Interview with Doug Mandel of LinkedIn
Vol. 17
April 2017
Page
What sparked your interest to enter the entrepreneurial world in Silicon Valley?
Since the discussion is about entrepreneurship I think what I would say to start off with, and what's important about my background is I would say I was an entrepreneur before I was a lawyer. Entrepreneurship was something that was kind of natural for me in terms of an interest. I started my own photography business when I was 15 years old, and when I was in college I was involved with a group called The Association of Collegiate Entrepreneurs. So I was interested in entrepreneurship from an early age and I think that's important as a little bit of background. Ultimately and I think what's so interesting about your interview is yes obviously the most important Focus for here is lawyers role in helping entrepreneurs which is I think vital and in Silicon Valley we can talk about the entrepreneurial ecosystem and how lawyers can be helpful there. And that's one of the things I love about Silicon Valley. but I myself am also an entrepreneur and I launch my own Law Firm 16 years ago so I'm running a small business and I think in some ways that that's just imported from for the context of the interview.
How did your career begin and how did you get to be where you are now?
In terms of how I got to be where I am right now, which is ultimately working with entrepreneurs as clients, began in law school. I went to Tulane Law School. I didn't specialize in entrepreneurship in law school, but I was hired by a large law firm in San Francisco, Littler Mendelson, and I moved to San Francisco for that job and quickly fell in love with San Francisco. I was with Littler for 2 years and I was focused on employment law, which is what Littler Mendelson does, and I quickly became passionate about tech companies. I wanted to work more with other technology companies, but not just as an employment lawyer. So after 2 years I left Littler and went to Orrick, which is a larger law firm that has a bigger tech focus. I was there until 2000, which was right at the height of internet web 1.0.
Then I left Orrick around that time and joined my first start up, which was one of the first online photo-sharing companies. It was a company called E-Memories. For me this was a really pivotal moment in my career because I was transitioning from being a lawyer at a big law firm, in a specific practice area, to being the general counsel of a small startup company. It represented on one hand a huge amount of risk; I think I took a 50% pay cut; and what it gave me was like Harvard Business School because it was an opportunity to transition. It would be hard going from being an employment lawyer and litigator at Orrick to general counsel of a normal tech company. But for a company like E-Memories, it really needed a generalist and I positioned myself to the CEOs that that's what I was really going to be good at. My training as a lawyer until that point was perfect for jumping into a start-up and it was also, and I think this is important for the students to know, it was also a company that was being spun out of an incubator and the incubator already had a corporate lawyer that was helping the company. So I didn't have to be an expert on corporate law. It provided a way to kind of jump in and just essentially become a GC to a fast-growing startup. And what's really required there is being able to put out fires on a daily basis. But it also gave me the experience and the insight into what it's like to be working at a small company versus a big law firm. There's a huge difference. I went from having my own office at Orrick and a fancy building to a cube. But everybody had a cube. So now I'm not a service provider, I'm actually part of a team. I'm now on a management team. I now have to struggle with the other executives to figure out our business model and to address every known type of legal issue that was coming at us. And a lot of those issues were new, and hadn't been dealt with by anyone before such as privacy issues relating to photographs which had never been on the internet before. Everything from that to sweepstakes, to raising money, to international issues. It was absolutely fascinating as a lawyer and it also gave me the opportunity to start to develop expertise in different areas like contract negotiations. Things that you kind of need to know to work with startups and then begin to build a team of outside counsel. And interestingly enough, some of these lawyers I continue to work with. There's a lawyer that I ended up hiring when I was at E-Memories who, at the time, was an associate at a large law firm in New York who specialized in advertising issues. Now, 16 years later, she is a partner in the firm and we work together with three other companies that I am involved with.
So E-Memories went from zero pretty much to 20 million dollars, but then the company kind of went down as quickly as it went up. What happened later in 2000 was the economy fell apart. The stock market collapsed all of a sudden, and we had to sell the company. But, it was a priceless learning opportunity and I think it's really important for students to recognize that sometimes early in your career it's worth taking risks. Yes that was a failure from the sense that the company didn't make it. But it was an awesome, unbelievable opportunity that allowed me to transition to being perceived as a different type of lawyer. Usually when you're a young associate in a law firm you feel like you can't transition from litigation for example to corporate or from Capital markets to something else. But the reality is you can, and that's an important thing to recognize. And I did that, and this experience helped me do that.
So now it's a year later I had been at this company for a year and I don't have a job anymore. And I'm thinking, what do I do. I could have gone back to a big law firm, but I always wanted to start my own law firm and I basically did it in my kitchen. At the time I had kept my apartment in San Francisco, which was the smartest thing I've ever done, and I had a place in LA which was where the company was. I gave up that apartment because I couldn't afford two apartments, and I started my own law firm with the idea that I would provide outside general counsel services to start ups and work with CEOs and founders in employment law. I wanted to do those two things to start, and I had 2 clients one of which was my father, and no money, and it was kind of a low point of my life. But again an amazing opportunity for me, and now looking back on it as I think and I talk to other people who are thinking about starting their own businesses or starting their own law firms, I look back on that experience and say wow I did that at a point where I had nothing. And looking back it wasn't such a big deal. Yes I could have failed, but so what.
So I took another risk and moved back to San Francisco. Pretty quickly after I had moved back and gave up my place in Los Angeles I was connected with somebody who used to work for E-Memories who was now at a much bigger company which was a venture backed, unified messaging software company that was funded by Intel capital and GE Capital and they needed a general counsel. So I went in to interview for the job, and I remember saying I actually don't want to be your general counsel. I just started my own law firm, but I'll be your temporary general counsel, your outside general counsel. And the CEO said, who by the way later became and is today my partner in another business I helped start called Originate, which is a software company. But at that time he was the CEO and he said okay we'll do that. You're here for just 3 months and then you're gone. And that 3-month engagement, which by the way that company was in LA so now I had moved back, that 3-month engagement turned into a year-and-a-half. And every week I'd fly down to LA and that's what I did to start my business.
That client allowed me to make enough money to open my first office in San Francisco. While I was working with them, I started working with a number of other clients doing stuff on the employment side. We were doing litigation at that time. And then around 2002 I ended up going to visit a company called Seagate Technology, which is one of the largest disk driving makers in the world. They were my client when I was at Orrick. And the woman who was in charge of litigation was now in charge of all of corporate contracts. I went to tell her what I was doing and she said wow we need help in that area and she ended up hiring me and within a year Seagate became my biggest client. And that relationship was my biggest relationship for the next several years and where I was doing a lot of work with Seagate representing them in contract negotiations. I hired a number of lawyers who had been at big law firms who were experts at negotiating complex agreements. I myself would work a full day and then I supported a team in Asia where I would get on the phone in the evening and help them. Then right around 2003 was when LinkedIn was founded.
I was connected to the founder of LinkedIn, Reid Hoffman, by a mutual friend of ours who had been a friend of mine for years and had gone to college with Reid. Reid was starting LinkedIn and he met with me for coffee in Mountain View when he told me the idea for a LinkedIn in probably March of 2003. The company launched in May 2003 and I was hired in April 2003. When we met he basically said this book by Malcolm Gladwell where he is talking about connection and how people are connected to each other, I want to build a company related to that. That was the idea behind LinkedIn. So I was hired and I remember my first job as their lawyer, before the company even launched, was to help figure out how we could make sure that one of the company's cofounders who was from France could stay in this country. I'm not an immigration lawyer but it was my job to help answer that question and find the right people. I hired the right law firm to incorporate the company and I oversaw that process and advised them on raising their next round of funding and then they were just a client. And the reason I say just a client is because it's important to recognize that even though LinkedIn today is this massive company, it takes time to build. So 2003-2005 were relatively quiet years for that company. And in terms of the work that we were doing, during that time LinkedIn raised their A round of financing and the venture Capital firm that raised that money said, okay now you've got all this money you have to hire this law firm which was a bigger law firm. And that always happens with small firms so now we are no longer the primary firm for LinkedIn but we're still in the background.
In 2007, my law firm at that point had grown so I had a team of lawyers, some of which were employment lawyers, some were corporate contract lawyers or I should say tech transaction lawyers. And Reid was invited to give a speech at the Entrepreneurs Organization conference. By that time I was on the board of EO for the San Francisco chapter. EO is an entrepreneur organization that's global and you have to be invited and you have to have at least a million dollars in Revenue and be the founder of the business to be in it. I was one of three lawyers in the San Francisco chapter and they said hey you know Reid Hoffman can you ask him to speak at our conference. So I asked him to speak and he did speak. And the next day he called me up and he said things are starting to really scale at the company and we have outside counsel but we don't have anybody in house. Could you come in for one day a week, I think that's all we need is one day a week to help manage what's going on from a legal perspective. So I stepped in in 2007 and it was originally supposed to be one day, but that quickly became 7 days a week in terms of what was happening. And that time Reid was no longer the CEO. They had a new CEO and I knew that he ultimately would want to hire his own general counsel so I said I'm just here to help. But then the new CEO said no you cannot leave until we finish series D of financing which I was the main legal point for the company. And there were a lot of other things that we were doing. I was responsible for helping open their London office. All the contracts were exploding. The due diligence for the next financing was massive. There was a new legal issue every day, putting out fires every day. And my final job was to hire the next general counsel, which would be somebody who could take the company public. And I think this is an important distinction for your readers that there are two different types of GCs. There are private company GCs and there are public company GCs. This isn't always the case, but ideally for a public company GC you want someone with experience in that area. So I hired a woman who replaced me in 2008 towards the end of 2008 and then I went back to my Law Firm.
And that was an amazing experience. And I think it's funny because I was asked to speak last year by the new GC and I came to speak about what the early days of LinkedIn were like. And if you could imagine, to set the stage, when I was wearing the GC hat, the company was a hundred and fifty people and when I left it was 500 people. When I came back to speak to the company was about five thousand people. And I'm on video monitors all around the world to give perspective back to what it was like when I was there. It was just me in the legal department. There wasn't budget to hire an assistant for me, so I brought my own assistant to the company and I paid her. And that's how different it was. And it was very gratifying to talk, and the GC had asked me, what's the biggest lesson that you learned and the biggest take away from that experience in terms of being a lawyer at LinkedIn. And I don't feel that I gave a great answer at that point. But then I saw him later and I told him that I really regretted my answer because after having several months to think about it I have a better answer. And I think the answer was the people. I think another really good point of advice for students is to always be mindful of the fact that the people who you work with in any job later become part of your own network. And those people can be very valuable from a networking perspective both as friends and colleagues. And when I was at Orrick for example, Orrick was one of the first law firm that the time which was in 1995, that provided lunch for all of its lawyers. And I always regret that I didn't have lunch with more people there because now a lot of those people are very important lawyers. Luckily I maintain connections with a bunch of them, but I wish I had known even more of them. At LinkedIn I'm very thankful that the people who I worked with over those two years I've stayed in touch with. And some of them are my very very best friends and they've all gone on to do really interesting things. And it's been one of the best experiences of my life of being able to build relationships with people like that. I think a lot of lawyers are very narrow in their focus and in their relationships and they just go to legal conferences they hang out with other lawyers. But they're not building relationships with people who are building businesses, who are true entrepreneurs and I'm grateful that my job allows me to do that.
That is interesting advice because we are given advice to network even now while we are in law school, including with our classmates.
Absolutely. Since leaving LinkedIn I've spoken to many law schools (unfortunately I haven't made it to Davis), but all the Bay Area law schools all about this concept which is really what LinkedIn is about… professional brand management, and how to build relationships with people both online and offline. I think the other thing that I would advise students to recognize is everybody that you meet is important to you in terms of who their second degree network. For example, if you and I are connected, and this is what I speak about, were first-degree connections. But by connecting to me, your connected to all my connections which are second degree then to you. And the one thing that I've learned in running my own business, is everything in life comes from the second degree, not the first degree. Most likely it's going to be the second degree. Most likely the person who you marry not necessarily is going to come from somebody who you know, it's going to be from one of your friends who was like, you should meet this person. Same with clients. Most of my clients come from the second degree. It's people who know me who say to someone else, you should talk to Doug.
So for example, the first thing you want to do is connect to all the people you possibly could. If I'm a law student, every law student is actually part of a couple important networks. Where you went to college. Where you are going to law school. The people who you went to high school with. But then a whole bunch of other stuff like maybe your church, your temple, maybe you play sports, or maybe your youth group. Whatever your connected into, you get all those people on LinkedIn. Then do a search of let's say you want a summer associate job and so you do a search to see every lawyer in your network who's in the second degree who you know who's connected to me by 2 degrees all over the country. So if I had run th search if LinkedIn existed when I was a law student, and I'm connected to my mom who is connected to Ben the lawyer, I would have seen Ben. And I would have been reached out strategically by calling my mom and saying, hey Mom, I see you're connected to Ben. How do you know Ben? And then I would ask could you connect me to Ben. And I'm giving this example because that's actually how I got my first job as a first-year law student. That's how I got my first job. It was that my mother knew a person who happened to be one of the top lawyers in Miami. I was just a first-year law student so I didn't have any ability to really get hired by a big law firm. And I went to work for him over the summer for $10 an hour and that ended up helping me get a job at a real law firm in the future. And that's the second bit of advice I would say is that law students need to be really mindful of what their network is and how to utilize the network. Just having the network isn't enough. You have to figure out then how to reach out to those people and how to search for those people.
What were some of your daily activities while you worked as the general counsel at LinkedIn?
The first thing to understand is when you're an in-house counsel at a company, your role is still to be a service provider, but you're really part of the company. You're there to work with all of these other business people and basically help them do what they're trying to do. On a regular daily basis we could be dealing with a whole range of contracts, which is a huge part of that business. I had people who worked for me who just did contract negotiations supporting the business team at LinkedIn for their revenue or the contracts that help generate revenue for them. Then we had routine contracts like going into a new data center or buying computers. Then we had complex business development contracts like deals we were doing with the New York Times, CNBC, stuff like that. And I'm overseeing all of that. Then we have just every possible legal issue that our internal people are facing. So for example, everything from corporate issues related to us raising money, which requires us going through a due diligence process and providing information. And that's a negotiation with investors too, looking at patenting information, patenting our products, and patenting our intellectual property; monitoring and protecting our brand, which on a daily basis could include anywhere in the world. There might be people who are using LinkedIn's logo, or trying to start a business with LinkedIn in its name. At that time, early in the company, we were still going after people who were trying to steal our domain names and getting those back from people who took them and were holding them for ransom. We were also finding people who were violating our terms of service and enforcing them. There were countless privacy issues in terms of making sure that we were complying with privacy rules as we were going into Europe for example. We were working with the business people strategically as we were thinking about going into new areas of business in the early days of LinkedIn. And that's a really exciting part of the way that general counsel can play a role as an advisor that an outside counsel can't in the same way because you're there as the business people are formulating these ideas and coming up with them. I was on the executive team so I could be in these meetings as we were thinking as a team, what is our business going to look like a year from now, 6 months from now. And once I understood what they wanted to do, I had to think about how they could then do it in the best way possible. And I think that brings up another, in its most simplistic form the true job of the general counsel. So the first part of the job is advice. The first part of the job in its simplest form is advice relating to risk mitigation. So you're the CEO of the company and you say, guess what, we want to do this … whatever this is. So then as the lawyer you have to figure out what are the legal ramifications of that. Then it's your job to go back and advise the CEO about that, and often times the lawyer, especially at a fast rate start up where the business people are pushing the envelope in terms of an area of a business that never existed before. For example, right now there are so many interesting issues with payment companies like Stripe that people are facing all over the world. There isn't a lot of law there, so the lawyers are trying to figure out what you can do and what you can't do to make sure you're compliant or to mitigate risk. So then the lawyer comes back to the CEO or the GC comes back and says, you know I've looked at this and I think that there's a lot of risk associated with this contract or something like that, meaning it's not very good for the company. And so from a risk perspective, there's a lot of risk. But that's the lawyer's job to say that at that time, and then the CEO's job is to say great we're going to do it anyway or okay, we're going to do something different. And once the CEO decides what they want to do, it's no longer the lawyer's job to advise but to then help them carry out whatever the CEO wants to do. A good GC is going to take what the CEO wants to do, and is going to take whatever it is and then figure out how they are going to get it done. The lawyer can help the company do what it wants to do in the best possible way to achieve the goals of the company, obviously in the best legal way, and that's their job. Sometimes the lawyer has to say you cannot do what you want to do, but a lot of times you have to figure out how to do those things and that's a very exciting thing about working with entrepreneurs.
You mentioned in a lot of your work you are blazing a new trail within the law. Where do you go to find the answers to those issues?
Well, it's the job of a good GC to find the best legal resource, I believe, in the world on that issue. And it's not enough to just go to your standard law firm. Sometimes it is, but often times maybe you want to find the best lawyer in the world or the best lawyer that you can get to, to help you with that particular issue. And the important thing to recognize too is that no law firm has all the answers. So for example, right before you walked in the door I was on the phone with a lawyer from Germany and a client who is working with a tech company as were thinking how to roll out our strategy for when this company goes into Europe. And we're specifically thinking about privacy because there's a lot of privacy rules in Europe that didn't really exist when I started practicing law. So it's my job to find the right experts and then also to manage those experts too. And I will put them in touch with the company so then they can figure that out. I also want to budget. I want to figure out how much this is going to cost and that we record everything we do. Then I want to talk about how we're going to make all of that happen. But that's kind of the job. And ultimately the other thing is, once I get that information from those lawyers then it's my job to go back to the client and help them implement the advice which is another thing that is different between being an in-house lawyer and an outside counsel. The outside counsel are the experts in the area and are giving advice on the phone saying OK, to comply with this privacy requirement you need to do this this and this. And then they hang up the phone and they're done, and now the in-house lawyer is sitting there with the business person and asking the question, how do we do that. Do we have to redo our product? If you're making hardware, do we do it differently? Do we build something into our terms of service and privacy policy to protect us? Do we build a safeguard and software to make sure that were not collecting that type of information for example. And that's a very exciting part of the job and a very different thing than just giving the advice. It's actually playing a role, working side-by-side with the business person to do what the company needs to have done.
Why do you prefer being the general counsel to many firms as you are now over working in the context of a big law firm as you originally did?
That's a fantastic question. First what I like about being at a small firm… Right now my firm is very small. It's me, and I have two senior lawyers I work with, and then when we need other people we hire them first specific projects. First of all I like the business side of running a law firm. I love the autonomy of it. I'm completely in control of what I do and I think that is a big part of probably why I'm happy. Not that you can't have autonomy at a big law firm because the partners who actually have business, they have a large degree of autonomy. But they still have a lot more requirements on their time than I do. Everything's a trade-off though, they make a lot more money than I do. But in the role that I'm in I'm able to control my schedule. So that allows me, for example, to be involved with other businesses. I'm an advisor to a couple different businesses, more as a lawyer than as a business person. I'm an investor in several startups. I am involved in a number of things in the community from a non-profit or philanthropic perspective. And I enjoy all of that, and I get to make a lot of the decisions on what I'm doing with my time. I still serve my clients, so I have requirements on my time based on that, but I am the one who decides who I'm working with and largely when I'm working. I also have complete freedom to work with entrepreneurs in ways that often times are harder for bigger law firms. So for example, if I want to take equity in my clients, or I get paid in stock. Some big firms do get paid in stock as well, but I can do it at a much earlier stage if I want to. And I don't have pressure in terms of filling a certain amount of time or hours. I can work with clients in different ways. I can get paid on a flat-fee basis or I can just write off my time because I'm really interested in what you're doing and I just want to help you and to build my relationship with you. That's harder to do in a bigger law firm.
When I was an associate for Orrick or Littler I actually had really good experiences as an associate at those places. I think being an associate at those firms is very different than being a partner at those firms so if I went back to a big law firm someday, which I'm not necessarily ruling out; it would be hard for me because on the one hand the advantage of being in a bigger law for a man I'm lucky compared to a lot of my friends who are at big law firms because I have all my own clients. I have deep, deep relationships and a big network so if I went back to a big law firm I would have more control over what I'm doing than a partner who didn't have that network and I would also have other things like resources and a whole team of people. But I've been very happy in this role doing what I'm doing and I would have never been able to step in with LinkedIn for 2 years for example, or even have LinkedIn as a client in those early days. So it's all a trade-off. But I also wouldn't have had those opportunities if I hadn't have been at a big law firm early on; or at least those specific ones because that helped me prepare. I'm not saying that you must be at a big law firm to be a GC. I have several friends who are working at tech companies who went a different path. I also know that some lawyers who ended up at Facebook, for example went into government first and then went to Facebook. There's many different paths to those companies, and this is just the one that worked for me.
Vol. 17
April 2017
Page
What sparked your interest to enter the entrepreneurial world in Silicon Valley?
Since the discussion is about entrepreneurship I think what I would say to start off with, and what's important about my background is I would say I was an entrepreneur before I was a lawyer. Entrepreneurship was something that was kind of natural for me in terms of an interest. I started my own photography business when I was 15 years old, and when I was in college I was involved with a group called The Association of Collegiate Entrepreneurs. So I was interested in entrepreneurship from an early age and I think that's important as a little bit of background. Ultimately and I think what's so interesting about your interview is yes obviously the most important Focus for here is lawyers role in helping entrepreneurs which is I think vital and in Silicon Valley we can talk about the entrepreneurial ecosystem and how lawyers can be helpful there. And that's one of the things I love about Silicon Valley. but I myself am also an entrepreneur and I launch my own Law Firm 16 years ago so I'm running a small business and I think in some ways that that's just imported from for the context of the interview.
How did your career begin and how did you get to be where you are now?
In terms of how I got to be where I am right now, which is ultimately working with entrepreneurs as clients, began in law school. I went to Tulane Law School. I didn't specialize in entrepreneurship in law school, but I was hired by a large law firm in San Francisco, Littler Mendelson, and I moved to San Francisco for that job and quickly fell in love with San Francisco. I was with Littler for 2 years and I was focused on employment law, which is what Littler Mendelson does, and I quickly became passionate about tech companies. I wanted to work more with other technology companies, but not just as an employment lawyer. So after 2 years I left Littler and went to Orrick, which is a larger law firm that has a bigger tech focus. I was there until 2000, which was right at the height of internet web 1.0.
Then I left Orrick around that time and joined my first start up, which was one of the first online photo-sharing companies. It was a company called E-Memories. For me this was a really pivotal moment in my career because I was transitioning from being a lawyer at a big law firm, in a specific practice area, to being the general counsel of a small startup company. It represented on one hand a huge amount of risk; I think I took a 50% pay cut; and what it gave me was like Harvard Business School because it was an opportunity to transition. It would be hard going from being an employment lawyer and litigator at Orrick to general counsel of a normal tech company. But for a company like E-Memories, it really needed a generalist and I positioned myself to the CEOs that that's what I was really going to be good at. My training as a lawyer until that point was perfect for jumping into a start-up and it was also, and I think this is important for the students to know, it was also a company that was being spun out of an incubator and the incubator already had a corporate lawyer that was helping the company. So I didn't have to be an expert on corporate law. It provided a way to kind of jump in and just essentially become a GC to a fast-growing startup. And what's really required there is being able to put out fires on a daily basis. But it also gave me the experience and the insight into what it's like to be working at a small company versus a big law firm. There's a huge difference. I went from having my own office at Orrick and a fancy building to a cube. But everybody had a cube. So now I'm not a service provider, I'm actually part of a team. I'm now on a management team. I now have to struggle with the other executives to figure out our business model and to address every known type of legal issue that was coming at us. And a lot of those issues were new, and hadn't been dealt with by anyone before such as privacy issues relating to photographs which had never been on the internet before. Everything from that to sweepstakes, to raising money, to international issues. It was absolutely fascinating as a lawyer and it also gave me the opportunity to start to develop expertise in different areas like contract negotiations. Things that you kind of need to know to work with startups and then begin to build a team of outside counsel. And interestingly enough, some of these lawyers I continue to work with. There's a lawyer that I ended up hiring when I was at E-Memories who, at the time, was an associate at a large law firm in New York who specialized in advertising issues. Now, 16 years later, she is a partner in the firm and we work together with three other companies that I am involved with.
So E-Memories went from zero pretty much to 20 million dollars, but then the company kind of went down as quickly as it went up. What happened later in 2000 was the economy fell apart. The stock market collapsed all of a sudden, and we had to sell the company. But, it was a priceless learning opportunity and I think it's really important for students to recognize that sometimes early in your career it's worth taking risks. Yes that was a failure from the sense that the company didn't make it. But it was an awesome, unbelievable opportunity that allowed me to transition to being perceived as a different type of lawyer. Usually when you're a young associate in a law firm you feel like you can't transition from litigation for example to corporate or from Capital markets to something else. But the reality is you can, and that's an important thing to recognize. And I did that, and this experience helped me do that.
So now it's a year later I had been at this company for a year and I don't have a job anymore. And I'm thinking, what do I do. I could have gone back to a big law firm, but I always wanted to start my own law firm and I basically did it in my kitchen. At the time I had kept my apartment in San Francisco, which was the smartest thing I've ever done, and I had a place in LA which was where the company was. I gave up that apartment because I couldn't afford two apartments, and I started my own law firm with the idea that I would provide outside general counsel services to start ups and work with CEOs and founders in employment law. I wanted to do those two things to start, and I had 2 clients one of which was my father, and no money, and it was kind of a low point of my life. But again an amazing opportunity for me, and now looking back on it as I think and I talk to other people who are thinking about starting their own businesses or starting their own law firms, I look back on that experience and say wow I did that at a point where I had nothing. And looking back it wasn't such a big deal. Yes I could have failed, but so what.
So I took another risk and moved back to San Francisco. Pretty quickly after I had moved back and gave up my place in Los Angeles I was connected with somebody who used to work for E-Memories who was now at a much bigger company which was a venture backed, unified messaging software company that was funded by Intel capital and GE Capital and they needed a general counsel. So I went in to interview for the job, and I remember saying I actually don't want to be your general counsel. I just started my own law firm, but I'll be your temporary general counsel, your outside general counsel. And the CEO said, who by the way later became and is today my partner in another business I helped start called Originate, which is a software company. But at that time he was the CEO and he said okay we'll do that. You're here for just 3 months and then you're gone. And that 3-month engagement, which by the way that company was in LA so now I had moved back, that 3-month engagement turned into a year-and-a-half. And every week I'd fly down to LA and that's what I did to start my business.
That client allowed me to make enough money to open my first office in San Francisco. While I was working with them, I started working with a number of other clients doing stuff on the employment side. We were doing litigation at that time. And then around 2002 I ended up going to visit a company called Seagate Technology, which is one of the largest disk driving makers in the world. They were my client when I was at Orrick. And the woman who was in charge of litigation was now in charge of all of corporate contracts. I went to tell her what I was doing and she said wow we need help in that area and she ended up hiring me and within a year Seagate became my biggest client. And that relationship was my biggest relationship for the next several years and where I was doing a lot of work with Seagate representing them in contract negotiations. I hired a number of lawyers who had been at big law firms who were experts at negotiating complex agreements. I myself would work a full day and then I supported a team in Asia where I would get on the phone in the evening and help them. Then right around 2003 was when LinkedIn was founded.
I was connected to the founder of LinkedIn, Reid Hoffman, by a mutual friend of ours who had been a friend of mine for years and had gone to college with Reid. Reid was starting LinkedIn and he met with me for coffee in Mountain View when he told me the idea for a LinkedIn in probably March of 2003. The company launched in May 2003 and I was hired in April 2003. When we met he basically said this book by Malcolm Gladwell where he is talking about connection and how people are connected to each other, I want to build a company related to that. That was the idea behind LinkedIn. So I was hired and I remember my first job as their lawyer, before the company even launched, was to help figure out how we could make sure that one of the company's cofounders who was from France could stay in this country. I'm not an immigration lawyer but it was my job to help answer that question and find the right people. I hired the right law firm to incorporate the company and I oversaw that process and advised them on raising their next round of funding and then they were just a client. And the reason I say just a client is because it's important to recognize that even though LinkedIn today is this massive company, it takes time to build. So 2003-2005 were relatively quiet years for that company. And in terms of the work that we were doing, during that time LinkedIn raised their A round of financing and the venture Capital firm that raised that money said, okay now you've got all this money you have to hire this law firm which was a bigger law firm. And that always happens with small firms so now we are no longer the primary firm for LinkedIn but we're still in the background.
In 2007, my law firm at that point had grown so I had a team of lawyers, some of which were employment lawyers, some were corporate contract lawyers or I should say tech transaction lawyers. And Reid was invited to give a speech at the Entrepreneurs Organization conference. By that time I was on the board of EO for the San Francisco chapter. EO is an entrepreneur organization that's global and you have to be invited and you have to have at least a million dollars in Revenue and be the founder of the business to be in it. I was one of three lawyers in the San Francisco chapter and they said hey you know Reid Hoffman can you ask him to speak at our conference. So I asked him to speak and he did speak. And the next day he called me up and he said things are starting to really scale at the company and we have outside counsel but we don't have anybody in house. Could you come in for one day a week, I think that's all we need is one day a week to help manage what's going on from a legal perspective. So I stepped in in 2007 and it was originally supposed to be one day, but that quickly became 7 days a week in terms of what was happening. And that time Reid was no longer the CEO. They had a new CEO and I knew that he ultimately would want to hire his own general counsel so I said I'm just here to help. But then the new CEO said no you cannot leave until we finish series D of financing which I was the main legal point for the company. And there were a lot of other things that we were doing. I was responsible for helping open their London office. All the contracts were exploding. The due diligence for the next financing was massive. There was a new legal issue every day, putting out fires every day. And my final job was to hire the next general counsel, which would be somebody who could take the company public. And I think this is an important distinction for your readers that there are two different types of GCs. There are private company GCs and there are public company GCs. This isn't always the case, but ideally for a public company GC you want someone with experience in that area. So I hired a woman who replaced me in 2008 towards the end of 2008 and then I went back to my Law Firm.
And that was an amazing experience. And I think it's funny because I was asked to speak last year by the new GC and I came to speak about what the early days of LinkedIn were like. And if you could imagine, to set the stage, when I was wearing the GC hat, the company was a hundred and fifty people and when I left it was 500 people. When I came back to speak to the company was about five thousand people. And I'm on video monitors all around the world to give perspective back to what it was like when I was there. It was just me in the legal department. There wasn't budget to hire an assistant for me, so I brought my own assistant to the company and I paid her. And that's how different it was. And it was very gratifying to talk, and the GC had asked me, what's the biggest lesson that you learned and the biggest take away from that experience in terms of being a lawyer at LinkedIn. And I don't feel that I gave a great answer at that point. But then I saw him later and I told him that I really regretted my answer because after having several months to think about it I have a better answer. And I think the answer was the people. I think another really good point of advice for students is to always be mindful of the fact that the people who you work with in any job later become part of your own network. And those people can be very valuable from a networking perspective both as friends and colleagues. And when I was at Orrick for example, Orrick was one of the first law firm that the time which was in 1995, that provided lunch for all of its lawyers. And I always regret that I didn't have lunch with more people there because now a lot of those people are very important lawyers. Luckily I maintain connections with a bunch of them, but I wish I had known even more of them. At LinkedIn I'm very thankful that the people who I worked with over those two years I've stayed in touch with. And some of them are my very very best friends and they've all gone on to do really interesting things. And it's been one of the best experiences of my life of being able to build relationships with people like that. I think a lot of lawyers are very narrow in their focus and in their relationships and they just go to legal conferences they hang out with other lawyers. But they're not building relationships with people who are building businesses, who are true entrepreneurs and I'm grateful that my job allows me to do that.
That is interesting advice because we are given advice to network even now while we are in law school, including with our classmates.
Absolutely. Since leaving LinkedIn I've spoken to many law schools (unfortunately I haven't made it to Davis), but all the Bay Area law schools all about this concept which is really what LinkedIn is about… professional brand management, and how to build relationships with people both online and offline. I think the other thing that I would advise students to recognize is everybody that you meet is important to you in terms of who their second degree network. For example, if you and I are connected, and this is what I speak about, were first-degree connections. But by connecting to me, your connected to all my connections which are second degree then to you. And the one thing that I've learned in running my own business, is everything in life comes from the second degree, not the first degree. Most likely it's going to be the second degree. Most likely the person who you marry not necessarily is going to come from somebody who you know, it's going to be from one of your friends who was like, you should meet this person. Same with clients. Most of my clients come from the second degree. It's people who know me who say to someone else, you should talk to Doug.
So for example, the first thing you want to do is connect to all the people you possibly could. If I'm a law student, every law student is actually part of a couple important networks. Where you went to college. Where you are going to law school. The people who you went to high school with. But then a whole bunch of other stuff like maybe your church, your temple, maybe you play sports, or maybe your youth group. Whatever your connected into, you get all those people on LinkedIn. Then do a search of let's say you want a summer associate job and so you do a search to see every lawyer in your network who's in the second degree who you know who's connected to me by 2 degrees all over the country. So if I had run th search if LinkedIn existed when I was a law student, and I'm connected to my mom who is connected to Ben the lawyer, I would have seen Ben. And I would have been reached out strategically by calling my mom and saying, hey Mom, I see you're connected to Ben. How do you know Ben? And then I would ask could you connect me to Ben. And I'm giving this example because that's actually how I got my first job as a first-year law student. That's how I got my first job. It was that my mother knew a person who happened to be one of the top lawyers in Miami. I was just a first-year law student so I didn't have any ability to really get hired by a big law firm. And I went to work for him over the summer for $10 an hour and that ended up helping me get a job at a real law firm in the future. And that's the second bit of advice I would say is that law students need to be really mindful of what their network is and how to utilize the network. Just having the network isn't enough. You have to figure out then how to reach out to those people and how to search for those people.
What were some of your daily activities while you worked as the general counsel at LinkedIn?
The first thing to understand is when you're an in-house counsel at a company, your role is still to be a service provider, but you're really part of the company. You're there to work with all of these other business people and basically help them do what they're trying to do. On a regular daily basis we could be dealing with a whole range of contracts, which is a huge part of that business. I had people who worked for me who just did contract negotiations supporting the business team at LinkedIn for their revenue or the contracts that help generate revenue for them. Then we had routine contracts like going into a new data center or buying computers. Then we had complex business development contracts like deals we were doing with the New York Times, CNBC, stuff like that. And I'm overseeing all of that. Then we have just every possible legal issue that our internal people are facing. So for example, everything from corporate issues related to us raising money, which requires us going through a due diligence process and providing information. And that's a negotiation with investors too, looking at patenting information, patenting our products, and patenting our intellectual property; monitoring and protecting our brand, which on a daily basis could include anywhere in the world. There might be people who are using LinkedIn's logo, or trying to start a business with LinkedIn in its name. At that time, early in the company, we were still going after people who were trying to steal our domain names and getting those back from people who took them and were holding them for ransom. We were also finding people who were violating our terms of service and enforcing them. There were countless privacy issues in terms of making sure that we were complying with privacy rules as we were going into Europe for example. We were working with the business people strategically as we were thinking about going into new areas of business in the early days of LinkedIn. And that's a really exciting part of the way that general counsel can play a role as an advisor that an outside counsel can't in the same way because you're there as the business people are formulating these ideas and coming up with them. I was on the executive team so I could be in these meetings as we were thinking as a team, what is our business going to look like a year from now, 6 months from now. And once I understood what they wanted to do, I had to think about how they could then do it in the best way possible. And I think that brings up another, in its most simplistic form the true job of the general counsel. So the first part of the job is advice. The first part of the job in its simplest form is advice relating to risk mitigation. So you're the CEO of the company and you say, guess what, we want to do this … whatever this is. So then as the lawyer you have to figure out what are the legal ramifications of that. Then it's your job to go back and advise the CEO about that, and often times the lawyer, especially at a fast rate start up where the business people are pushing the envelope in terms of an area of a business that never existed before. For example, right now there are so many interesting issues with payment companies like Stripe that people are facing all over the world. There isn't a lot of law there, so the lawyers are trying to figure out what you can do and what you can't do to make sure you're compliant or to mitigate risk. So then the lawyer comes back to the CEO or the GC comes back and says, you know I've looked at this and I think that there's a lot of risk associated with this contract or something like that, meaning it's not very good for the company. And so from a risk perspective, there's a lot of risk. But that's the lawyer's job to say that at that time, and then the CEO's job is to say great we're going to do it anyway or okay, we're going to do something different. And once the CEO decides what they want to do, it's no longer the lawyer's job to advise but to then help them carry out whatever the CEO wants to do. A good GC is going to take what the CEO wants to do, and is going to take whatever it is and then figure out how they are going to get it done. The lawyer can help the company do what it wants to do in the best possible way to achieve the goals of the company, obviously in the best legal way, and that's their job. Sometimes the lawyer has to say you cannot do what you want to do, but a lot of times you have to figure out how to do those things and that's a very exciting thing about working with entrepreneurs.
You mentioned in a lot of your work you are blazing a new trail within the law. Where do you go to find the answers to those issues?
Well, it's the job of a good GC to find the best legal resource, I believe, in the world on that issue. And it's not enough to just go to your standard law firm. Sometimes it is, but often times maybe you want to find the best lawyer in the world or the best lawyer that you can get to, to help you with that particular issue. And the important thing to recognize too is that no law firm has all the answers. So for example, right before you walked in the door I was on the phone with a lawyer from Germany and a client who is working with a tech company as were thinking how to roll out our strategy for when this company goes into Europe. And we're specifically thinking about privacy because there's a lot of privacy rules in Europe that didn't really exist when I started practicing law. So it's my job to find the right experts and then also to manage those experts too. And I will put them in touch with the company so then they can figure that out. I also want to budget. I want to figure out how much this is going to cost and that we record everything we do. Then I want to talk about how we're going to make all of that happen. But that's kind of the job. And ultimately the other thing is, once I get that information from those lawyers then it's my job to go back to the client and help them implement the advice which is another thing that is different between being an in-house lawyer and an outside counsel. The outside counsel are the experts in the area and are giving advice on the phone saying OK, to comply with this privacy requirement you need to do this this and this. And then they hang up the phone and they're done, and now the in-house lawyer is sitting there with the business person and asking the question, how do we do that. Do we have to redo our product? If you're making hardware, do we do it differently? Do we build something into our terms of service and privacy policy to protect us? Do we build a safeguard and software to make sure that were not collecting that type of information for example. And that's a very exciting part of the job and a very different thing than just giving the advice. It's actually playing a role, working side-by-side with the business person to do what the company needs to have done.
Why do you prefer being the general counsel to many firms as you are now over working in the context of a big law firm as you originally did?
That's a fantastic question. First what I like about being at a small firm… Right now my firm is very small. It's me, and I have two senior lawyers I work with, and then when we need other people we hire them first specific projects. First of all I like the business side of running a law firm. I love the autonomy of it. I'm completely in control of what I do and I think that is a big part of probably why I'm happy. Not that you can't have autonomy at a big law firm because the partners who actually have business, they have a large degree of autonomy. But they still have a lot more requirements on their time than I do. Everything's a trade-off though, they make a lot more money than I do. But in the role that I'm in I'm able to control my schedule. So that allows me, for example, to be involved with other businesses. I'm an advisor to a couple different businesses, more as a lawyer than as a business person. I'm an investor in several startups. I am involved in a number of things in the community from a non-profit or philanthropic perspective. And I enjoy all of that, and I get to make a lot of the decisions on what I'm doing with my time. I still serve my clients, so I have requirements on my time based on that, but I am the one who decides who I'm working with and largely when I'm working. I also have complete freedom to work with entrepreneurs in ways that often times are harder for bigger law firms. So for example, if I want to take equity in my clients, or I get paid in stock. Some big firms do get paid in stock as well, but I can do it at a much earlier stage if I want to. And I don't have pressure in terms of filling a certain amount of time or hours. I can work with clients in different ways. I can get paid on a flat-fee basis or I can just write off my time because I'm really interested in what you're doing and I just want to help you and to build my relationship with you. That's harder to do in a bigger law firm.
When I was an associate for Orrick or Littler I actually had really good experiences as an associate at those places. I think being an associate at those firms is very different than being a partner at those firms so if I went back to a big law firm someday, which I'm not necessarily ruling out; it would be hard for me because on the one hand the advantage of being in a bigger law for a man I'm lucky compared to a lot of my friends who are at big law firms because I have all my own clients. I have deep, deep relationships and a big network so if I went back to a big law firm I would have more control over what I'm doing than a partner who didn't have that network and I would also have other things like resources and a whole team of people. But I've been very happy in this role doing what I'm doing and I would have never been able to step in with LinkedIn for 2 years for example, or even have LinkedIn as a client in those early days. So it's all a trade-off. But I also wouldn't have had those opportunities if I hadn't have been at a big law firm early on; or at least those specific ones because that helped me prepare. I'm not saying that you must be at a big law firm to be a GC. I have several friends who are working at tech companies who went a different path. I also know that some lawyers who ended up at Facebook, for example went into government first and then went to Facebook. There's many different paths to those companies, and this is just the one that worked for me.