Fridges full of beer, cool people being hired, the product roadmap becoming reality: when a startup moves to high growth it’s a thrilling time for everyone at the office, right? But while the business has its priorities and chases them down aggressively, it’s a delicate time for legal: often the last thing founders want is to increase headcount in a function they probably try to avoid. Legal is a cost centre. Legal is boring. Legal says no.
You know legal isn’t going to set the world alight for most people, but you also know how sorely needed good legal counsel can be for businesses of this stage, and you know that high growth brings exposure to new risks – and quickly. The last thing the company needs at this crucial time is to be floored by a legal risk it wasn’t equipped for, or worse, to be sunk below the waterline now by a risk that won’t present until much later – when it might be too far gone to fix.
In our experience, legal counsel typically arrive at VC-backed tech businesses sometime post-series B fundraising. This actually often happens even later - we’ve seen as late as series D. This is an unforced error. The problems that require in-house legal expertise to unpick can be horrendous by the growth stage, and the consequent time it takes to build the right processes is significant.
At the earliest opportunity, as legal counsel you need to line up the growth of the legal function with the growth of the business. And this is made even more complex by the varying profiles of the lawyers needed at different stages. Often the first couple of legal counsel might be generalists, with the agility to deal with a range of issues as they arise. Down the line scale-up businesses might need to specialise the team more with specific skillsets: dealing with employment disputes, corporate transactions, or protecting IP.
Wherever the team goes, it is critical to build a relationship between legal and the business that works in harmony, helping the company to achieve its growth objectives and adding commercial value. This is hard. So as an in-house lawyer at a scaling business, how do you do it?
1. The business is your internal client: start with their objectives, not yours. With the ferocious pace of startups and the continuous requirements for you to take a ‘commercial’ view, it is sometimes easy to forget who the client is. If you are asked to build contract templates, design them with the end user in mind, not the lawyer who drafted them or the lawyers on the other side. If it’s an employment contract, make sure it gives just the right impression during employee onboarding. If it is a sales contract, design it for fast closing and cut down on unnecessary legal wrangling. Be ruthless.
2. Consider a legal style guide, like Adobe did successfully. This helps position legal as a valuable service you can offer to people when and where they need it, in a format that’s accessible, digestible and transparent. When you come onboard you will likely have a million fires to extinguish. However, if you don’t find the time to build scalable infrastructure now, you likely never will. No need to go overboard at this stage, just lay down a marker and stick to it. The results will come later.
3. Use project management processes that are transparent and easy for the business to understand. Smart legal teams at growth businesses use tools like Trello, Asana and even GoogleSheets to give the business visibility of where a legal matter is in the pipeline. At Juro, we’ve seen legal teams using Jira for “legal support tickets” – the business can set up a ticket and see its progress in real time, helping you cut down on manual email updates and minimising business-side frustration.
4. Report with data. Your role matters and you need to prove it. If you are building wins for the business, share the good news and make sure they understand why your achievements matter to their bottom line – has your contracting platform helped them close sales faster? If so, how much faster? Have you reduced the number of disputes in the business? We have seen legal teams reporting weekly to the business on these wins. Show them the value you bring with real data, and the business will understand why you need to grow alongside them.
5. Line up your tech. Anyone who’s tried company-wide IT migration in a mature business knows how painful it can be. The growth stage is your chance to make sure your all your systems talk to each other at the outset - it only gets worse from here. If your BD teams are feeding Salesforce, then why not make sure your contracting platform talks to Salesforce? If the business uses GoogleDocs, why stick with Microsoft Word? If the business is using Slack, why are you stuck in email all day? Growing these pipelines in an integrated way is much easier than unpicking both later when you decide to upgrade.
These five simple steps could prevent disharmony and allow the business and legal to reinforce each other’s growth, rather than working against each other. As the business grows, the risk you face will grow too – if your business hits its revenue potential you’ll look back fondly on the carefree early days before your firefighting went global. A legal department empowered to grow in harmony with the business can help overcome those risks and make for happier working relationships.