By ELLEN READ
Innovative emerging companies may be able to save thousands in legal fees thanks to law firm Simpson Grierson.
Its Equifee (equity for fee) scheme, believed to be the first of its kind in New Zealand, allows new economy start-up companies to pay for a portion of their legal fees in equity.
"Legal fees for emerging companies, particularly those that are funding high-growth strategies, can be a huge drain on capital," said Simpson Grierson partner Andrew Lewis.
"Under Equifee, up to 60 per cent of legal fees can be met by providing shares in the company, instead of requiring cash."
Mr Lewis, who heads the firm's venture capital group, said it did not want to be involved in the governance of the companies or take control of them. "That's not our business."
The shares would be held in a Simpson Grierson trustee company and would need to have short- to medium-term exit opportunities.
"We are focusing on emerging New Zealand companies with strong growth prospects," he said. "We firmly believe that knowledge-based business will be a vital component of New Zealand's economic future. We want to be part of that."
Mr Lewis said the law firm had been in touch with business incubators and venture capitalists and received positive feedback.
It has been suggested that other service providers, such as accountants or engineers, should also offer the service.
Equifee is available to clients committing to legal service with a minimum value of $20,000 and who meet the firm's criteria, which include high growth prospects, a sustainable competitive advantage and reliable principals.
Mr Lewis said Simpson Grierson would generally be interested in companies with a technology focus.
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Lawyers offer way to keep fees down
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