When Nikola Kostic decided to build brake technology that eliminates the wear-and-tear on commercial aircraft, he knew engineers and aviation contacts would be handy, but it quickly became obvious he’d need another kind of expertise: legal advice.
“People think entrepreneurs just jump in and you follow your dreams and you do whatever interests you, but no, you have to worry about the process, the incorporation and the legal requirements,” says the founder of Toronto’s Aeroflux Braking Systems.
For Mr. Kostic and Aeroflux, that expertise is coming from an unlikely person: second-year law student Emma Weiss.
She is part of a course the University of Toronto launched this year, pairing startups with law students in an effort to give the next generation of lawyers more experience and help budding companies access affordable legal services. U of T calls the arrangement an “externship.”
The 10 students admitted to the externship dedicate a few hours every week to working with their placement supervisors and startups, which include several from U of T’s Entrepreneurship Hatchery accelerator. In addition, the students receive 12 hours of in-class learning on laws prevalent to startups, professionalism and ethical responsibilities.
Because law students can’t give legal advice, their work is overseen and informed by lawyers at firms Norton Rose Fulbright Canada LLP, LaBarge Weinstein LLP, Torys LLP, Dentons Canada LLP, Baker McKenzie LLP, and Blake, Cassels & Graydon LLP.
Mr. Kostic says one of the first things Ms. Weiss assisted Aeroflux with was deciding whether to federally or provincially incorporate. She explained the difference and helped them weigh the pros and cons.
Ms. Weiss was interested in the externship because she had previously worked on a few projects with startups.
“This course seemed like an opportunity to get even more immersed,” she says. “If I can continue doing that rather than ... learning 19th-century cases, that’s to my benefit.
Sometimes, the startups have approached students with questions they had no idea how to answer, but having the oversight of a law firm gave Ms. Weiss insight into how to handle issues. The firm she worked with, Norton Rose Fulbright, also let her sit in on presentations about law and taught her about privacy policies and indemnity clauses.
“It’s cool to even get cc’d on their e-mails that go between them in the startup,” she says. “It’s just interesting to see how they operate and solve problems.”
Edward Iacobucci, U of T’s faculty of law dean who teaches the seminar portion of the class, says it’s challenging students such as Ms. Weiss to think about some of the first legal protections businesses need because many startups are founded in dorm rooms by people who are new to the business world.
Toronto is increasingly solidifying its status as a technology hub. Tech giants Amazon.com Inc., Uber Technologies Inc. and Shopify Inc. have all expanded their presence in the city in recent years, while the number of incubators and accelerators for early-stage companies in Toronto has also grown. Despite the widespread interest in startups, experts say such fledgling companies can always use more support.
Mr. Iacobucci has been determined to provide some of that support since he had a conversation with the university’s business school dean about its Creative Destruction Lab, a program that supports seed-stage science and technology companies.
“It dawned on me that these startups can also be looking for legal advice and maybe there’s also ways for students as lawyers to participate in this sort of startup,” Mr. Iacobucci says.
“Technology is changing the practice of law … and there’s also just great opportunities there.”
Mr. Iacobucci, a seasoned lawyer and the son of former Supreme Court of Canada Justice Frank Iacobucci, enlisted tech entrepreneur Jamie Shulman to help run the course. Mr. Shulman is a lawyer, but also co-founded automated document collaboration platform Hubdoc and online marketing company Sparkroom.
Mr. Iacobucci and Mr. Shulman immediately found support for the externship from law firms.
Paul Fitzgerald, a partner at Norton Rose Fulbright, said his firm was keen on participating because it’s an opportunity to connect in a new way with the next generation of law talent.
“When I went to law school we didn’t have these types of opportunities,” he recalls. “They always had these legal clinics where you provide landlord tenant advice or highway traffic court ... but there was never really any kind of business focus.”
Working with startups can be “complicated,” but if done right, everyone can benefit, he says.
“They require the full world of legal advice, just like every other business does, but they have a really hard time paying for it,” he says. “We’ve been trying for years to provide opportunities to startups, because eventually they may become paying clients and some of these things may be absolute home runs for the Canadian economy.”