Technology transactions lawyers are vital team members in many in-house legal departments. While tech transactions lawyers were once the province of tech companies that primarily sold and licensed technology, many companies dependent on technology are now in need of the skill set uniquely attributable to these professionals.
Companies are no longer simply passive consumers in tech transactions. Instead, they increasingly assume liability based on their use of technology and have grown more dependent on it, especially as machine learning and artificial intelligence automate more processes. Accordingly, companies need tech transactions lawyers in-house to help these matters move smoothly and protect themselves from risk.
What is unique about tech transactions?
"Tech transactions" is a catch-all phrase that encompasses any agreement that deals with technology. These transactions can involve licensing, buying, selling, or distributing technology. For example, joint development and Software as a Service (SaaS) agreements are typical tech transactions.
Historically, tech companies were chiefly concerned with these transactions. However, with increasing reliance on technology as a vital component of their businesses, companies in a variety of industries — banking and financial markets, health care, private equity, logistics, and e-commerce, for example — are more tech-dependent than ever.
Regulatory responsibilities have also evolved and changed. For example, certain health care technology is designed to compile data and make it available to providers while complying with HIPAA and ensuring patient privacy. Any failure of the software employed by such a company to comply with relevant privacy statutes could lead to liability for that company. As such, companies cannot solely rely on software developers to look out for their best interests and can no longer be passive buyers of technology but must become equal partners in tech transactions.
So, while tech transactions document an exchange of goods or services, they also must clarify liability and define responsibilities in the event of a data breach or other adverse event. Tech transactions lawyers help minimize these risks by identifying and addressing them in advance.
Unfortunately for smaller companies, tech transactions do not take place on a level playing field. Software giants may try to strong-arm smaller businesses into agreements with terms favorable to the software giant. A tech transactions lawyer familiar with these tactics can suggest changes to reduce or equalize the potential for liability or other adverse consequences.
Recruiting lawyers for tech transactions
What can you expect to find in this pool of professionals? Optimally, a tech transactions lawyer will display a wide range of skills and abilities from many different fields. Most sought after tech transactions lawyers have at least five to 10 years of experience with backgrounds in law firms, in-house departments, or both. Many qualified candidates also offer experience in government positions, especially in areas of cybersecurity and privacy. Generally, these candidates are comfortable with a high volume of work and aren't unsettled by the prospect of all-day transactional work.
In-house vs. outside counsel
Why hire an in-house tech transactions lawyer rather than simply farming out tech transactions to outside counsel? Traditionally, the standard play was to turn to outside counsel. However, as the technology environment changes and the playing field between developers and their customers becomes increasingly imbalanced in favor of tech giants, in-house tech transactions lawyers offer distinct advantages.
For one, with an in-house tech transactions lawyer, the lawyer only considers the company's interests, knows the company inside and out, and if they see something they know won't work, they can take the time to evaluate it and find a better solution without an immediate and measurable increase in legal costs associated with the transaction.
Second, in-house tech transactions lawyers are available to address organizational questions at any time. You don't have to compete with other clients or the busy schedules of outside counsel.
Finally, as mentioned previously, there is a cost savings associated with hiring in-house tech transactions lawyers. The idea is that ultimately an in-house lawyer will handle these matters at a lower cost and more efficiently than outside counsel. Helpfully, there are online tools (https://bit.ly/43mV1y8) available to help companies assess whether hiring in-house counsel would be cost-effective for the business.
What to look for in a tech transactions lawyer
Organizations in the market for a tech transactions lawyer should consider several key factors to ensure they choose the right candidate for their organization.
Here are some of the key factors to consider:
(1) Relevant experience: A tech transactions lawyer should have experience working on deals that are similar to the ones into which your company enters, has an understanding of industry trends, and is familiar with the latest legal developments that may impact the company.
(2) Communication skills: A tech transactions lawyer should be able to explain complex legal concepts in a way that is understandable to non-legal personnel and should be able to communicate effectively with other members of the legal team, executives, and external stakeholders.
(3) Contract drafting and negotiation skills: A tech transactions lawyer should have drafting and negotiation skills sufficient to ensure that deals are structured in a way that aligns with the company's business objectives and protects its interests.
(4) Cultural fit: A tech transactions lawyer will need to be able to work effectively with the company's existing legal team and overall structure and should be able to operate within the company's culture.
(5) Problem-solving skills: A tech transactions lawyer should have strong problem-solving skills and be able to quickly identify potential legal issues and propose solutions that are practical and cost-effective.
(6) Attention to detail: A tech transactions lawyer should be detail-oriented and able to review complex legal documents with precision and care.
Companies typically focus on tech transactions lawyers with five to 10 years of experience. Five years generally represents enough time for a tech transactions lawyer to have developed the experience necessary to address commonly encountered situations. If your company needs a more senior role rather than an individual contributor in tech transactions, consider a range of 10 years or more.
While these attorneys seem to fit a profile, don't get stuck in a rut. Many attorneys outside of a typical tech transactions lawyer profile have transferable skills that often prove vital. For instance, a former privacy litigation attorney would likely have already seen what causes trouble for companies in agreements and could use that experience to a new employer's advantage.
It is also important not to get caught in the trap of assuming that attorneys with military or government service backgrounds are highly risk averse. Many of these professionals bring experience in complex national security or law enforcement issues and can adjust to a company's risk-taking culture. It is important to assess each candidate as an individual, in any case. The key is that a company seek a lawyer with experience in a technology-focused practice area or industry. Even if a tech transactions lawyer has never worked in an in-house legal environment, skills developed elsewhere can quickly transfer to in-house.
Technology will only grow and offer more opportunities for companies, and a legal department should be equipped to assess the risks thoroughly. With tech transactions lawyers on the team, companies can reduce threats, capitalize on opportunities, and improve relationships with customers and developers.