in various capacities since the pro bono program was introduced.
For Venable, its partnership with FastForward marks a longstanding relationship between the firm and Johns Hopkins.
“We appreciate and respect the important role that Hopkins plays as an institutional giant in town,” said Charles J. Morton Jr., partner and co-chair of the firm’s corporate practice group.
Venable’s lawyers also hope that if local lawyers help local startups, those businesses will stay in the area.
“This is at its best part of a virtuous cycle that is reinforcing,” said W. Bryan Rakes, a partner at the firm.