The growing technology scene in Silicon Beach, home to more than 500 technology start-up companies, has shifted the economic tides of Los Angeles. As the third largest tech hub in the country, LA has put its unique stamp on the landscape with the intersection of media, tech, entertainment and marketing, followed by digital support of the medical industry. As this ecosystem grows, so too do their legal needs. For the legal industry, a world of unique opportunities has opened for lawyers looking for a new challenge.
These tech startups are in immediate need of specialized legal talent to handle the myriad rules and regulations associated with technology today. In addition to an understanding of intellectual property (IP) and IT issues, tech startups require lawyers to have a deeper understanding of how to protect their consumers. While that presents many opportunities, it also creates challenges. Privacy and cybersecurity law, though buzzwords in business legal news and a hot new area of the law, are not practice areas that existed 15 years ago, at least not in the form needed today with rapidly evolving social media platforms and internationally diverse regulations. That means finding the right legal talent can be difficult. Furthermore, because of the conservative nature of the legal profession, lawyers up for the challenge of developing expertise in these burgeoning areas may not be ready for the cultural experience of working in a startup.
With the increased use of the internet in all businesses, and the collection of personal information in connection with e-commerce, most companies, regardless of industry, need legal experts who are well versed in privacy and cybersecurity law. Privacy law focuses on regulation related to personal information about individuals, which can be collected by governments and other public and private organizations, as well as the storage and use of that personal information. It differs from cyber law, which regulates information sent digitally, including activities performed and transactions conducted over the Internet and other networks, as well as the exchange of communications and information.
Typically, these companies use outside counsel to help with the investment side and intellectual property matters. When it comes to privacy and cybersecurity, however, it is important to have on-site advisers who can advise executives, software developers, marketing and business development professionals, among others, as these are often components of the very product being created.
To handle these questions, companies want the best of the best: Legal counsel that has 10 to 15 years of experience, preferably someone who is a certified privacy professional. Their ideal general counsel would not only have expertise in privacy and cyber law, but would also have prior experience at a venture-backed company—someone who understands their unique world and what is expected in the fast-paced, high-growth tech environment. Unfortunately, those requisite skills don't often all come in one candidate. Leadership for a startup may have to reset their expectations and instead look at qualified candidates who have the general counsel skills, an appetite for these cutting-edge areas of the law and a willingness to adapt to something new. Management should also recognize that this is an area of law that is still being created and constantly evolving, so they may want to consider a skilled corporate generalist who won't have privacy law on his or her resume yet, but is eager to gain those valuable skills.
The Best Person for the Job
Companies are not the only party that will need to manage their expectations. Candidates interested in becoming a general counsel for a startup, and specifically one with a need for privacy expertise, should be prepared to learn—and learn quickly. Many lawyers who are drawn to the entrepreneurial culture of a startup will need to acquire new skills and have some tolerance for risk. Even more critically, they will need to be prepared for an atypical culture not often found in a big public company or large multinational corporation.
Start-up culture is very fast-paced and exciting. Legal counsel is leaned on as a trusted adviser and strategist within the organization with direct access to the CEO and other senior management. But those upsides also come with downsides. While the legal counsel will have a seat at the table, chances are he or she will be older than the CEO, and possibly the only employee who has previously worked in a corporate environment. Visionary entrepreneurs may be difficult to harness, and if lawyers are providing "rules" to follow, they'll need to be skillful in delivering the message. Furthermore, work spaces do not resemble the typical corporate office. Today's start-up environment tends to center around open work spaces and a great deal of collaboration (along with interruptions), and the general counsel often sits in a cubicle next to another executive.
Start-up resources are often limited, so a lawyer will have to get creative about the resources used outside the company (e.g., counsel, software), and may not have the luxury of support staff. Today's startups are not becoming as rich as quickly as many of the dot-com era businesses, so if a lawyer is looking for long-term stability, he or she might want to look elsewhere. Exponential growth can either lead to tremendous success or to high-profile failures. Either way, lawyers in start-up environments must be highly adaptable, quick on their feet, able to deal with ambiguity and willing to wear many hats (a variety of which will not be traditional legal ones).
Lawyers wishing to work in Silicon Beach need to consider these cultural characteristics before jumping into uncharted territory. The opportunity to be the first or try something new may be a strong draw—and perfect fit—for an eager lawyer. The right lawyers for Silicon Beach startups will have unique personalities, a strong desire to learn something new, and the right dispositions to navigate a nontraditional corporate environment and a variety of personalities. Startups hiring a lawyer must be prepared to hire one who does not check all the boxes at first glance—or even one who is considering an "encore career." If both sides are willing to try something new and take a chance, a successful partnership could be forged, leading to a prosperous, long-term relationship.
This article originally appeared in The Recorder, March 10, 2017.
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PJ Harari is a partner at Major, Lindsey & Africa in Southern California, where she has been since the inception of the Los Angeles, Orange County and San Diego offices, which she helped launch over 15 years ago. Harari's practice focuses on conducting senior compliance and general counsel searches on behalf of corporate legal departments.
Gigi Birchfield is managing partner of Major, Lindsey & Africa's Los Angeles office and co-global practice leader for the in-house practice group. Her recruiting practice has focused primarily on conducting in-house searches across industry lines with a special emphasis on the placement of senior attorneys, including chief legal officers and general counsel.