With Scott Orn

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Scott Orn

Scott Orn, CFA

Chiara Portner of Hopkins Carley - a Premier Law Firm located in the capital of Silicon Valley

Posted on: 06/07/2021

Chiara Portner

Chiara Portner

Shareholder - Hopkins & Carley

Chiara Portner of Hopkins & Carley - Podcast Summary

Chiara Portner, Shareholder, and Counsel at Hopkins Carley, a Silicon Valley law firm, stops by to chat about how she offers practical advice on technology and commercial transactions as well as privacy matters.

Chiara Portner of Hopkins & Carley - Podcast Transcript

Scott: Hey, it’s Scott Orn at Kruze Consulting and welcome to another episode of Founders and Friends. And before we start the podcast, let’s give a quick shout out to Rippling. Rippling is the new cool payroll tool that we see a lot of startups using. Rippling is great for your traditional HR and payroll. They integrate very nicely. But guess what? They did another thing. They integrate it into your IT infrastructure. They make it really easy for when you hire someone to spin up all the web services in their computer, which sounds kind of like not a huge deal. But actually, we did the study at Kruze. We spent $420 on average, just getting a new employee’s computer up and running and their web servers up and running. It’s actually a really big deal. It saves a lot of money and the dogs are eating the dog food. We see a lot of startups coming into Kruze now using Rippling. So please check out Rippling. Great service. We love it. I think we have a podcast with Parker Conrad. You can hear it from his own words, but we’re seeing them take market share. So, shout out to Rippling. And now to another awesome podcast at Kruze Consulting’s Founders and Friends. Thanks.
Singer: (singing). It’s Kruze Consulting. It’s Founders and Friends with your host, Scottie Orn.
Scott: Welcome to Founders and Friends Podcast with Scott Orn at Kruze Consulting. And today, my very special guest is Chiara Portner of Hopkins Carley. Welcome, Chiara.
Chiara: Hi, Scott. Thanks for having me.
Scott: My pleasure. So, we met a couple of months ago from Basant at First Republic.
Chiara: That’s right.
Scott: We do a lot of business with connected us, great person, and we really hit it off in a meeting. And you are a wealth of knowledge on intellectual property licensing, commercial terms. And so, I thought it’d be really cool to have you on the podcast so our audience can learn a bunch of stuff from you, and hopefully work with you in the future. So, thanks for coming by.
Chiara: Sure. Happy to be here.
Scott: Well, maybe you can start off by just retracing your career a little bit and let us know how you got into intellectual property and how you landed at Hopkins Carley.
Chiara: Sure. So, I always really wanted to be a lawyer. I think part of that was because my grandma really wanted to be a lawyer. She’s 94 now, and she wasn’t able to during those times. I’ve kind of been raised in law firms. I worked in a law firm during college, during law school. And then when I got out of law school, the dot com bubble had burst in 2001, 2002 timeframe. So, my firm deferred their summer class that was going to be going into the licensing and corporate area because that always goes down during dot com bubbles.
Scott: Yep.
Chiara: And so, I worked for the city attorney’s office in Redwood City. I got to sit in the mayor’s office, have a bigger office than anyone else for some odd reason, as a first year out of law school. And so, during that time, I had always been interested in technology and privacy. I’d written about privacy in law school and even in Redwood City. HIPAA had just come out, the new US health privacy law. And I had to figure that out on my own with no budget in the city to take classes or anything, and just had to figure it out with a bunch of other city attorneys. So that kind of really cemented me getting into privacy. And then when I started at my firm, the associate who had traditionally been doing privacy was leaving the same week I was starting. So, they put a binder on my desk and said, “You’re the new privacy associate.” So, I was kind of thrown into it.
Scott: Oh, my God.
Chiara: Learned on the job.
Scott: It’s like the opportunity you kind of didn’t want.
Chiara: Well, no. I did want it because I actually liked that and I was interested in it. So, it just kind of worked out and getting thrown into things and having to figure it out.
Scott: That shows a lot about who you are though, as a person and that you were able to just figure it out. That’s actually a skill we look for at Kruze when we’re hiring people too, but not everyone can do that. Some people need to have their hand held and go through it. So, kudos to you for being that type of person that can figure it out on the fly.
Chiara: That’s true. It can be intimidating, but it’s out of necessity. It had to get done, so you make it happen.
Scott: Yep.
Chiara: So, after being at big law for a while, I went to a boutique firm started by one of my mentors at the big law firm. And then stayed there about 10 years, made partner there, and then decided I needed a bigger platform to service my clients and have different practice areas. That’s where I joined Hopkins Carley about two and a half years ago now. And so now I can service clients and you walk down the hall and talk to an employment attorney or a real estate, because all my clients are needing all those services now.
Scott: And we were talking before we turned the camera on, but you were explaining where Hopkins Carley fits in relative to big law and relative to boutiques. You want to share that with the audience a little bit?
Chiara: Yeah. So, I see, even my journey, I started out super big law and then super tiny boutique. And now, I’m middle, a mid-sized firm. It’s kind of like the Goldilocks of law firms. It’s a good, sweet spot where your company might need more than what a boutique can provide. You need different services, not just one specialized service. And you also don’t want to pay the big law rates or don’t want to use a big law firm. And so, we’re in that nice spot for mid market companies and startups.
Scott: That’s really beautiful. But you can bring all the services needed and maybe just not the overhead of a big law firm.
Chiara: That’s right.
Scott: And they also probably get, they probably love working with you, instead of working with maybe getting delegated to mostly an associate. They actually get to work with you probably.
Chiara: That’s right. That’s right. We stay involved more.
Scott: That’s really cool.
Chiara: Yeah. At the partner level.
Scott: Yeah. That’s awesome. Well, we want to do this podcast just to talk about a lot of the terms that are in a commercial agreement that a startup might make. I mean, for Kruze, you do all kinds of companies, but for Kruze, we’re focused on startups. But you do, maybe you spend a minute after this just explaining the industries you tend to work in. But the big terms when they’re either licensing a piece of technology or just doing a commercial deal with a partner, and that was kind of the genesis. And then we’ll also talk about privacy towards the end because you do a lot of privacy work.
Chiara: Right.
Scott: But maybe talk about the industries you focus on and some of the unique challenges in IP licensing and commercial agreements in those industries.
Chiara: So most of my clients are in tech and so software gaming clients. I have a lot of security clients, drone clients, drone security. There’re flying car clients now, which is cool.
Scott: Yeah.
Chiara: What I like most is because I get to learn about all these new technologies and see what’s coming out. There’s always trends I’ve seen through the years, and now NFTs. Been reading alot about that because I have some gaming clients that are doing stuff with NFTs. Interesting. Figuring out there’s a lot of legal issues around that.
Scott: Non-fungible tokens, right? Is that-
Chiara: Yes.
Scott: That’s the definition?
Chiara: That’s right. Are you investing?
Scott: I feel cool just knowing that. I haven’t bought any yet. I’m sure I will at some point, but it’s genius. Yeah.
Chiara: It’s interesting, that’s for sure. Yeah. When looking at contracts, I kind of call them bet your company issues. And there are maybe four or five issues that really can, that are important, that you need to hone in on and make sure you get those right. And then maybe you could let some other things go, especially if you’re a startup. Maybe you don’t have a lot of negotiation power, right?
Scott: Yep.
Chiara: So, looking at the license grant, the restrictions around what people can do with your software technology. The warranties are very important, what you’re guaranteeing and what you’re disclaiming, what doesn’t apply. We love sales guys, but you don’t want what your sales guy promised, that the software can make your blanket fly.
Scott: Yeah.
Chiara: You don’t want that to apply, right? Also, limits of liability. That’s kind of the umbrella protection over your company and the contract, whatever can go wrong. Maximum you could be liable for. And then indemnity is, a lot of people don’t understand indemnities. They’re scared of the word and it’s really almost like an insurance policy or covering another company for something that you’ve done. So those are the big issues that I tend to see and get most negotiated as well.
Scott: And when one of your clients comes to you, have they just signed a term sheet with the licensee? Or they are the licensee? Or are you involved from term sheet all the way through documentation of that? What’s your entry point in the conversation?
Chiara: Well, the earlier, the better to get the lawyers involved. It doesn’t usually serve the company well when you get the lawyers involved at the last minute. And if you’ve negotiated everything, and maybe you shouldn’t have agreed to certain things. Depending on the deals and the size, there might not even be a term sheet. It might just, you just go for the deal up front. And so, I’m involved in all facets and areas on either the drafting side, redlining things and then doing the negotiation with the client.
Scott: Yep. And how do you… I used to do investment banking and so you’d have these conversations with the company that may entertain those, selling their company. And I’m sure you’re doing something similar. What’s your kind of bedside manner, to borrow a doctor’s description of how doctors deliver bad news or counsel their client? How do you talk to them about, “Hey, yes, I know you want to agree to this term, but to get the deal done. But here’s the ramifications and here’s what can go wrong.” How do you have that conversation with the founders?
Chiara: I’m a pretty calm person so when I’m negotiating, I have a calm style. I’ve negotiated against other lawyers who are really aggressive and they should be litigators. They shouldn’t be-
Scott: Yeah.
Chiara: We’re trying to get our clients to get a deal done, and they’re going to have to do business together. So, you don’t need to get into a fight trying to get the deal done. Right?
Scott: Yep.
Chiara: You’re moving towards the same goal. I just deliver it, the news and say, usually I try to give them some options. The most conservative approach, the best option would be to do this. But if you’re willing to take some risks and it’s your company, you can decide. I can advise you, but ultimately you need to make the decision.
Scott: Yeah.
Chiara: So usually giving them some options.
Scott: Hey, it’s Scott Orn at Kruze Consulting. And before we get back to the podcast, quick shout out to ChartHop. Charthop is one of my favorite new SAS tools on the market. And basically, what Charthop does is it puts your org chart in the Cloud. And I always like to say, it brings transparency to your organization. And so, everyone in your organization can see who they report to. They can see the full or try the company and how their group relates it to other groups. It also has a lot of information on the individuals in the company. And so, you can click on the Charthop profile and just get where people live, their experience, Slack handles, all this kind of stuff. And it’s just a really great tool. The other thing is, Charthop has started doing some cool stuff around compensation and budgeting planning. And so, you can actually start seeing what the cost structure of the company look like during a certain scenarios. So, I’m loving Charthop. Check it out, We use it at Kruze, really like it and I can’t recommend it enough. All right. Back to the podcast. Yeah. That’s really smart. In terms of like you said, a lot of people are, we can kind of just roll through some of those topics, but for indemnification for example. I know once a year, because we have indemnification in our engagement letter with our clients. Because you never know when a crazy investor might decide to try to sue everybody because they’re angry, the company’s not doing well. Or something out of our hands or piece of information we were never given or something like that can come back and bite us or the clients. So, we do have indemnification in our engagement letters. And once a year, I’ll have someone who just goes crazy over that and cannot wrap their head around it. Which to me, it seems like a normal business term. How do you talk to your clients about identification? How far to go, do you put caps on it? What’s your technique on that?
Chiara: So, at first, you have to look at what the business relationship is and what the agreement is about and what each party is providing in terms of information, IP materials. And then scope it out and decide what’s fair. What should you be responsible for versus what should I be responsible for? And making sure there’s proper exceptions to the indemnity that is properly scoped out. And then you get to the limitation of liability question and if you’re the one providing the indemnity, you’re going to want to have some kind of cap on that. But if you’re on the receiving end, you’re the indemnity, you’re going to want to have that unlimited. That becomes a negotiation. Really depends on negotiating bargaining power, who wants the deal more and what you can ultimately give up.
Scott: Yeah. What you can stomach.
Chiara: Yeah.
Scott: That makes perfect sense. And the exceptions are, is that if one of the parties commits fraud or something? I forget that, like willful misconduct or things like that? I always get a little bit confused on some of those, but is that the kind of stuff you’re talking about with exceptions?
Chiara: Depending on what the indemnity is for. So, for example, for a software company, if I’m the license or I’m going to be indemnifying the licensee customer. If my software infringes on some third party’s patent or copyright, and we copied some code. And then the customer sued because they have the deep pockets. And so, with that, the exceptions would be maybe the customer didn’t use the software properly. Maybe they modified the software and they weren’t supposed to. And that modification caused the issue.
Scott: Yep.
Chiara: Things like that.
Scott: That makes perfect sense. Cool. Okay. And then on some of the stuff you talked about, like restrictions around the license. What type of restrictions, for example, for a gaming company that you’re talking about or a software company? How would you see that?
Chiara: So usually, your licensing software, maybe to consumers or to another business, depending on what the deal is, it might be only for their internal use or maybe they get to incorporate it into their own product and distribute it. And then on the restriction side, you would make it clear what they can’t do. Maybe they’re not getting source code. They can’t modify the software. They can’t distribute it to someone else. There would be a whole host and there’s some typical restrictions, but there can also be really customized restrictions as well. Or geographic territory restrictions also.
Scott: That makes perfect sense. And I’m trying to roll back through the list of things you talked about. Is there anything I’m missing on those big key bets the company points?
Chiara: And then just on warranties and sometimes you’ll see in all capital letters, like it’s screaming to you, we disclaim XYZ. It’s as is. Those are actually important and do need to be in capital letters. So, I was getting a lot of questions about that.
Scott: Really? They do need to be in capitals? Because-
Chiara: They do.
Scott: The law requires that or something so that people don’t miss it?
Chiara: It has to be conspicuous for it to be binding. Yes.
Scott: Wow. I never knew that. That’s awesome.
Chiara: Yeah.
Scott: And do you have any good, use judgment here and you don’t want to breach client confidentiality, but is there any common mistakes that our clients could learn from that you see over and over again? That people rush into an agreement or they don’t think about some of these terms or they’re just too agreeable or things. Kind of a very tangible example of how it’s come back to hurt one of your clients, that you wish it hadn’t.
Chiara: I would say signing NDAs without really reading them or looking at them, having a little review. There can be some tricky things in there, even though they’re the shortest documents and probably the simplest kind of document that I review as a lawyer. But there can be terms in there, especially from big companies that are tricky, that you wouldn’t want to have if you knew what they meant.
Scott: Yeah.
Chiara: So, I would say probably that. And then also on geographic territorial restrictions, when you’re dealing with distributors or other resellers and kind of dealing with channel conflict. I’ve seen that come back to bite clients, as well.
Scott: That makes a ton of sense. That’s excellent. So on bet the company issues, they need to think about all these topics and they should hopefully reach out to you if they need some good legal advice. And then when we were talking before I turned the camera on, but you were saying you do a significant amount of privacy work too.
Chiara: Right.
Scott: And maybe you could kind of explain that part of your practice to the audience.
Chiara: Sure. Yeah, like I said, I’ve been doing privacy since 2002, since before it was trendy really. Now everyone, a lot of people do privacy. But at the time when I started, privacy and technology are really integrated and it was the tech companies that were concerned about privacy. And for the most part, they are still the companies that are concerned about privacy and pay attention to it. So I help clients with their privacy policies that are external and their internal employee policies, and having policies to ensure that how they’re using data and security. And then data protection and processing agreements where you’re sharing data, and insurance service providers have proper terms with you as well.
Scott: Yeah. Yeah. That’s super important. And I’m blanking on the European legislation that or rules that GPDR is the one I’m thinking of. And then California has some other stuff around that. Did that like turbo charge that part of the practice or make it just super important, that everyone comply?
Chiara: It does. I mean, for CCPA, that’s a new California law, new-ish. It doesn’t apply to everyone. But there’s been a California law on privacy since 2004, so much longer. That does apply to everyone who has a website, which a lot of people don’t know about. So, when GDPR or CCPA come into effect or new state laws, because they’re coming at us all the time now. There is a little uptick in work and clients asking about it and trying to figure out if it applies to them or not. And then we guide them through that.
Scott: That makes sense. And what are some of the rules of thumb or things that people should just be aware of? Again, maybe common mistakes that founders or executives might make when they’re addressing privacy.
Chiara: Copying someone else’s privacy policy on their website. That is a big, no, no. You are not-
Scott: And forgetting to do the keyword search, right? And take the other person’s, other company’s name out.
Chiara: Right.
Scott: I’ve seen that before.
Chiara: That’s the thing, because they’re public. They’re on everyone’s website. You can go find one, and then just change your name. But I have seen clients who don’t change the name properly, and then they have their competitor’s name in their own privacy policy.
Scott: Totally. Totally.
Chiara: It also doesn’t reflect necessarily how you’re doing business in your practices. And that’s key. You have to be fair and transparent and your privacy policy has to say exactly what you’re collecting, how you’re using it, how you’re disclosing it.
Scott: Yeah. You must get a few panic calls every once in a while from people who took the shortcut, and then realize something’s going wrong and they need to beef it out.
Chiara: They might hear from a customer, angry customer sometimes. Yeah.
Scott: Yeah. What’s the right time to get involved on the privacy work? We work with companies that are anywhere from seed stage, like two or three person company all the way up to Series C, Series D companies. When should they be thinking about this type of legal work?
Chiara: They should be thinking about it before Series A. I mean, in your Series A docs, there’s going to be representations and warranties that you comply with privacy laws. They are getting lengthier, those reps and warranties and more detailed because of all the new, different laws that apply now. So it’s really something to invest in at the start and get it right. We can always help guide companies as to what’s important and what to prioritize, but it should be done from the start.
Scott: Yeah. No, that makes so much sense. You’re right. On the accounting and tax side, those reps and warranties are super important too. And so having professional advisors who can help you through that when you’re doing a fundraise is really, really important. So we talked about when the right time is to bring you in for, and it sounds like Series A is when the reps and warranties come in. What if a founder is working with a law firm that is maybe a strong on fundraising, but doesn’t have the breadth of IP licensing, privacy? When do they make that call to you and how do you work with the other law firm in those cases?
Chiara: Yeah, we just work it really as colleagues. We’re essentially in the same firm and we help review the reps and warranties and determine disclosures, determine any remediation and fixing or adjusting their privacy policies.
Scott: Awesome. So you can work together with another law firm if they don’t have-
Chiara: Yes.
Chiara: We’ve done that before.
Scott: That- Capability. Awesome. Well, this has been really educational. I feel like I’m not even that great at asking the questions. So thank you for guiding the conversation because I’m not a lawyer. But that’s why this is so valuable for our client base to be able to listen to this podcast, watch it on YouTube and actually be able to have a lot of their answers. And go into these types of conversations feeling smart and feeling educated. So thank you so much. Maybe you can tell everyone how to reach out to you, get ahold of you if they want to work with you, which I’m sure they’re very impressed by this podcast and probably learned a lot. There’s more to come if they’re working with you. They actually get that, have you on their side, which is pretty cool.
Chiara: That’s true. Yeah. I’d be happy. Anyone can reach out with questions. You can find me at C. Portner, P-O-R-T- N-E-R at Hopkins Carley dot com. And again, I help clients with privacy and their commercial contracts, tech licensing, closing deals, oftentimes to the last minute on New Year’s Eve to get that end of the year deal done. So I don’t make New Year’s plans.
Scott: You don’t pop the champagne until 12:01. That’s-
Chiara: That’s right. Yes.
Scott: That’s when you’re starting to celebrate.
Chiara: Yeah.
Scott: Awesome. It was great talking to you. Thank you so much for being on. Really appreciate it.
Chiara: Thank you for having me.
Scott: I’m looking forward to getting the feedback on the podcast.
Chiara: Sounds good. Thanks.
Scott: Thank you.
Singer: (singing) It’s Kruze Consulting. Founders and Friends with your host, Scottie Orn.

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