July 13, 2009
What Criteria Should a Start-Up Use When Hiring Its First General Counsel?
I got an email from a student posing this question to me: what criteria should a technology start-up consider when hiring its first in-house general counsel? I can definitely speak from first-hand experience! Here's my response, but I would also welcome your comments and thoughts. Because blog comments are still off, please email them to me and let me know if I can post them publicly.
[Note: I'm assuming a start-up has already correctly decided that it needs to hire a GC. That consideration could be the subject of another whole post.]
In addition to the standard criteria used to evaluate lawyers, like legal acumen and professionalism, I suggest the following criteria:
* past in-house experience. There is a learning curve to being in-house, and someone who has done it before will be initially better equipped to handle the speed of a start-up than someone who is trying to learn how to be an in-house counsel on the fly.
* past experience working in a start-up. Start-ups pose unusual demands on lawyers, and some lawyers can't easily adjust. Therefore, someone who has lived through a start-up environment before will be better prepared for the unique challenges. For more on this, see my recap of my first three months at Epinions.
* willingness to be a line contributor. A start-up has a lot of routine commodity legal work. It also needs to build a lot of unsexy internal processes and needs someone to pay attention to little details--simple things like filing contracts or domain name renewals. So a start-up needs a lawyer who isn't afraid to roll up his/her sleeves and do some mundane legal work his/herself as opposed to delegating the work to others or outsourcing the work to outside counsel.
* not an empire-builder. In the same vein, some lawyers want to build up a resource-intensive legal department, and this is the last thing a start-up needs.
* excellent business judgment. Ideally, a GC at a start-up can contribute to the overall management of the company. This requires a person who can balance legal concerns with other business perspectives. At minimum, a start-up GC needs to be able to triage and decide which of the many legal problems on his/her desk need immediate attention, can wait, or can be ignored entirely.
* someone who can grow with the company. Some companies may have idiosyncratic perennial issues where some background expertise will help, but a GC should be able to grow with the company to handle the full range of legal issues the company is likely to encounter over its lifecycle. It could be a mistake to hire a GC with specific technical expertise only in one area that is a hot button for the company today. Once that issue dies down, the company may be stuck with a GC who isn't adaptable to the many other issues that will arise.
* the ability to say--and sell--"no." Start-up companies--even the best-meaning ones--tend to be willing to push legal limits. However, most in-house counsel are socialized to avoid saying "no" if at all possible. A start-up company needs a GC who can say no when it needs to be said. Further, because people don't like to hear "no," a GC needs to be able to get others to listen when he/she says no. This means wielding the N-word wisely but also having the credibility/salesmanship to make "no" stick when it's wielded.
* interest in the company's products. A start-up job is usually fairly demanding, so it really helps if someone is actually interested (or, better yet, passionate) about the company's products and services. That way, they will be more excited to undertake the sometimes-heroic efforts required to help the company succeed.
UPDATE: I got the following from Josh King at Avvo: "I would add two related points: 1) Your new GC must be flexible enough to not only deal with mundane legal work, but also to do all manner of other work that assistants, secretaries or people in other groups did previously for them. I regularly go on beer runs for the office, deliver mail and shop for office supplies, and supporting the office as a regular member of the team is critical to success in startup culture. 2) In addition to having excellent business judgment and the ability to grow with the business - I've never had an in-house role that didn't morph in wildly unpredictable ways within the first 6 months - your GC must be able to match the company's level of risk aversion. It's a lot easier to sell "no" when you're not wringing your hands over every little potential legal risk the company might face."
As I told Josh in a reply email, WRT #1, I used to restock the snacks in the kitchen and sort the mail.
UPDATE 2: I got the additional comment, which I fully agree with:
"The one consideration that's missing from your list -- the most important one, in my view -- is someone with the trust and confidence of the principal business person, usually the CEO. It does not have to exist prior to hiring -- an investor can and often does install someone of their own choosing. But if the GC and the CEO don't have personal trust and confidence -- both ways -- the GC hire will never contribute at the highest level. Trust and confidence -- all the rest can be learned."
July 12, 2009
Michael Jackson Spinning Mix
Following Michael Jackson's death, Lisa decided that it would be nice to put together a spinning mix commemorating his music. This is what we came up with:
1. Rock With You
2. Blame It On the Boogie
3. Shake Your Body (Down to the Ground)
4. Wanna Be Startin' Somethin'
5. P.Y.T. (Pretty Young Thing)
6. Man In the Mirror
7. When I Think of You (an interlude from Michael's sister Janet)
8. Black or White
9. Fat (this is "Weird Al" Yankovic's spoof of "Bad")
11. Somebody's Watching Me (from Michael's childhood friend Rockwell; Michael sings prominently in the chorus)
12. I Want You Back
13. Don't Stop 'Til You Get Enough
15. Human Nature
16. Never Can Say Goodbye (of course we have to say goodbye to the singer, but we never can say goodbye to the songs)
July 09, 2009
Wisconsin Diploma Privilege Ruling Comments--Wiesmueller v. Kosobucki
Today, the Seventh Circuit issued an opinion in Wiesmueller v. Kosobucki, written by Judge Posner. This lawsuit is a class-action challenge to Wisconsin's diploma privilege, which allows graduates of UW Madison and Marquette to become lawyers in Wisconsin without taking a bar exam. Licensed lawyers in some other jurisdictions who have sufficient practice experience can also obtain a Wisconsin law license without taking a Wisconsin bar exam, but everyone else has to take the bar exam to get a Wisconsin license. For example, California does not have reciprocity with Wisconsin, so when I moved to Wisconsin, I would have had to take the Wisconsin bar exam to obtain a Wisconsin license despite my California license and eight years of practice experience.
Many states used to have a diploma privilege, but over the years all of the other states have adopted a bar exam requirement, leaving Wisconsin as the only state still with a diploma privilege.
As I have written before, I am not a fan of the diploma privilege. Its effect was to encourage/pressure Marquette students to stay in Wisconsin rather than exploring other labor markets which required a bar exam that required months of painful and joyless studying without a salary to prepare for. This distortion in out-migration meant that Marquette's reputation was heavily regional because the geographic footprint of its alumni was comparatively limited.
As a professor, the diploma privilege was stressful. Posner writes that Marquette and UW Madison might have "less incentive to spend time drilling them on Wisconsin law than the faculty of most law schools in other states would have” because there is no pressure to prepare students for the bar exam. In fact, the opposite was true. My Marquette colleagues and I were acutely aware of our responsibilities to Wisconsin citizens. We knew that our students could hit the streets the day after graduation and set up a shingle without any bar exam "filter" or even the doctrinal review that most students get from their bar exam preparation course. Knowing that I was the "last stop" in evaluating my students’ mastery of legal doctrines, I felt significant pressure to ensure my students had really mastered the law—perhaps more pressure than I feel today knowing that my current students will have to survive one more major examination of their doctrinal knowledge before they get unleashed onto the public.
In this ruling, the Seventh Circuit revives the legal challenge to the Wisconsin diploma privilege and remanded the case to the district court for more fact-finding. Much of the opinion implicitly espouses a skepticism that UW Madison and Marquette do anything special to teach students Wisconsin law.
I understand this skepticism, but I think it’s unwarranted. From my perspective, Marquette emphasized Wisconsin law plenty. To reinforce this message, Dean Kearney's ridiculously oppressive Faculty Activity Report form always asked us to identify how we incorporated Wisconsin law into our courses. Given that this report was tied to our compensation, I certainly got the message. I included Wisconsin-specific legal doctrines in all of my courses—even my Cyberlaw course, which is not so easy given the borderless nature of the subject material!
To be clear, I didn't emphasize Wisconsin law to the exclusion of national legal principles. After all, some of my students were leaving Wisconsin, and I needed to prepare those students as well. As a result, it's not clear to me if Marquette emphasizes Wisconsin law more than other schools emphasize their local state’s laws. My guess is Marquette's balance between state and national law is fairly similar to many other schools' balance. But we definitely taught Wisconsin law!
Others have already provided some analysis of the opinion. Some worth checking out include:
* Dean Kearney. Among other things, Joe says "I expect that on remand (and any subsequent appeal) the diploma privilege will pass constitutional muster."
* my former colleague Christine Hurt
* State Bar of Wisconsin report
Today's opinion was exciting for another (and wholly unexpected) reason. The opinion provides a lengthy shout-out to a 2006 post from this blog about the Wisconsin diploma privilege. It is always satisfying to be cited by a judge, and it does not happen every day for me. My works have been cited in less than a half-dozen judicial opinions, and I believe this is the first time I've been cited in a federal appellate opinion. And being cited by Judge Posner, one of the most esteemed jurists of our time, is especially gratifying.
Ironically, the blog post in question is hardly one of my most brilliant contributions to the dialogue. It's a simple 3 paragraph post (partially recapping and responding to a video from a local Wisconsin station) that probably took me less than 30 minutes to research and write, compared to some of my thoroughly researched multi-thousand word entries that take over a dozen hours to write. I've experienced this before in the sense that my most heavily trafficked blog post of all time (and thus, one of my most widely read works ever) was a single paragraph blog post I pounded out in less than 60 minutes making a snarky point about a New York state law banning domain name sales to terrorists. It's a fine post for what it is, but I never expected that it would get the attention it got.
These are vivid reminders that we as bloggers need to stand behind every post we make. We never know who is going to read a post (however lightweight it is) and cite it in a federal appellate opinion.