It's not when, but how.

IT’S NOT WHEN TO ENGAGE COUNSEL THAT MATTERS, IT’S HOW YOU DEPLOY THEM.

Your investors charge you with the responsibility of using their capital well. Initially, your fund’s biggest expense will be legal. In this post I take you beyond the simple but misleading question of when. The more important question is how to deploy counsel.

The question of when to engage counsel is often framed as a timing issue. That is a misleading framing. Having been both counsel and client in fund formation, I’ve seen how timing is less important than calibration and substance — knowing how much and what type of legal input you need and when. Dialing in the right amount and type of legal advice yields better, faster, and more cost-effective outcomes for you and your investors.

Counsel as Strategist

From the moment you decide to launch a fund an initial meeting with counsel can inform and expedite everything that follows. In an hour’s time an experienced fund counsel can give high-level guidance on structure, economics, and relevant developments in the regulatory environment arising since your last fund. It’s a high level scouting of the terrain ahead. No sponsor wants to look like they’re building the plane while flying it.

Counsel as Architect

A clear, comprehensive term sheet or summary of terms is the secret sauce to effective deal execution. Experienced counsel will direct you through the development of a plain-English, reasonably detailed term sheet or summary of terms. The goal is to produce a document that captures your expectations and those of your likely or lead investor. It will also highlight issues that deserve more attention. Done well it will make the development of the offering documents as efficient as possible. Better to identify issues in a two page summary than weeding them out of a 190 page set of private placement memorandum, partnership agreement, and subscription package.

In this phase, the cost is modest; the savings later can be dramatic.

Counsel as Builder

Once the business terms are clear, the lawyer’s role shifts. Now counsel becomes the builder by preparing the necessary offering documents, drafting, and coordinating. At this stage, efficiency is driven by the term sheet or summary of terms. comes from clarity: the better defined the deal, the less reinvention (and re-drafting) required.

The Real Efficiency

Efficiency isn’t about how late you can wait to call your lawyer. It’s about deploying legal

resources proportionate to risk and readiness. The smart client and the smart lawyer

know how to dial engagement up or down as the project evolves.

The best sponsors treat legal engagement the way they treat capital: deployed deliberately, monitored constantly, and always proportional to risk.