For general counsel, working at a FTSE 100 or Fortune 100 company was once considered the pinnacle of success. But now, some top lawyers are eschewing corporate life in favor of the excitement and challenge of joining a biosciences or artificial intelligence startup.
While an in-house role at a large organisation can offer job security, it also often involves bureaucracy and managing existing legal functions. In contrast, joining a start-up offers the freedom to build a legal function from scratch and shape the future direction of the company.
Sean Martin moved from Baxter International, a large healthcare company with about 55,000 employees, to a new biotech company employing about 300 people, where he and his legal team are helping the company develop new treatments quickly.
This new company, Generate Biomedicines, is wearing Artificial intelligence, machine learning and other technologies to streamline the drug development process and create new drugs on demand. Last year, increase Series C funding of $273 million. Total equity funding amounts to nearly $700 million since 2020.
At Baxter, Martin had been senior vice president and general counsel, leading a team of about 175 employees worldwide and handling all legal, government and compliance matters. As chief legal officer and general counsel of Generate Biomedicines, however, he leads a legal team of six people who sit about 20 feet apart.
Martin was aware of the start-up from his time at Baxter and was interested in the business. However, he had no intention of leaving the larger group. “It was an important job and the kind of job I could have done for 10 years and then retired,” he says.
Then, in late 2021, the job offer came. “I spoke to friends and they said, ‘You’ll regret it if you don’t do it,’” she recalls.
He soon discovered that in a small start-up, an experienced lawyer must be able to handle any area of law, be it data protection or employment.
Martin says he likes the variety of work. “I’m a handyman and I use my 24 years of in-house legal experience,” he explains. “I can handle some data privacy issues because we don’t have a data privacy lawyer.”
Paul Swegle, who is currently general counsel or general counsel for five startups and two emerging companies (in areas ranging from telehealth to medical diagnostic testing), agrees with Martin about the variety.
“Startups have a lot of interesting work,” he says. “There are a lot of different things that a general counsel has to do: protecting intellectual property, signing contracts, managing risk, launching a website and agreeing terms and conditions. It’s important to have someone who knows all of these things if you’re a startup.”
Swegle, who is also an adjunct professor of law at Seattle University School of Law and Gonzaga University School of Law, notes how different the situation can be compared to a large corporation. “As a senior attorney at a large corporation, you may end up doing the same thing over and over again,” he says. “You may be the anti-bribery expert or drafting contracts all the time, or just doing compliance.”
Startups often have to act more quickly because they have limited funds, so they tend to look for lawyers with experience in the business sector who can solve problems and minimize risks. In some cases, they will look for lawyers with highly specialized knowledge (life sciences companies, for example, face regulatory hurdles and approvals that are specific to that sector).
For lawyers, the big draw of joining a fast-growing start-up is financial: there is the possibility of earning stock options in a fledgling company that could one day be very lucrative if the business is sold or goes public.
“Lawyers can get a mix of short- and long-term equity in a startup that may be heading for an IPO or sale,” says Lisa Owens, managing director of the in-house legal recruitment team at legal search firm Major, Lindsey & Africa. “More and more companies are offering high equity packages to GC-level executives, and the pay gap between legal and other functional roles has narrowed.”
Additionally, the combination of jobs offered by a startup can give lawyers the breadth of experience needed to make the leap into a broader corporate career.
“More and more general counsel are being given the opportunity to take on commercial responsibilities or move into commercial roles,” Owens notes. “This means that more senior lawyers are willing to take the risk of moving to a start-up.”
Owens adds that the role of general counsel in all types of companies has taken on greater importance since the Covid-19 pandemic, as some general counsel have taken on additional responsibilities in their organizations. As a result, they have a stronger voice on executive teams.
Senior lawyers who have made the jump to start-ups say they enjoy the fast-paced environment and working with younger, highly-skilled colleagues full of enthusiasm and new ideas.
“There are a lot of young scientists who have taken this as their first job after their PhDs and there is a lot of buzz around the place, which is exciting, with new people joining every week,” says Martin.
But top-level lawyers face risks in leaving a secure job at a large firm with a steady salary and benefits. “The downside is that 80 to 90 percent of startups fail,” notes Swegle, who is also the author of the book Startup law and fundraising“Momentum is very important for startups and they have very little time to succeed quickly.”
However, general counsel can help by working with business owners to raise funds and ensuring they do not inadvertently violate regulations and laws.
“Startups can be precarious and may commit acts such as, for example, inadvertently violating securities laws through lack of sophistication or misplaced enthusiasm,” Swegle warns. “They may think, ‘We’ll pay employees only in stock,’ not realizing that this violates minimum wage laws. Or they may misclassify someone as an independent contractor.”
But for many of the high-profile lawyers who have made the move, there is a bigger aspect to the role: being part of something innovative that could have an impact on society at large. “There’s the opportunity to change things and do things that no one else has done,” Martin says. “I get excited about coming to work every day.”