[Study] Legal needs of start-ups incubated at Euratechnologies - Innovation
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[STUDY] LEGAL NEEDS OF START-UPS INCUBATED AT EURATECHNOLOGIES
The EDHEC Augmented Law Institute publishes the results of a study to identify the legal needs of early stage start-ups incubated at EuraTechnologies, to understand how these needs are addressed and to identify whether the current offer from legal and business services professionals adequately meets these needs.
This survey was conducted by students of the LLM. Law & Tax Management programme [link blank page to LLM master programme] under the direction of Christophe Roquilly, Director of the EDHEC Augmented Law Institute, with 93 young start-ups or those in the process of being created and integrated into the Lille EuraTechnologies start-up incubator and accelerator. Most of them cover the sectors of "FinTech /AssurTech / LegalTech / Cyber Security" and "RetailTech / Connected Commerce".
Here are some figures and conclusions to be retained from this study.
A LACK OF INFORMATION AND/OR CLARITY
THERE IS A REAL LACK OF INFORMATION AND/OR CLARITY ON THE LEGAL PROCEDURES TO BE FOLLOWED IN THE DIFFERENT STAGES OF CREATING A START-UP.
The study reveals a low level of legal awareness among incubated start-ups.
« Do you consider that there is a lack of information or clarity about the legal procedures to be followed in the different stages of creating a start-up? »
MANY LEGAL ISSUES TO FACE
HOWEVER, START-UPS ARE CONFRONTED WITH NUMEROUS LEGAL ISSUES FROM THE MOMENT THEY ARE CREATED AND THROUGHOUT THEIR EXISTENCE.
RECRUITMENT VERSUS OUTSOURCING
TO DEAL WITH THESE ISSUES, ONLY 19% OF START-UPS HAVE A LAWYER ON STAFF.
START-UPS ALSO SAY THEY ARE LIKELY TO CALL ON EXPERTS FROM OUTSIDE THEIR COMPANY TO DEAL WITH EACH OF THE ISSUES THEY ENCOUNTER.START-UPS ALSO SAY THEY ARE LIKELY TO CALL ON EXPERTS FROM OUTSIDE THEIR COMPANY TO DEAL WITH EACH OF THE ISSUES THEY ENCOUNTER.
Overall, start-up founders would naturally turn to lawyers for matters that are eminently legal and/or may have repercussions on the company's sustainability, such as drafting statutes and agreements (for 53% of start-ups created, 55% of start-ups in the process of being created), drafting terms and conditions/guidelines (for 58% of start-ups created, 65% of start-ups in the process of being created), and GDPR compliance (for 37% of start-ups created, 33% of start-ups in process of being created).
« Who might you turn to if you encounter difficulties in drafting and filing your statutes? »
Secondly, the chartered accountant would appear to be the preferred contact for financial matters such as the choice of tax regime/tax declaration (for 81% of start-ups created, 87% of start-ups in the process of being created) or the financing of the company, fund-raising (for 35% of start-ups created, 32% of start-ups in the process of being created), but he or she would also be called upon as a global advisor, involved in HR issues (for 50% of start-ups created, 39% of start-ups in the process of being created)
« Who would you be likely to turn to if you encountered difficulties regarding hiring / firing? »
Start-ups would be inclined to entrust the registration of trademarks, designs, models or patents to intellectual property consultancies (for 34% of start-ups created, 55% of start-ups in the process of being created)
LegalTech seems to be attracting more and more entrepreneurs, but for the time being few would put their trust in them for their legal issues (drafting of GTCs/CGVs in particular) (for 10% of start-ups created, 9% of start-ups being created).
It is estimated that 15% of issues would not be managed at all internally or delegated to a specialist: this rate rises to 7% for structures already created, which can be explained by the fact that the entrepreneur is more aware of the various issues once they have encountered them.
« Who would you be likely to turn to if you encountered difficulties regarding the registration of a trademark/drawing/model/patent? »
A SERVICE OFFER TO BE DEVELOPED
HOWEVER, THE CURRENT SERVICE OFFER IS NOT ADAPTED TO THE SPECIFICITY AND RESOURCES OF START-UPS.
"Start-ups are definitely not the ideal clients for law firms" comments a start-up founder
THERE IS THEREFORE AN OFFER TO BE DEVELOPED FOR LEGAL AND BUSINESS SERVICES PROFESSIONALS
THERE IS THEREFORE AN OFFER TO BE DEVELOPED FOR LEGAL AND BUSINESS SERVICES PROFESSIONALS
Start-ups do not have the right legal skills and training. They face complex issues with little time and resources to allocate.
Despite a still moderate intention to use these solutions, the study highlights a "growing use of legaltech" which facilitates "understanding and access to previously inaccessible legal services" and offers "flexibility at reduced cost".
CONSULT THE RESULTS OF THIS STUDY
