Setting up legal in a start-up: 10 things you should know

In November 2017, I became the first lawyer to join Pusher, a London based tech start-up building delightful APIs for app developers. A few years before that, I left a private practice law firm where I was a junior litigation Associate to join FutureLearn, a London based edtech startup. I’ve never looked back.

I didn’t know quite what to expect, but being the first legal hire has been fun, exciting, challenging and, at times, a bit scary. Similarly, if you’re a business looking to make your first legal hire, you may not be entirely sure where to start, or what to expect from the position.

Companies are unique, so everyone’s experiences will differ. As a starting point, here are the 10 things I’ve learned (so far!):

1. There will be resistance — it’s not personal.

In a startup, the first couple of years are about surviving and becoming sustainable so everything moves fast and people don’t get too hung up on processes or legal stuff. Your arrival is a potential threat to that. It signals what could be a new era of risk-averse corporate rubbish and red tape.

It is up to you to help people get comfortable with your presence and to let them know that you aren’t there to block progress and creativity. You’re there to make sure someone is keeping an eye on risk and to suggest modifications, ensuring that a creative idea doesn’t put anyone’s job (or the company) in jeopardy. Very rarely will a proposal be so outlandish that you cannot find a way to make it work, so be pragmatic — “Yes, if..” is a much better response than “No, because..”.

If you take a genuine interest in how your presence affects people in the company and you are flexible, empathetic and patient with your approach, any resistance will dissipate surprisingly quickly. Before you know it, people will be excited you’re there and come to you for input on all sorts of things.

2. You won’t know everything, and that’s okay. Trust, but verify.

As the first or only lawyer, everything falls within your remit. From commercial contracts, to employment / HR issues, to lease contracts for a new office or coffee machine, to IP and everything in between. Commercial contract reviews will be routine for most people, but on other things you may not have a clue what the answer is and that’s okay. The approach should always be to trust your instincts, but verify them.

Speed is important. You usually won’t have time to spend a day researching an issue fully before responding and often there’s nobody else you can ask. To be really valuable to the business you need to be able to provide a reliable response and you need to do it quickly: “I am pretty sure [whatever] is the case — but I’ll go away and double check and shout if I was wrong. In the meantime, I suggest you do [the thing]”.

If you’re really at a loss (and everyone is at times, no matter how much experience you have) and don’t have an initial response, don’t bullshit. People don’t want to hear a bullshit answer, so it is perfectly fine to say that you don’t know right now, but you’ll definitely find out (provided that isn’t your response to everything…).

Experience and the ability to give an intuitive response on the spot are invaluable, but what differentiates a good in-house counsel from a great one, is access to a broad network of fellow lawyers/professionals with different specialisms that you can drop a line anytime to give you a quick and candid view on a pressing issue. That way, even if it requires more research or input from outside counsel*, you can at least flag absolute no-go’s early on and help modify the approach or put a halt to something.

*Using outside counsel has its place, but should not be the default position as it is expensive (most companies only hire in-house when outside counsel bills justify the hire) and can cause delay, so you’ll want to be sure it really is necessary, e.g. where it is an area of significant financial risk, a niche issue which your own research is unlikely to provide satisfactory results to, such as taxation, or where you want to be able to rely on it from a liability perspective.

3. People will need help understanding what you do and you’ll need help understanding what other people do.

A couple of weeks into the job at Pusher, I was having a drink after work and one of the Senior Engineers said to me, “so, you just.. do our contracts for things, right?”. I looked at them blankly for a second before realising it was entirely my fault that they had no idea what I do. How many others had no idea what I was doing?

If you’ve never worked in tech or even in-house before, it will probably be your first time working closely with non-lawyers, let alone Engineers, Product Managers and Sales and Marketing people. Odds are, you’ll need to learn what they do, in the same way that they’ll be trying to get to grips with what your purpose is. Without a firm understanding of, for example, what an Engineer in the Cloud Infrastructure team does, you won’t know what to consult them on, where to find information you need, or how to be proactive about helping them. And quite aside from that, you’re going to be a team of one for a little while — getting to know people doesn’t hurt!

To be effective legal counsel, you’ll want people to know what to involve legal in, as well as when and how. If they don’t, you won’t know about anything that happens unless you hover over everyone all of the time in an attempt to catch legal matters. That won’t make you very popular, nor will you get much done. So it’s important to make sure everyone in the business understands your role and what you can help with. It is your job to make sure that happens.

For example, when I joined Pusher, I spent my first few weeks sitting in different areas observing and speaking to different people to understand how the teams interact and who does what. It’s amazing what contextual knowledge you’ll pick up by osmosis (/eavesdropping). It will not only make you a better legal counsel, but you’ll also get to know people, which will go a long way in addressing any potential resistance.

4. You will learn a lot and you’ll have to do it fast.

The calibre of your fellow employees will be extraordinary. Engineers will quite literally speak a language you (probably) don’t and your sales/marketing colleagues will be hungry and know the product inside out. It’s important to find ways of making yourself knowledgeable as fast as you can, to make sure your advice is meaningful to the business. It is also important to remember that you will never know everything, but as long as you keep learning, you’ll be fine.

If you’re coming from private practice, you will be used to having people within the same specialism to learn from. Those people also know where your knowledge gaps are and how to help you bridge them. As first/sole counsel, you won’t have that same ecosystem and people won’t have a clue what you don’t know (and neither will you), so you’ll need to find a way of working out what you need to know and then learning it. Sounds easy!

As a bare minimum, you’ll need to understand the business itself, but to be a great in-house counsel, you need to understand the technical side of the business too. To do that, you’ll need to spend time with Product Managers and with the Engineers themselves. You’ll quickly learn how you can be most useful to them and it will also give you the best possible technical understanding, even if it takes an engineer, a whiteboard and several stick figure diagrams to help get you there (thanks Hamilton…!). If your company does talks, demos, stand-ups, etc., try and attend as many as you can early on. It will be invaluable later on, and also shows a real willingness to learn about the company while building trust. Most importantly, don’t be afraid to ask-all-the-questions in the first few weeks while people are forgiving about your lack of knowledge!

It also doesn’t hurt to learn to do a bit of basic coding, even if only for the terminology. Most startups have a code club, but if not, Codeacademy is a great place to start.

5. It isn’t possible to sit on the fence.

In private practice, it’s not unusual for advice to be limited to the legal risks only, and neither provide a view on commercial matters affected by those issues, nor suggest a course of action. That is usually the correct approach for a number of reasons, not least that external counsel often lacks the business context to make meaningful suggestions. In-house, you have complete access to information and the onus is on you to get the context you need to make meaningful suggestions — so get it, and make them. The executive might not always agree with your commercial take on it, but you should still give it unless told otherwise.

Pusher’s culture is very execution driven, so there is an expectation that if I’m asked for advice, I should provide actionable options or suggest concrete solutions to a problem. It is not expected that I determine the outcome, but it is expected that I use the information I have access to, together with my legal expertise, to give the business a balanced set of options, so that they can make the most informed decision possible. It would be entirely unacceptable for me to identify a problem, and send the executive team an email saying “Hi all. I’ve identified this issue. Plop. Best.” There is just no space for sitting on the fence.

6. There is no place for ego.

When you do things right, people won’t be sure you’ve done anything at all.

This speaks for itself and is applicable across the organisation, not just legal. You’ll be part of something exciting that is much bigger than any individual contributor and it will not be the hierarchical private practice structure that you know and that ego thrives on. Be ambitious, but do make a conscious effort to detach your ego from your tasks and responsibilities.

In a startup, there may not yet be structured performance reviews or a formal feedback loop. This coupled with a focus on speed and a general expectation of staff to be competent and hands-on, you’ll learn to value a lack of fires burning just as much as you would some good old-fashioned praise. Everyone deserves a pat on the back from time to time, but in this job, silence tends to mean you’re doing something right, too. Take comfort in that.

7. You will still work hard.

Going in-house, especially to a tech startup, isn’t going to mean you stroll in at midday and swan home at 5pm.

While it’s a more relaxed environment than most private practice firms, you’ll still work hard. However, if you’re producing great output and people don’t feel you’re absent or inaccessible, it is generally possible to have a very wide degree of flexibility in the way you choose to work.

At Pusher, I tend to work from home a day or so a week. In an open plan office with music playing and a general buzz, it can be hard to concentrate for long stints. In a collaborative environment like Pusher, folks will also frequently come ask you a quick question at your desk, or while you’re making tea, and that will sometimes interrupt your flow a bit. That just means it is particularly important to balance your work schedule and your environment, so I now make sure that heavy tasks, big doc reviews or strategic work is done primarily on days I work from home.

It was an adjustment from the quiet of private practice office space, but once I found my rhythm, the slightly chaotic and at times noisy environment of the startup office became something I now look forward to going back to after a day at home.

8. There is a ton of responsibility, but you won’t be on your own.

It’s easy to assume that as sole counsel, the world will rest on your shoulders. It won’t. Yes, you’ll be under pressure to make the right call, but in many situations, your input will not determine the outcome and that is exactly how it should be. Your role is strategic, so don’t be afraid to have an opinion and speak up — but don’t be offended if the executive team go another way.

In an effective startup, there will be clear decision-making frameworks, designed to deal with the healthy tension between the legal risks and opportunities you identify and the business’ ambitions and appetite for risk. At Pusher, this functions very well, partly due to a continued effort by the executive team to steer clear of decisions-by-committee and in part because of a no bullshit culture that allows us to have candid conversations that get to the heart of a problem without wasting time or involving too many people or politics.

Even though the onus is on you to look out for risks and opportunities, the job of legal in this context is not to enforce the rules with an iron fist or spout black letter law. Nor should you take it personally if the executive team chooses to ignore some, or all of your view on a matter. That stifles the business’ ability to function as a commercial entity and is often counter-cultural too. There is just no room for ego.

Instead your value lies in supporting the business by advising decision makers on legal risks and mitigation strategies. Take a view on what’s really worth insisting on, so they can weigh up the competing factors and ultimately work out what is best for the business. The latter is their specialism. If you cultivate the “Yes, if…” attitude early on, people will learn to trust your judgment when you do occasionally say “We just can’t quite do that..”.

At Pusher, I am fortunate to work with some very smart people, so I am able to trust the executive team to make the best possible decision for the business, while remaining within the boundaries of the law. If you can’t trust your executive team to do that, well that’s a different story…

9. Get your hands dirty.

When you start interviewing for legal positions in startups, you’ll be asked, “What kind of work do you expect you will be doing?” or “How comfortable are you giving high-level strategic advice one day, and doing a basic document review the next?”. In a startup, everyone needs to be comfortable with getting their hands dirty — nobody is ‘above’ any task.

In private practice, I had a secretary. That meant I never had to print or scan anything myself; letters would magically get printed, put into envelopes, franked and sent out. There were trainees to help ‘take in’ manuscript markups on contract reviews and admin tasks were just taken care of by magic. In a startup, you are the magic. Depending on the size of the organisation when you join, it is perfectly feasible that not only will you do all your own printing, scanning, filing etc, but you could also be the one picking up stamps, standing in line at the post office, or popping round the corner to buy milk for tea if you run out.

It’s important to strike a balance between engaging in ‘unproductive tasks’ or not leveraging your time properly, and your willingness to get your hands dirty. Regardless of the size of the company, it’s always worth being humble and remembering that you’re all working towards the same goal and it is a team effort. And sometimes, you just have to do the thing.

10. Getting to grips with the “known knowns”, “the known unknowns,” and the “unknown unknowns” is the most important thing you’ll do.

That’s actually stolen from Donald Rumsfeld. But he makes a good point. The point is, that there are things we know that we know. For example, I know that being a lawyer is dead exciting. We also know that there are known unknowns, which are the things we know that we do not know. For example, I know that I do not know how to code. But there are also unknown unknowns, which is the same as saying that we do not know what we do not know.

It is the final category of knowledge that tends to be most important to the job of in-house counsel. Your job is to proactively protect the ecosystem within the business and to make sure your colleagues know when to escalate things to you for legal input. You have to make sure you know what people know, then identify and actively plugs gaps in knowledge. For example, explaining to sales folks that you can draft mechanics to make pretty much any commercial arrangement they agree to work, as long as they’re not agreeing to alter the risk profile (i.e. indemnity wording) will give them a much bigger degree of freedom to negotiate the best deal they can.

The only way to deal with the unknown unknowns, is to encourage people to come to you so you can make that unknown a known. I do that by providing a general level of education on legal risks to the business as matters arise and to encourage a better-safe-than-sorry attitude in people that is rewarded with the quick and painless “Yes go ahead”, “Yes, if..”, or “Yes, you could even go a step further..” approach, wherever possible. Over time, the unknown unknowns should decrease in number, while the known knowns and known unknowns become more numerous — and they’re a lot easier to manage!

….. So should you make the leap?

The startup world can be scrappy and chaotic. People miss meetings, stuff is never where you left it and there is probably no process for the thing you’re trying to do. Some days you’ll still marvel at the fact that meeting rooms are named after the games consoles in them. Oh, and that thing that person just suggested — well, that is completely mad; why would I want my contracts to be written in WingDings?

Then you’ll have an amazing conversation with one of your colleagues, learn something you’d never even thought about, lead on a round of fundraising, or someone will put your favourite song on the office stereo, help you out with something that totally isn’t their job and you’ll remember that this is why you came to work in a startup.

If you’re hiring..
If the description of where a legal counsel can really add value strikes a chord and you think there’s a gap in your company for that type of person, it’s probably time hire. Use your network and speak to lawyers at other startups about what they do, and if possible, run a job spec past them to give you the best possible chance of securing a great legal counsel. Whatever you do, take your time to find the right person for your business. Remember: that might not always be the most experienced or technical lawyer..!

If you’re thinking about making the move…
Going in-house as a first/sole legal counsel to a startup definitely isn’t for everyone. However, if you’ve read this article and you‘ve gotten to this paragraph and you’re excited by what I’ve said, then odds are, you’ll thrive.

And once you get there: relax, give in to the madness, and you’ll love every second of it.