What's his name? I feel like he should be outed to the HN community so no one else uses him. I can recommend my lawyer if you need one, though he's based in the midwest, not SF.

A deal like this would up your risk by an order of magnitude compared to whatever legal services he can offer to lower your risks. The reason being was stated by others here that he'll shorten your runway and also have say over what you do as a company owner because he's a shareholder.

Keep in mind that legal agreements and compliance are just formalized ways of humans coming to an agreement to manage risks. Risks are not things that are actually going to happen, but most often have a very small chance of happening. Of those things that have a chance of happening, most won't actually kill your start up (though they could be expensive). If you haven't launched yet, your biggest risk is finding product-market fit, not legal compliance.

While I'm not at all advocating to break the law or be reckless in the area of legal requirements for your start up, keep in mind that what's more important is the quality (read: character) of the people you choose to work with, not the formality of legal agreements. This is most important with your first investor. If you need a lawyer to negotiate with your investor, this may not be the right partner, but I may be reading too much into that.

Your lawyer though sounds like a real piece of work...he's asking for 5% equity and a $1K/month retainer for legal services. The problem here is first, he's proven his 'off the cuff' business advice is useless because his $1K/month retainer is going to drain cash from your start up lowering the odds of long-term success, but he's asking for a 5% equity cut hoping to cash in on the long-term success of your company. Sorry, but this guy is a fin idiot.

The second problem is lawyers are hired to offer legal counsel, not business advice. I don't know what the laws are in this area, and I know many lawyers offer 'business advice' as an extra selling point to win clients, but offering business advice to a client who is paying you for legal advice and not clearly defining which is which seems like a good way to get yourself sued for malpractice. The odds of this actually happening may be small because most people who take bad business advice from lawyers would go out of business and then not have money to sue, but I can't see malpractice insurance companies liking the fact that lawyers do this. Maybe it's legal to do this, but it sure seems like the practice is muddying boundaries in a domain that specializes in setting limitations and boundaries, clarifying expectations, and crystalizing the unclear.

If your lawyer is mixing legal and business advice, I would take it as a sign that he's a bad lawyer as well. In my experience, this has proven to play itself out in real life many times.

I know I had a hard time figuring out what makes a good lawyer when I was first getting started, but here are a few things I figured out along the way:
-Obviously recommendations and awards for the firm, but only as one data point.
-He/she can offer up templates for just about every contract you listed above. If his firm doesn't have a standard one on hand, he can reach out to his network or recommend someone for you instead of charging you to write a new one. Obviously this is cheaper and will save you money.
-He/she refers you to others for knowledge outside of their area of expertise.
-The standard contracts the firm has on file have been proven to stand up in court. Also, the lawyer knows how the local courts will rule on situations not covered in their standard contracts.
-The lawyer is straight forward in his answers and doesn't pontificate on legal theory. This is a waste of your time and his, and what matters is if a judge is going to rule you owe someone $100,000, not legal theories.
-The lawyer doesn't try to sell you on extra services, most especially 'business advice' bs.
-The lawyer is more interested in building long term relationships, and shows it by undercharging you for the first few bills you receive from him. In the early stages of trying out any lawyer, keep a very close eye on the time he spends with you and audit his bills. I had one accountant try to charge me triple the time we actually spent with him. This holds true for any professional consultant you hire.

Good luck!