Wanted: fast-growth companies seek willingness to handle legal risk
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Working for a fast-growing company is not for everyone — certainly not those lawyers put off by, say, a little missionary zeal, or a collapsing share price.
Jessica Winter, general counsel at London-listed fintech Wise, is so used to hearing its mission statement that she can quote it word for word. Similarly, Dan Gallagher, chief legal officer at Robinhood and a former commissioner at the US Securities and Exchange Commission, has the essence of the trading platform’s mission down pat.
But neither can match Rob Miller, chief legal officer at Moonbug Entertainment, the company behind kids’ streaming and YouTube phenomenon CoComelon. A former lawyer at Skyscanner, Deliveroo, Improbable, King, Skype, and eBay, he can summon up a precis of the mission of just about every company he has worked for.
Surely, he cannot be a born-again convert to each and every one? “The mission needs to resonate 100 per cent,” says Miller. If not, he argues, the job will not work out.
But commitment to a company’s mission is about more than words and an evangelical start-up culture. It is also about working out whether, as a lawyer, you can get close enough to offer strategic advice to the founder and senior executives — many of whom will have been together since the start.
“I have worked in companies where there is cultural fit, and I’ve worked in companies where there’s not,” says Miller. “You need to make sure the chief executive wants a [general counsel] where you have a chance to build up a relationship to become a trusted adviser. You need to make sure that’s what the board and investors really want.”
The job of chief legal officer or general counsel at a fast-growing company can mean delivering difficult messages to a chief executive who is uniquely defensive of their labour of love. It can also require overhauling policies and structures no longer fit for purpose at a group where executives still think they are running a start-up, but where the valuation is nearer that of an S&P 500 or FTSE 100 company.
When Gallagher took up his role at Robinhood in May 2020, after a short stint as a non-executive director, the disrupter’s compliance record was somewhat shaky.
Robinhood had, for at least five years, “failed to establish and maintain a supervisory system” for complying with securities laws, the US Financial Industry Regulatory Authority found when it imposed a $70mn penalty last year. Six months earlier, the SEC had charged it with misleading customers about how it made its money between 2015 and 2018.
Gallagher negotiated settlements with both watchdogs, he says, likening this to Hercules clearing out the Augean stables. That allowed Robinhood to start the process of resetting the relationship with regulators — but not without considerable internal upheaval in the company’s legal team.
Gallagher ultimately brought in three new deputy general counsel who carried weight with the watchdogs. He also insisted that the company establish a lobbying function — a move it had resisted on the basis that it did not want to be too “Wall Street” — and base lawyers in Washington, closer to regulators and politicians.
There is still a possibility of missteps, Gallagher acknowledges, but “if the regulators get the sense you’re trying in earnest . . . they do have discretion”, he says. “Traditionally, we hadn’t got the benefit of that discretion.”
Buying into a company’s mission also means believing in — and using — its products. That is important in organisations where the product is being developed particularly quickly, with potential legal and regulatory implications for each change.
Lawyers have to make sure they keep up, says Laura Jeffords Greenberg, who has worked as a lawyer in fast-growing companies, including video game software developer Unity Technologies in Copenhagen.
“There’s always the fear we’re missing something,” she says, of the in-house lawyer’s predicament. That means building deep relationships with the rest of the business. “The worst thing is [for the business] to think of us as a check box. If they’re thinking of us as a check box at the end, that’s when problems happen.”
Greenberg says she has worked hard at showing colleagues to be alert to when they might need to involve the legal team — “and it’s not just when you want to buy something”, she says.
At Wise, Winter encourages her London team to join colleagues sometimes in a central area of the office known as the “enchanted forest” thanks to its many pot plants to facilitate informal interactions with other “Wisers”. It “strengthens the bonds with the rest of the business and helps us deliver fast and effective advice,” she explains.
Working for a fast-growing company also clearly requires a certain attitude to risk: Gallagher, Greenberg and Miller all talk about a willingness to take risks.
“If you’re working for a start-up, you’re going to have to be comfortable with change, with not knowing what your job is going to look like in a couple of years’ time,” says Greenberg.
When Gallagher joined Robinhood, the three most senior lawyers in post all left before the end of the year. And one reason Miller has held so many high-profile roles is that he is recruited to help manage an initial public offering or exit — which can happen sooner than expected.
Some people thrive in such an uncertain environment, others do not. Staff turnover can be high in legal teams among those who struggle to adjust. As Miller puts it, “you either like working in these types of companies or you don’t”.