Corporate Counsel - Sample Issue

SOME FINTECH STARTUPS ARE INNOVATING so quickly that it’s hard for outside counsel to keep up.

Ben Alden, general counsel for per-
sonal finance startup Betterment in New
York, has hired many firms that he ulti-
mately parted ways with before finding the
right outside counsel who understood the
company, which offers automated invest-
ing. “It’s hard to get someone who’s billing
$1,000 an hour up to speed in a cost-effec-
tive way,” Alden says. “We would spend a
lot of time [and money] to train outside
counsel on our specific industry.”
Alden says he found that “not all law-
yers were familiar with, or interested in,
the intersection of technology and the
rules and regulations that govern us as
an investment adviser and broker-dealer.”
He says it took someone who was going to
think “deeply and creatively” about what
it means to be a “robo-adviser in a world
where many of the relevant laws were
written for human advisers.”
That’s when Alden decided to try
out four or five different firms and rely
on references from others. Betterment
works with one lawyer at Schulte Roth &
Zabel for expertise on broker-dealer law.
Morgan, Lewis & Bockius was identified
in October as doing work for Betterment.
Alden declined to name other firms the
company uses.
Alden’s search for outside lawyers
made him realize he’d rather be expanding
in-house. “[Firms] bill you to explain the
background and how this is cutting edge,”
he says. “I think on the one hand you love
hearing from law firms, ‘Wow, I’ve never
seen that one before. That’s interesting.
Let me think about it.’ Because it means
you’re working on really great legal issues,
but the flip of that is we
try to build our team so
that we can handle those
questions ourselves. We
want to bring as much of
the interesting work in-house as possible
because we are so tightly engrained with
the business as a legal team.”
Derek Meisner, general counsel and
chief compliance officer at Boston-based
Quantopian, shares Alden’s frustration.
WE’LL DO IT OURSELVES, GCS SAY
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