Lawyers Court Startups at Valley Incubator

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                                                                                              www.dailyjournal.com

                                                    WEDNESDAY, JUNE 30 ,2010


   Lawyers Court Startups at Valley Incubator
Offering Legal Advice in
Hopes Of Turning the Next
Big Thing Into Clients
By Jill Redhage
Daily Journal Staff Writer

   Like the investors and entrepreneurs
they counsel, Silicon Valley startup
lawyers succeed by taking risks. That
means spending time counseling fledgling
companies now in a bet their investment
will pay off with loads of legal business
later.
   In recent years, a handful of programs
similar to the technology incubators
of the late 1990s have emerged, giving
some Valley lawyers direct access to the                                                                             TODD ROGERS/ Daily Journal
potential tech successes of the future.      Hanson Bridgett corporate partner Teresa Pahl at the Plug and Play Tech Center in Sunnyvale.
Through strategic partnerships with
organizations like Sunnyvale-based Plug      among unsupported startups, according            said he met lawyers from several of the
and Play Tech Center, more lawyers are       to the company’s chief operating officer         law firms holding office hours at Plug
gambling their time on companies that        Kayvan Baroumand.                                and Play and chose to take his business
have built-in support systems to improve       Plug and Play’s founders call it a             to Rumberger at Greenberg Traurig,
their chances of success.                    “business accelerator,” not an incubator,        who has since re-drafted Civic Speak’s
   The challenge then is for lawyers to      in part because office space is not traded       incorporation documents for a fee. Carlson
make connections that stick once the         for equity in the startup like it was by         said he now recommends Greenberg
companies get off the ground.                tech incubators a decade ago. In addition        Traurig to other entrepreneurs.
   “I can’t say there’s a direct quid pro    to rental office space, the all-inclusive           His law firm choice was based on the
quo,” said Greenberg Traurig shareholder     environment      provides    receptionists,      firm’s reputation and reach, but also its
Todd Rumberger, who offers legal advice      security, maintenance, a gym, conference         connections to others in the Valley.
to startups at Plug and Play. “It’s not      rooms, a cafeteria, I.T. support and a data         “The best place you can network these
about trading time and trying to get a       center, among other offerings. The startups      days is with your bankers and lawyers,”
direct commitment for work. This is          also get introduced to potential investors       Carlson said.
networking.”                                 and corporate partners as well as lawyers.          Startup lawyers are also offering their
   Greenberg Traurig is one of three law       “Their mission is to create an                 services at Mountain View-based Y
firms, along with Orrick, Herrington &       atmosphere where these companies have            Combinator, a venture firm that provides
Sutcliffe and Hanson Bridgett, that pay a    one-stop shopping for their needs to help        seed funding, counseling and legal support
fee to enter into a partnership with Plug    these companies get up on their feet,” said      to its startups over a three-month period. It
and Play. In turn, these firms are able to   Teresa Pahl, a corporate lawyer in Hanson        has teamed with Palo Alto-based Wilson
offer regular office hours to more than      Bridgett’s Foster City office who offers         Sonsini Goodrich & Rosati to provide
300 technology startups housed in the        legal advice at Plug and Play.                   its mentees equity financing documents
organization’s offices in Sunnyvale, Palo      The comprehensive offerings have               and other legal documents needed to get
Alto and Redwood City. The law firms         worked well so far for Civic Speak Inc.,         started.
also participate in events and training      a startup that builds civic engagement              In the last couple months alone, San
workshops that Plug and Play offers.         applications for the iPhone which moved          Francisco-based startup accelerators
   Startups at Plug and Play have a          into Plug and Play’s Sunnyvale office in         I/O Ventures and Kicklabs both set up
65 percent to 70 percent success rate,       2009.                                            shop, providing more options for legal
compared to an 80 percent failure rate         Jeffrey Carlson, its founder and CEO,          partnerships. A spokesperson for I/O