An Entrepreneur Becomes a Lawyer to Entrepreneurs
Coming out of law school, I knew I wanted to work with the entrepreneurs and investors in the startup and venture capital community – the people that are shaping our global economy as we enter the “Fourth Industrial Revolution”. I am an entrepreneurially-minded, creative person by nature, and I saw myself maturing into an enterprising, creative lawyer and working with them (and more importantly, alongside entrepreneurs and innovators). I wanted to be more than just a legal scribe for my clients; I wanted to truly understand my clients’ industry/technology sector and their specific businesses, markets, solutions, strategies and competitive landscape in order to be the most effective counselor and sounding board for them. Even more, I wanted to be a problem solver and opportunity creator for my clients. And I felt that I could only truly “walk the walk” with a team intent on disrupting the status quo and bringing true innovation to the legal marketplace. I had no idea, though, just how difficult it would be to find a group with a real presence in the space and whose values, customs and culture fit with the direction in which I, and others, saw the industry trending.
It turns out there weren’t too many of them. The largest firms purported to have thriving startup and venture capital practices, but I couldn’t see how the astronomical hourly rates, aggressive leverage models and bloated operating budgets at these firms were compatible with the lean startup trend, especially at a time when the effects of the 2008 economic recession were reverberating through the legal marketplace here in the U.S.; and the smaller firms (with more reasonable billing rates) just didn’t have the subject matter expertise, breadth and depth of experience or the robust practices I wanted to join.
I found at least one notable exception, however, and I decided to “put my money where my mouth is” and join a boutique firm with a footprint in New York City and the northeast U.S. that sought to disrupt the traditional legal services marketplace, especially where it intersects with the startup and venture capital community. The firm, SorinRand, sought to help clients achieve their goals, sensibly, in light of the new realities of the 21st century economy, declining capital intensity of startups, dramatic advances in technology and their effect on the business and legal marketplace. So I made a bet – just like startup founders and their teams – and joined an unproven firm because I wholeheartedly believed in the firm’s vision and its plan to implement that vision.
Like the clients we represented, we sought to operate “lean” and pass these savings to our clients. Among other cost-saving measures, we eschewed palatial office spaces in “high-rent” districts, recognizing that clients don’t (generally) close deals in person anymore or want their hard earned money to pay for conference spaces that go unused. We limited the number of administrative professionals on staff to only those truly necessary to serve our clients – I write my own emails and schedule my own meetings, and current technology permits me to do these things without sacrificing valuable (and scarce) time devoted to my clients!! And we decreased the amount of “usable space” allotted to each attorney, all while maintaining compensation packages in line with our competitors in order to attract and retain the best attorneys. As a result, our billing rates shrunk to about 60 – 70!% of those at our peer firms.
I truly felt that these initiatives, coupled with the firm’s collaborative, business-oriented and value-additive approach, would resonate in the marketplace, and guess what? They did. Our startup and venture capital practice took off, and before long our boutique was one of the most highly respected firms in the space.
With the viability of this business model borne out in the marketplace, several of our competitors approached us with acquisition proposals, but only McCarter & English afforded us the opportunity to leverage the geographical scale, size, and breadth of services of a large firm to provide clients the variety of legal services they require throughout their business lifecycles, while retaining the unique delivery model and value proposition offered by SorinRand. As they say, the “proof is in the pudding” – according to PitchBook’s Global League Standings, published quarterly, McCarter is among the top 10 most active law firms in the space regionally, 11th in the U.S., 11th globally, 10th in global software transactions, 3rd in global commercial services and 14th in global early stage transactions, and the firm’s Venture Capital and Emerging Growth Companies group is ranked nationally in Chambers, the definitive publisher of law firm and lawyer rankings. We are proud to be the only East Coast (U.S.) law firm with this level of professional and deal activity standing.
Despite all these accolades, we still operate “lean” and with an eye towards pragmatic, responsive, results-driven representation of our clients. Only recently I found myself debating the merits of a potential “Israel-Delaware flip” with a Tel Aviv-based client looking to tap into U.S. capital markets while taking the family dog, Ernie, for a Sunday morning walk around the neighborhood. While still the weekend over in the States, Sunday morning marked the beginning of another busy week for the client in Israel, and the client’s fundraising strategy depended in no small part on whether to reincorporate as a U.S.-based entity. After considering the increased willingness of U.S. venture capital firms to invest directly in Israeli companies, the client decided to defer any internal corporate reorganization (and the billable legal time associated with such a transaction) until absolutely necessary in light of the client’s financing needs. And this is just one recent example of our client-first approach in practice.
I have the distinct pleasure of working every day with founders, investors and others in the startup and venture capital community who are pushing the envelope, creating new technologies and disrupting antiquated business practices. And my clients know that we’re doing the same thing over here – disrupting the traditional law firm model while delivering truly value-additive services that put the client’s needs first, where they should be.
Matt Uretsky, McCarter & English, LLP
Venture Capital & Emerging Growth Companies Group
Blockchain, Smart Contracts & Digital Currencies Group
Israeli Practice Group