How do you regulate the future? More importantly, who is going to do it?
The intersection of tech and law is a fascinating one: Our reality is born out of a tension between innovation and regulation. In this fourth industrial revolution, how can we expect our regulators to keep up with our innovators using traditional legal education alone? According to Alice Armitage, we cannot.
Professor Armitage is the Director of UC Hastings’ Startup Legal Garage, a yearlong course in which law students provide free legal services to young startups under the supervision of practicing attorneys. As the first woman Editor-in-Chief of the Yale Law Journal and the founder/CEO of a White House award-winning safety app, Professor Armitage is no stranger to challenging the status quo. She is pragmatic, proactive, and innovative — much like the program she directs.
Always one step ahead, Professor Armitage is adapting legal education to the demands of our next economy — effectively bringing law up to speed with tech.
Director, Startup Legal Garage
1. What is the Startup Legal Garage and why is it unique?
The Startup Legal Garage is an innovative, experiential law class. Law schools are normally classroom-focused experiences. You learn the doctrine of the law but when you go out to practice — and I think that all of us who graduated from law school discovered this — the practice of law is very different. Law Schools and the American Bar Association have been talking about how do we help with that transition. There’s more pressure now for students to be practice-ready than when I was in school.
What is unique about the Startup Legal Garage is it’s focused on corporate transactional law and we’re working with for-profit companies. Our thinking was students needed to get this experience in transactional law. On the corporate side, we’re helping a company create the legal platform from which they can either grow or get an investor. Many students in this area want to go out and work with startups, which is essentially corporate transactional law, and we wanted to design a program that will allow them to have some real world experience. Professor Robin Feldman founded this program 7 years ago with three students and now we have 60 students at Hastings and 6 at UCLA who joined us through a virtual streaming service. The law firm is the lawyer, the startup is the client, and the students are working as legal assistants. It is a yearlong course and students work on two projects. This program was designed to help our students but it’s turned out to be sort of a win-win-win, the lawyers and the entrepreneurs are just as enthusiastic.
We try very hard to find women and underrepresented entrepreneurs that have founded these companies because they tend to have less access to the sort of resources that your typical young Stanford grad has. He or she often knows VC’s or other ways to get these services provided. Other people don’t, so we try to reach those other people. Last semester over 50% of our startups were founded by women and over 60% were founded by underrepresented minorities.
2. What gaps do you see in traditional legal education — including those of our nation’s top universities?
There are a couple of ways to think about this. Traditionally law school has taught legal issues from a conceptual perspective. For the law schools at the top of the U.S. News & World Report rankings (Yale, Stanford & Harvard) — certainly not everybody, but many of their students become academicians, judges, or even Supreme Court justices. Perhaps the training needs of those students requires a primarily intellectual approach. I loved being a law student for that reason, but I quickly discovered after graduation that the practice of law is different. Law school is about looking at the facts presented and analyzing all the possible legal implications. In other words, what are all the possible legal results of that fact situation? Practicing law is about understanding the needs of your client and creating a path to the desired result. That is a very different way of thinking.
Many law schools now understand that just a doctrinal approach to the law is not sufficient and that the teaching of practical skills is necessary. The Startup Legal Garage is a step towards the next evolution of that idea by being a course that allows law students to experience some of what it is actually like to practice law. In that way, it’s a bit like the third year of medical school in which students follow doctors around the hospital. Medical students spend the whole year learning how different it is to diagnose and treat a live patient than it is to learn about that disease in the classroom. Law schools need to figure out how to provide a similarly robust real-world experience.
3. Are legal fees and services a common barrier to entry for female and minority founders?
Yes, I think they’re a barrier to entry for everybody. Legal services are very expensive. We published an article a year ago, Startups and Unmet Legal Needs 2016 Utah L. Rev 575, and we found that legal fees generally range from $15,000–40,000 for the basic needs of an emerging company. Law firms here in San Francisco understand how difficult that is to afford for entrepreneurs and they have created ways for founders to get their services early on. They do what’s called a deferred compensation agreement, often what that means is they’ll say to a young company “alright we’re going to have an agreement with you where we will perform up to $15,000 or $20,000 in legal services for free but if you ever get funded (at a certain level, say $750,000), you have to pay us back.” In other words, if your company fails you have gotten those services for free and you don’t have anything owed but if you make it, the lawyers want to be paid back. They do that as sort of a business development. If you were the lawyer in at the beginning of Google and Google remains your client, you’re happy to have given them that first $15,000 for free. Everybody knows that about 90% of startups fail so it’s an expensive thing for them to do but it’s hard to know in the very beginning who’s going to make it and who’s not. So San Francisco has lawyers have learned to accept the risk because there’s a chance of a huge payoff. We’ve actually tried to get lawyers from other parts of the country to work with us, and they are not as familiar with this idea of giving their services away for free. Lawyers don’t tend to do that.
4. What advice do you have for aspiring tech lawyers just entering law school?
It makes a difference to be in a community in which there is a lot of innovation and tech companies: Boston, NYC, Portland, Austin, Seattle, San Francisco, LA. If you ultimately want to work in those cities, it’s good to go to law school in one because there may be events and classes that incorporate some of the local startup community at the law school. Also there will be connections you make in law school that can help you later on in your career. I talked to a young graduate of Hastings who’s now an associate at a law firm here and she said one of the things she’s done that’s really helped her career is to become a regular at industry events. For example, if she wanted to develop a career in insurance law, she would go to events with insurance startups and learn their vocabulary, their interests and what their needs are. That really helps her when she gets a client in that area. She also may meet future clients at those events. If you sort of know what you’re interested in, go to be in a big enough city to have companies in that niche. You can meet people and gain more expertise outside of law school. Building a robust network is really what helps you through all of life.
5. As the first woman Editor-in-Chief of the Yale Law Journal and the founder/CEO of a White House award-winning safety app, you know a great deal about challenging the status quo. What are your hopes for tech?
Well obviously I’m not alone in saying it would be great if tech were more diverse — both in terms of gender as well as all the other areas. It would be nice if we didn’t have to think about it anymore, right? Whether you were a woman or gay or whatever, that’s got nothing to do with it. I suppose that’s our hope for the world in general and it would be nice if tech led the way. It seems to me that tech is so innovative in so many ways that these big companies like Google, Facebook, and Apple should be able to figure out how to help the diversity issue. San Francisco is a bit of a step ahead and gradually that will begin to change things but honestly it surprises me. I figured that when my daughters were out in the world that there would be no gender issues and, all these years later, there are. In some ways they’re worse really. So it’s very frustrating.
There are women coming at these issues from all different perspectives and I’m hoping that together there’s enough pressure to change what is at present still a circle of mostly white men. You have to figure out how to have a life and to be successful and work — that always seems to be a woman’s issue. It ought to be everybody’s issue. I think men are changing some but if you look at the startup world it’s about working all of the time and having nothing else but your company to think about and that does not lend itself to figuring out how to have a family. Women continue to leave law firms and tech firms because they can’t figure out a way to make it work and the burden is mostly on them. It’s frustrating how slow it has been to change. I thought it would have happened by now and clearly I was way off. I no longer know when it will happen but I think it’s going to have to happen. How, I don’t know.
To learn more about the Startup Legal Garage, please visit: http://innovation.uchastings.edu/focus-areas/startup-legal-garage/
“As tech remakes the world, women will miss the chance to affect the massive economic and social changes this fourth industrial revolution will bring.” — Susan Wojcicki, CEO of YouTube
The Forefront is an interview series featuring trailblazing women in tech. The series was created to shed light on the contributions and ambitions of women in tech, which will hopefully inspire more to join them in our fourth industrial revolution.