If I’m starting a company and don’t have much cash, can I give my lawyer equity instead of money?

It’s a smart question. You’ve probably heard stories—lawyers who take stock in startups, or firms that defer fees in exchange for equity. And it does happen. But that doesn’t mean it’s always available—or wise.

So here’s the real answer: yes, lawyers can sometimes accept equity—but only under very specific circumstances. And usually, it’s not the right choice for a one-off engagement.

Let me explain when it works, why it’s rare, and what I offer in my own practice.

Equity-for-Legal Services Is Rare—and Should Be

There’s nothing illegal about paying a lawyer in equity. In fact, Rule 1.8(a) of the ABA Model Rules of Professional Conduct allows lawyers to enter into business transactions with clients—including equity compensation—so long as the terms are fair, fully disclosed in writing, and the client gives informed, written consent.
(See ABA Model Rule 1.8(a))

But just because it’s allowed doesn’t mean it’s appropriate in most cases.

Equity arrangements introduce complexity. They can create conflicts of interest, raise valuation and tax questions, and change the lawyer’s incentives in ways that may not benefit the client. If the lawyer is supposed to be independent and dispassionate, owning a piece of the company can compromise that role.

That’s why most firms don’t do it—and why I rarely do either.

When Equity Can Work

There are situations where equity compensation makes sense. It typically happens at the very earliest stage of a startup—before incorporation, before funding, before revenue—when there’s truly no money to pay legal fees and a long-term relationship is expected.

In those cases, a lawyer might help incorporate the company or draft founder agreements in exchange for a small equity grant, often paired with a deferred-fee structure for later-stage work.

But this only makes sense when the lawyer is going to be there for the long haul. Think general counsel relationship, not one-time doc review. If the goal is to have a lawyer walk with the company from idea through growth, funding, and exit, then equity can be part of the relationship.

That’s how some large firms do it. They invest in cradle-to-IPO representation. They defer fees, take equity, and hope the client goes public. That’s a specific model—and not mine.

What I Offer

I don’t take equity for one-off transactions. If you’re hiring me to review a SAFE or draft a contractor agreement, that’s fee-for-service work. It’s priced fairly and transparently, and you retain full ownership and independence.

That said, I’ve worked with some clients over the course of many years. In rare cases—where the relationship is truly long-term and the client is serious about retaining me as outside counsel—I’m open to discussing hybrid arrangements that include deferred fees or equity grants.

But those are the exception, not the rule. And I’ll never ask for equity as a shortcut for fair compensation. If we do something like that, it will be structured carefully, disclosed fully, and offered only where it truly aligns with the client’s goals.

A Quick Scenario

Let’s say you’re founding a startup, you haven’t incorporated yet, and you need legal help to get off the ground. You’re not raising capital yet, and your team is working for equity. You plan to build this company full-time, and you want a lawyer to stick with you from formation through fundraising and beyond.

That’s the kind of situation where an equity-based legal relationship might make sense—if both sides are clear about expectations, scope, and long-term alignment.

But if you’re just trying to save money on a single agreement, it’s better—and cheaper in the long run—to pay a flat fee and keep the cap table clean.

Bottom Line

Yes, you can pay a lawyer in equity. But in most cases, you probably shouldn’t.

Equity is a long-term tool for long-term relationships. It’s not a replacement for a fair fee. And it’s certainly not something to toss around lightly in early-stage deals where clarity and simplicity matter most.

If you’re building a company and want to talk about how to structure legal services over time, I’m happy to have that conversation. And if you just need help reviewing a document or scoping a discrete project, I’ll tell you exactly what it costs—no equity required.

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