En-novate, a travel experience company sent me a trip proposal about an investment road show to the valley to explore emerging technology ecosystems and how best to foster and support it in South Africa. Initially, it looked like a technology tourism trip. I didn’t prioritise it. In hindsight it is humbling to admit this in my capacity as an employment lawyer advising both technology companies on employment and regulatory law, and accelerators in South Africa for whom I lead legal incubation. For this I apologise. I share this because Ryan Gilbert of Propel VC, who hosted a session with the trip delegation, said it best - "As South Africans, we don't think big enough." And this is of particular relevance to lawyers!
The trip was attended by a delegation of business leaders between the ages of 25 to 41. I will admit only to just making that cut off point. The delegation was made up of financial institutions, law firms, medical schemes, established entrepreneurs, aspiring entrepreneurs, venture capital firms and mining houses.
Sessions were held with venture capital firms, entrepreneurs, and their ecosystems - and all equally impressive in more ways than the word limit on this article permits. Some names that may evidence the gravitas of those who addressed us are Plug and Play, Shaked Ventures, Wonder Ventures, Propel VC, Google X and leaders at Stanford University (Stanford Seed and Stanford Innovation GSB Impact Fund).
Why is a trip of this nature relevant to lawyers? Where does one start?
- Firstly lawyers should no longer consider their relationship to be instruction based – in other words that we are only called in when a problem arises or advice is required. This is an on-going relationship, regardless of whether there are instructions or advice ahead or not. Lawyers are strategic advisors - to business, to accelerators, to venture capital firms, to entrepreneurs, and to potential aforementioned entities and variations of same. This means holding their hands in the journey of relevance in this technology revolution and being privy to and intimately aware of ecosystems like those in the valley which could spur growth.
- Secondly emerging technology is changing our clients' business. The clients we will advise in the coming years will not require run of the mill advice. To the contrary, if the valley and the colleagues from leading corporates are correct, these industries want to use artificial intelligence that looks at machine, predictive and intuitive learning, amongst others. What are now start-up companies will come to be leading clients in the future. So we must catch up! Trips like the ones hosted by En-novate show us what South Africa fast-tracked will come to look like. So we need to invest. I am extremely proud of my firm's investment in this regard. Fasken invested in the trip looking at the future of our clients and the practice that junior professionals will come to hold in the foreseeable future, and for that, I'm excited to be part of such an entrepreneurial organisation.
- Thirdly we need to also look at law firms advising these ecosystems in the valley. How do they bill? What do they do?
It's no mathematical secret that a trip of this nature - a week in the valley with 4 days in travel and/or transit is expensive. Despite its immense toll, this was worth it.
- I learnt about the emerging technology 'ecosystem'. I advise accelerators and lead legal incubation. I also am a supporter of gig work. I help clients set up platform and gig work, mitigating the risk of employment-related and regulatory claims. I learnt that there is a 'can do' ecosystem in the valley that supports and cheers on what is evidently the birthplace of ideas! Relationships with legal advisors to this ecosystem are not with the company or the entrepreneur holding an investable idea. The relationship is with the natural or juristic person capable of generating such ideas. Ideas may succeed or not. And both present opportunity. And for both, the lawyer is there learning too, supporting and advising and guiding that process.
- In the emerging technology space in the valley, lawyers invest time and defer fees. Lawyers employ alternative fee arrangements. What a contentious statement! As I type it, I worry that I may have lost what may well have been a captive audience. We need to continue to have meaningful conversations on this pertinent topic.
- Regulations are crippling in a space where demand work challenges conventional employment models. There is no permanent role in a start-up company. Technology requires skills and services that look different with every algorithm being run. Adapt, and advise on the taking of informed risk. Be doers and not naysayers! Yes, we have a regulated system of employment law. We also have a respected contractor model that is upheld when used responsibly and ethically.
- Finally, the workplace of a corporate or an emerging technology company does not need to pay exorbitant salaries to attract talent. In exploring this with Google X, I learnt that the environment attracts the best talent because these are people who celebrate innovation - they live it. Non-competes are not relevant in a constantly changing ecosystem. Employees are encouraged to have their own side gig. It helps them be full people capable of looking at the bigger picture. The environment attracts a person who wants to be part of this ecosystem.
So with this in mind, I commence a 22-hour trip back home to reshape my offering and to play my role to make the South African entrepreneur want to share his/her ideas with the SA economy.
SA is a land of immense opportunity in the form of bright innovative young minds, natural resources and infrastructure that allows a boom year after year despite many reasons not to. If we, as strategic advisors, cultivate ecosystems like those in the valley exploiting our wealth already at our disposal, then in the spirit of Ubuntu, together, who is to stop us from competing in the global market?
Some next steps that seem achievable are as follows:
- creating an ecosystem that makes legal services affordable to start-up companies;
- working closely with venture capital firms to generate capital for investment;
- changing the mind set of corporates around enterprise/supplier development, and CSI grants - this is not charity, but can be a meaningful investment.
The one thing that inspired all the delegates on the trip is that companies like Google X, venture capital firms, the ecosystems in the valley – they do not fall in love with an idea. They search for problems and build relationships with people who can generate solutions. In all our work, we should be finding that pairing. Lawyers are not transactional points of contact, not in this global market!