Starting a startup these days is cheap with free software tools, $7 domain names, and robust web hosting for less than $20 a month. But one thing that hasn't changed: lawyer fees that cost hundreds of dollars per hour.

But now there's a startup for that problem called LawPivot, that promises to get startups cheaper legal advice and hook them up with good legal advisers from the outset, without emptying their bank accounts.

The problem of expensive startup legal fees came into the spotlight this week. Prominent venture capitalist Fred Wilson issued a challenge to startup lawyers to find a way to lower their fees dramatically, after a company he was investing in got a $17,000 legal bill – even though the investment used standard documents..

That's where LawPivot, funded in part by Google Ventures, comes in, according to co-founder Nitin Gupta, who called Wilson a "true thought leader."

"He recognizes that disruption needs to be had in legal industry," Gupta said. "We want to make it fair for companies and lawyers. We feel startups don't need to pay $500 an hour to meet their legal needs."

LawPivot's solution is to create a Q&A site where startups can ask legal questions confidentially and then get recommended lawyers to answer the question, which can lead to the former hiring the latter.

While California-based startups can now ask three free questions a month, LawPivot will soon be charging companies $80 for each question. For lawyers, the benefit is being able to land new clients for themselves or their firms, and to build a reputation – though they don't get paid to answer a question.

Currently, many startups simply rely on a recommendation from a friend or go with expensive counsel recommended by investors. With LawPivot, startups can see lawyer profiles, and hopefully be able to choose from a few lawyers after getting advice from each.

Just as important, the site aims to get startups to deal with their legal issues early on, rather than putting them off because getting advice is difficult and expensive.

Gupta, a former tech lawyer, says legal procrastination isn't uncommon.

"A lot of companies are trying to avoid legal issues because talking to lawyers is a headache," Gupta said. "I saw that as a litigator, and it hurt startups because they had neglected intellectual property issues and incorporation problems."

Some lawyers have already taken to the model and are answering questions on public sites like LinkedIn and Q&A startup Quora, in hopes of drumming up business.

LawPivot, by contrast, is more closed. Companies can ask questions, choose from a list of suggested lawyers that's based on speciality, and lawyers then answer the questions privately. The attorneys thus build up a profile on the site, which hopefully will lead companies to choose them for their legal advice.

Companies, on average, get three answers to their questions. However, the site is currently limited to California-based companies and lawyers, each of which are vetted before being allowed to join the site.

LawPivot's CEO and co-founder Jay Mandal was Apple's former top lawyer for mergers and acquisitions. Even the firm's VP of engineering is a former lawyer (who also holds an M.S. in Computer Science from Stanford).

The company wants to focus on making its recommendations better, and is publishing startup advice on common questions on its blog, including advice from startup icon Guy Kawasaki.

But even now this may be the best deal anyone has ever gotten from a lawyer. Especially compared to that $17,000 Fred Wilson blogged about.

"We want to make it fair for startups and lawyers," Gupta said. "It" is going to change, and that's why we are super-excited about the opportunity."

Photo: Lawyers Club, University of Michigan. (Harald Groven/Flickr)

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