Exponential growth can sometimes feel like trying to stand still on a treadmill—a relatable feeling for in-house counsel working in start-up environments. Most will find their balance in the end and begin to run, balancing the needs of the company with the ever-increasing demands of rapid growth.
Kristen Corpion, Founder and Chief Legal Officer of CORPlaw.us, is familiar with the nexus between in-house counsel and start-ups, so we put the question to her: What are high-growth start-ups looking for in their in-house counsel?
"Typical businesses grow at three to ten per cent per year, whereas start-ups can be dealing with 500 to even 100 percent growth", she says. While those numbers are extraordinary, they also pose a risk, as tasks can easily slip through the cracks and cause countless problems down the line. Meaning business acumen and task prioritization are a must for any would-be counsel working at a start-up.
Another must-have is strong employment law knowledge as start-ups are in the business of independent contractors, employee share option schemes, and rapid onboarding. We're talking contracts, and lots of them, all likely drafted while balancing the usual attendances.
"There's no get out of jail free card for start-ups," says Corpion. Impressive growth and capital raises are no excuse to neglect run-of-the-mill operational responsibilities. This is where in-house counsel comes in, synthesizing legal problems and coming up with solutions to set the pace for the business.
If in-house counsel can embrace the 'solution-enabler' role, they will become invaluable to the start-up.
"The type of people who are successful in start-ups are those who move fast and don't want to slow down," says Corpion. A lawyer who is comfortable working mechanically and slowly through legal processes won't fit the start-up culture.
Soft skills come into play here. A lawyer likely to thrive in a high-growth environment is someone who can fit into the start-up culture, read institutional dynamics and adapt to the business.
"Killing the lawyer ego" is fundamental to in-house counsel's ability to fit into the fabric of a start-up. "You have to accept that most people in the business don't like lawyers and think they will slow them down." It's important in-house counsel takes a human approach to issues with empathy and efficiency.
Corpion believes sweat equity can lead to a number of problems within a start-up "I see a lot of benefits in working with independent contractors versus employees and abusing the idea of sweat equity."
While equity gives employees a sense of ownership, it's never good business to underpay people. "I see a lot of challenges and opportunities around building a team and paying people to support the start-up as it grows," says Corpion.
Another issue faced by start-ups is their tendency to use too many legal resources simultaneously. "Many high-growth start-ups end up with a piecemeal arrangement - they engage multiple legal specialists," says Corpion.
It's not uncommon for a high-end law firm to be handling emerging corporate governance issues alongside a specialist IP counsel managing trademarks and patents, not to mention whoever is handling contracts and insurance.
The result is often executive teams frustrated by their legal spend and apparent lack of return. This is a problem that rarely solves itself, and until a full-time counsel is onboarded their legal operations will lack strategy and cohesion.
Corpion's advice to in-house counsel contracting to a start-up: "Work as efficiently as possible and, if anything, over-communicate."