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Start-ups 'need specific type of GC'

Posted by: Laurence Simons 07/01/14

General counsel (GC) aren't solely the preserve of faceless mega-corporations in huge offices with coffee that you can pour just by turning on a tap (living the dream). The smaller end of the business spectrum also needs legal advice, and the glut of start-ups in the UK and the US have created a new market for in-house lawyers.

However, the skill-sets required are somewhat different. Not every start-up requires its workers to wear clunk retro-chic glasses and enjoy taking part in quirky team-bonding exercises, but that's one of the cultural shifts GCs working in this sector may be aware of.

Furthermore, the timbre of the legal advice they are expected to offer is fundamentally different, given the gap between the aims of a small, boutique firm and a multinational business.

Daniel Doktori, an associate in the emerging companies practice at WilmerHale in New York, recently wrote for TechCrunch about the experience of GCs in the thriving start-up world.

One lawyer in this sector told him: "Lawyers are not engineers. They don't reliably produce products on a daily basis, but instead provide a strategic, long-term value proposition focused on smart growth and risk-management."

This explains why small start-ups are willing to bring in a legal expert - often the entrepreneurs behind these businesses do not have a great deal of understanding around the issues of intellectual property, employee law and so on, meaning GCs need to take an active role in formulating policy and guiding any moves made by the company.

A great deal of research and communication is required to carry out this role effectively, the lawyer explained to Mr Doktori.

Finally, GCs need to be cautious when it comes to dealing with the chief executive officer of a start-up, as they do not want their role to be perceived as that of the person that simply turns down every request.

"It’s not the GC's place to say no. It’s the GC's place to expound on the risk and if there is something that is super risky, make that clear, but leave the call to the boss," another start-up lawyer explained.