For two and a half years, starting in 2016, Viky Bohra admitted to using confidential financial information he received from his wife, Laksha, to place illegal trades on Amazon stock for a profit of $1.4 million.
According to court records, Bohra accessed information about Amazon revenue and expenses from his wife, who at the time worked as a senior manager in Amazon’s tax department, and used that information in violation of trading blackout periods.
“Bohra’s conduct was not an isolated incident, limited to trading before one Amazon earning’s statement. Rather, Bohra engaged in illegal insider trading in advance of 11 straight earnings announcements,” prosecutors wrote to the court.
The US Securities Exchange Commission brought civil charges last September against Bohra, his wife, and his father, for which they paid more than $2.6 million to repay the illegal gains, along with interest and penalties.
In one instance, the SEC’s initial complaint alleged, the Bohras logged in to Amazon’s network from a European vacation to view financial information before executing a trade that netted them nearly $600,000 in profit in one day.
“Vik Bohra deeply regrets this conduct, accepts full responsibility, and intends to promptly repay the funds,” said attorney Peter Offenbecher in a statement at the time, according to The Seattle Times.
As part of his plea agreement, Bohra’s wife will not face criminal charges.
“This case should stand as a warning to those who try to game the markets with insider trading: there is a heavy price to pay with a felony conviction and prison sentence,” US Attorney Tessa M. Gorman said in a statement.
Amazon declined to comment, and an attorney for Mr. Bohra did not immediately respond to Insider’s request for comment.
The Department of Agriculture promised it would start paying off the loans of Black and other minority farmers this month before a Wisconsin federal judge halted the program on Thursday.
US District Judge William Griesbach issued a temporary restraining order suspending the program because of a lawsuit by the Wisconsin Institute for Law and Liberty, a conservative group based in Milwaukee, who filed the suit on behalf of white farmers who said it was discriminatory towards them, the Milwaukee Journal Sentinel reported.
The $1.9 trillion American Rescue Plan signed by President Joe Biden in March set aside $4 billion toward debt relief for socially disadvantaged farmers to pay off burdensome debts. It would pay up to 120% of direct or guaranteed farm loan balances for Black, American Indian, Hispanic, Asian American, or Pacific Islander farmers.
“This is a big deal for us,” John Boyd, Jr., president of the National Black Farmers Association, told CBS MoneyWatch in March. “We see this as a great opportunity to help thousands.”
The program, however, was opposed by 49 Republican senators.
USDA did not respond to Insider’s request for comment at the time of publication but officials told The Washington Post that 17,000 farmers of color qualify for this assistance so far and vowed to defend their efforts in court.
“We respectfully disagree with this temporary order and USDA will continue to forcefully defend our ability to carry out this act of Congress and deliver debt relief to socially disadvantaged borrowers,” Matt Herrick, USDA director of communications, told The Post. “When the temporary order is lifted, USDA will be prepared to provide the debt relief authorized by Congress.”
As law firms and their clients seek to digitize and streamline work, VCs have been opening their wallets to the growing legal-tech space. The total value of deals in the global market to date this year clocks in at $974 million — already surpassing the $603 million figure from 2020, according to data from PitchBook.
Private equity firms are also increasingly eyeing legal tech, investing more than $3.6 billion in Q1 of 2021 alone, according to market intelligence platform Bodhala.
Here’s a look at our legal-tech pitch deck collection.
Athennian, which helps law firms and legal departments manage data and workflow around legal entities, raised a $7 million CAD (more than $5.5 million USD) Series A extension in the beginning of March, nearly doubling its initial $8 million Series A round last year.
Athennian’s revenue and headcount more than doubled since the original Series A, according to founder and CEO Adrian Camara. He declined to disclose revenue numbers, but said that the sales and marketing team grew from 35 people in September to around 70 in March.
Launched in 2017, Athennian is used by nearly 200 legal departments and law firms, including Dentons, Fastkind, and Paul Hastings, to automate documents like board minutes, stock certificates, and shareholder consents.
The Series A extension was led by Arthur Ventures. New investors Touchdown Ventures and Clio’s CEO, Jack Newton, also participated in the round, alongside Round13 Capital and other existing investors. To date, Athennian has raised $17 million CAD, or around $14 million USD, in venture capital funding, per Pitchbook.
Contract tech is the frontrunner in the legal tech space, as companies across industries seek to streamline their contract creation, negotiation, and management processes.
Evisort, a contract lifecycle management (CLM) platform, raised $35 million in its Series B announced late February, bringing total funding to $55.5 million. The private equity firm General Atlantic led its latest funding round, with participation from existing investors Amity Ventures, Microsoft’s venture firm M12, and Vertex Ventures.
Founded in 2016, Evisort uses artificial intelligence to help businesses categorize, search, and act on documents.
Its CEO Jerry Ting founded Evisort while he was still attending Harvard Law School. He spent one summer working at Fried Frank, but soon realized that he didn’t want to be a lawyer because he didn’t want to spend excruciating hours manually reading fifty-page contracts. He did, however, recognize how important they are to corporations, and co-founded Evisort as a tool to locate and track valuable information like a contract’s expiration date and obligations like payment dates.
Try to imagine the contracts negotiation process, and one might conjure up a scene where a sheaf of papers, tucked discreetly into a manila folder, is shuttled from one law office to the mahogany table of another. With a stroke of a fountain pen, the deal is sealed.
Those old-school methods have long been replaced with the adoption of PDFs, redlined versions of which zip from email inbox to inbox. Now, contracting is undergoing another digital shift that will streamline the process as companies are becoming more comfortable with tech and are seeking greater efficiencies — and investors are taking note.
Contractbook, a Denmark-based contract lifecycle management platform, late last year raised $9.4 million in its Series A investment round, led by venture capital titan Bessemer Venture Partners. In November 2019, Gradient Ventures, Google’s AI-focused venture fund, led Contractbook’s $3.9 million seed round.
Founded in Copenhagen in 2017, Contractbook uses data to automate documents, offering an end-to-end contracts platform for small- and medium-sized businesses (SMBs). Niels Brøchner, the company’s CEO and cofounder, said that Contractbook was born out of the notion that existing contract solutions failed to use a document’s data — from names of parties to the folder the document is stored in — to automate the process and drive workflow.
Cloud-based technology is having its moment, especially in the legal industry.
As attorneys have been propelled to work remotely amid the pandemic, data security and streamlined work processes are top-of-mind for law firms, leading them to adopt cloud technology.
Investors are taking note. Disco, a cloud-based ediscovery platform that uses artificial intelligence to streamline the litigation process, snapped up $60 million in equity financing in October.
Its Series F, led by Georgian Partners and also backed by VC titans like Bessemer Venture Partners and LiveOak Venture Partners, brings total investment to $195 million, valuing the company at $785 million.
Launched in Houston in 2012, Disco offers AI-fueled products geared towards helping lawyers review and analyze vast quantities of documents, allowing them to more efficiently determine which ones are relevant to a case.
BlackBoiler is an automated contract markup software that’s used by Am Law 25 firms and several Fortune 1000 companies.
The software uses machine learning to automate the process of reviewing and revising documents in “track changes.” This saves attorneys the time they would typically spend marking up contracts that often use standard boilerplate language.
As a pre-execution software used in the negotiation and markup stage of the contracts process, BlackBoiler has carved out a unique space in the $35 billion contracts industry, said Dan Broderick, a lawyer who cofounded the company in 2015 and is now its CEO.
Broderick walked Insider through the pitch deck the company used to attract funding from investors, including DocuSign as well as 10 attorneys that run the gamut from Am Law 50 partners to general counsel at large corporations.
The revelation that the US Department of Justice obtained records for at least two Democratic lawmakers — and critics of former President Donald Trump — shows the extent to which the legal system was perverted to serve the narrow partisan interests of the last administration, Michael Cohen told Insider on Friday.
The comments from the ex-president’s former personal attorney came after reports that federal prosecutors had forced Apple to hand over communications data for Democratic Reps. Adam Schiff and Eric Swalwell, as well committee staff, and their relatives, including one child.
At least a dozen people in total were impacted, The New York Times reported, in an attempt to uncover the source of leaks to the press about Trump associates and their dealings with Russia. The administration also obtained records on journalists at several national outlets as part of its probe.
“Like the mafia, the Justice Department became nothing more than a corrupt arm of the Trump administration,” Cohen said, “run by Donald J. Trump as its head of the family.”
Cohen added that every target of the last administration’s surveillance “should be notified and the complete list of individuals should immediately be released to the media.”
The Justice Department’s Inspector General, Michael Horowitz, announced Friday that his office will be investigating the incident and whether it was “based upon improper considerations,” following requests from Democratic leaders in Congress.
In the Senate, Democrats are also demanding that former Trump Attorneys General Bill Barr and Jeff Sessions testify under oath about their role in the matter.
L’Autorité de la Concurrence, the French antitrust watchdog, found that Google’s Ad Manager ad server, which manages ads for large publishers, unfairly favored its online ad marketplace AdX in online ad auctions, such as by providing it information about competitors’ ad bids. The investigation also found that Google’s AdX offered superior interoperability features to Google Ad Manager than it did to rival ad marketplaces.
Google, which is not appealing the case, said on Monday it would make changes to its adtech, including offering increased access to auction data and improving the interoperability between Ad Manager and third-party ad servers. It will first make those changes in France, the company said it will roll out some of the changes globally.
Damien Geradin, an antitrust lawyer who filed the original 2019 complaint and represented News Corp. in the case — but said he wasn’t speaking on behalf of the publisher — said the outcome in France is likely to set a precedent for outstanding adtech antitrust suits Google faces in the US and elsewhere in Europe. (French newspaper publisher Le Figaro and Belgium-based Groupe Rossel also joined the initial complaint, though Le Figaro later withdrew.)
In an interview, lightly edited for clarity and length, Geradin said that while the remedies Google offered to settle the case are limited in scope, he predicted that other competition authorities around the globe would take the findings in France on board as they investigate other elements of its ads business — and potentially levy harsher, more structural punishments on the tech giant.
This case was brought in France. Why should people outside of France take notice?
This is the first time that a competition authority [has found] that Google abused its dominant position in the adtech market, which of course is a core market for Google.
The findings are crystal-clear. The language used by the Authority is quite strident and that’s significant in itself because Google does not contest the findings.
This is a highly [automated] market where you have companies across the globe trading. Obviously the impact will go beyond France.
If you look at the remedies, already Google has said that they would implement them more broadly. Technically it would be very difficult to basically separate France from the rest of the world — it’s highly integrated. If the French Authority found abuse of a dominant position in their investigation then I don’t think Google could say, “Well, it’s all different in Germany, or it’s all different in the US.” It’s exactly the same.
The French authority is the first one to rule on these practices but there are investigations before the European Commission, in the UK, Italy, the lawsuits in the United States. All these authorities will look at the French decision very carefully. They will certainly take this into account in their own investigations. It basically shows the way to the others.
How did the ADLC conclude that a €220 million fine was the right amount?
It’s always based on a variety of factors: the nature of the infringement, the length of the infringement, the turnover concerned.
In a case like this one, the fact that it’s a settlement and that Google offered some remedies probably had an impact on the fine. If the case had gone to the end with an infringement decision, the fine would have probably been twice as high.
Some people in the adtech community have said that the concessions are fairly limited in scope. It only affects what’s known in the industry as the “sell-side” and only focuses on a limited number of mechanisms Google was using. Are they missing the bigger picture?
The concessions are not that significant. They’re certainly less demanding than what they would have been in an infringement decision. That’s probably the reason why Google was willing to make them. It would have been surprising if Google would suddenly modify in a material way the way it goes about the adtech sector.
Very often these remedies look good on paper, but when you look at the details, you realize that very often they might be escape mechanisms. Or sometimes the language is not very clear and therefore gives opportunities to Google to have flexibility as to the way it interprets the remedies. Also, let’s face it, it’s a horribly complicated market.
It’s extremely difficult to monitor these sorts of markets because little tweaks in the algorithm can make a huge difference. That’s been the story of this case.
Google has always claimed they were not discriminating, that they were fair, and that they brought much value to ecosystem. But what they did was to always tweak the system in way that was good for them and bad for others.
I think we would be naive to think that suddenly they found God and they will become totally neutral and restore competition in the market. This is why the other investigations remain very important.
The US lawsuits are much more likely to make a difference because typically the remedies that might result from these lawsuits could be, for example, of a structural nature requiring some separation.
Do you think this ruling sets a precedent for some of the other cases against Google across Europe and the US and that they could potentially go a lot further? The Texas complaint, for example, also goes into some detail about Google’s ad server business and header bidding — but also covers such a large scope of its business.
Several scenarios may take place. Some authorities may say there’s no point in repeating what the French have done. These infringements are clear. So they may take findings on board but they may indeed require stringent remedies.
A lot of new stuff emerged from the Texas lawsuit. For example, this prima facie anticompetitive agreement between Google and Facebook — the so-called Jedi Blue agreement. There is still a reservoir of practices that have not been fully analyzed by competition authorities.
The French decision was essentially focused on the sell-side. The reason is that the complainants were publishers. There are also issues on the buy-side. It’s another range of practices that still need to be analyzed to see whether they are anticompetitive or not. If they are, there could be remedies that focus on the buy-side. There’s still plenty to do for other competition authorities.
At 6:30 on a Sunday morning, Steven Loeb rolled out of bed to start a full day of work — just as he has every day for the past year.
Seven-day workweeks have become the norm for trust and estate lawyers like Loeb, who said he’s been working around the clock since April 2020. The pandemic galvanized people to look more closely at their mortality and consider proper estate planning, and high-flying stocks in the past year also expanded high-net-worth clients’ portfolios, further complicating estate lawyers’ work.
“I haven’t had a day off since 2020 started. It’s been every day — we just have that much going on,” said Loeb, who works at the law firm Chiesa Shahinian & Giantomasi.
Lawyers are no strangers to strenuous work lives, but the demand has been unusually high. Politics also play a role, as likely tax changes under the President Joe Biden’s administration could upend old ways of advising clients and managing wealth.
“The phone won’t stop ringing,” said Pamela Grutman, a partner at Olsoff Cahill Cossu, telling Insider that she saw a “tremendous uptick” at the end of last year after the presidential election and has gotten triple the number of clients as usual in the past few months.
Estate lawyers say they don’t see the surge subsiding any time soon. “This could be a do-or-die time,” Loeb said.
The rich are panicking over tax proposals from the government that would upend estate planning as they know it
Estate attorneys’ workload is typically cyclical, increasing during election cycles and before spring break and summer break when clients want to make changes before getting on an airplane. But for the past 15 months, work has been at a fever pitch, beginning with the US lockdown in March 2020.
“Last March, we were faced with people who weren’t worried about how much they could save on taxes as much as whether they could die tomorrow,” said Larry Mandelker, counsel at New York-based law firm Venable. Clients in their 40s and 50s were suddenly rushing to change their wills and advanced directives, terrified of catching COVID-19 and needing a ventilator.
But by late summer, clients had shifted their attention to the upcoming election and prospect of a blue wave. That didn’t come to pass, but the Georgia runoffs in January gave Democrats a functional majority in the Senate, making it much more likely that tax hikes could happen. Now there are several legislative proposals that are keeping moneyed Americans and their lawyers up at night.
For starters, Sen. Bernie Sanders’ For the 99.5% Act would lower the lifetime estate-tax exemption — the amount of money somebody could give during their life or bequeath at death without incurring the estate tax of 40% — from $11.7 million to $3.5 million for estates and $1 million for gifts. If the act were to pass without changes, gifting or bequeathing $11.7 million would lead to a tax burden of more than $4.5 million.
Biden’s American Families Plan would likely be the most devastating to the wealthy. It would eliminate step-up in basis, a loophole that would severely affect how inheritance could be taxed. In short, capital-gains tax would be applied to an inherited asset such as a house or car depending on how much the value increased since the deceased person bought it, if it appreciated more than $1 million. Those affected would also have to pay this capital-gains tax upon the person’s death even if they don’t sell the asset, which is a fundamental change in the tax code.
Combined with the proposed capital-gains-tax hike of 39.6% from 20% for top earners, the bill would raise $113 billion in a decade, according to a study by the University of Pennsylvania’s Wharton School.
Estate lawyers have to turn away new clients
At the outset of the pandemic in March 2020, work for many lawyers dried up as mergers and acquisitions came to a halt and courts closed. But for trust and estate attorneys, it never really slowed down.
“When the pandemic first hit, I told my wife, ‘Maybe I’ll have my first break in 35 years.’ The total opposite happened,” said Eric Kramer, a partner at Farrell Fritz. “Everyone was home and said, ‘Hey, let’s look at our will and call Eric.'”
Demand has only increased since the election and the Georgia runoffs. Estate lawyers have been so busy that they’ve had to turn away new clients. CSG’s Loeb said he’s had to tell potential clients that he can’t take them on until at least October because it’d be unfair to existing clients.
“We’ve been picking up a matter a week, with old clients resurfacing,” said Jason Kohout, a partner at Foley & Lardner. Work has ticked up by 20-25% in monthly production since late last year, Kohout said.
The personal nature of trust and estate work means lengthy phone calls and in-person meetings are important, both of which are time-intensive tasks. Each matter takes an average of two to three months — longer for more complex real-estate and business portfolios, Loeb said.
In order to keep up with the demand, lawyers have been working longer hours, some more than they have before in their decades-long careers. Robert Strauss, director at Weinstock Manion, has been averaging 12 to 15 hours a day for six days a week since August.
“I am literally booked every minute of the day,” he told Insider. “Nobody knows what they should do about these changing laws, and we have ideas about what they should do, but all these ideas are predicated that laws that exist today will be respected after a change. I have this conversation with clients at least six times a day.”
Law firms can’t find enough estate attorneys to ease the workload
While hiring more lawyers would ease the burden, law firms are having trouble finding talent.
“We hired more people because people were overwhelmed,” said Scott Malin, a trust and estate partner at Lathrop GPM. “We would hire more if we could. We are continuing to interview, and there aren’t a lot out there who have experience.”
Part of that dearth has to do with the psychology of law students, Strauss said. “At least when I was in law school, the view was the best jobs, the sexiest jobs were with big firms, and none of the jobs at the big firms are in estate planning,” he said. “They have to go into M&A and litigation and work on the biggest deals or be a failure.”
Compounding the problem is the wave of baby boomers reaching old age. “You have this huge transition of wealth coming from the baby boomers over the next couple decades. I’ve been telling people for at least the last five years, if not longer: If you go into this field and you become an expert, you’re gonna have plenty of work to do,” Malin said.
Will the work ever slow down?
When asked about whether they thought demand would increase as the year comes to a close, most attorneys said yes. “You are scaring the s— out of me,” Strauss said.
It depends on how the significant tax proposals before Congress pan out, but clients will likely rush to make changes before 2022 in case any new laws take effect.
As for the years to come, attorneys predict more clients will need their services. The stock market’s growth over the past several years has created tremendous wealth.
Baby boomers, expected to transfer an estimated $68 trillion in assets over the next 25 years, will be calling. And if the estate-tax exemption goes down to $3.5 million, there will be a lot more taxpayers subject to estate tax. This is all a boon and burden to the industry.
“It’s profitable, but it’s just exhausting. I don’t think the extra increment of pay is worth the extra increment of work at this level,” Strauss said.
Malin thinks that the talent pipeline won’t be able to keep up. “I don’t think there’s enough people in the industry to do the work that’s coming down,” he said. “I don’t know how we would be able to handle that type of demand.”
Special-purpose acquisition companies, aka SPACs or blank-check companies, have also provided midsize US cannabis companies opportunities to go public by bypassing the traditional initial-public-offering process. SPACs pool capital from investors and have a limited timeframe, usually 18 to 24 months, to invest in target companies. Notable SPAC roll-ups in recent months include Subversive Capital’s acquisition of Caliva and Left Coast Ventures.
To understand the future of cannabis M&A, Insider interviewed seven top lawyers who’ve advised on some of the industry’s bigger deals. The lawyers all work for firms on our list of the top law firms in cannabis. They told Insider to expect more deals in the coming months as capital rushes into the industry and investors express optimism over a Biden administration and a Democratic Congress.
They also anticipate more regulatory clarity around the status of marijuana in the US, which could bring in new investors. The global market for medical and recreational cannabis products is expected to hit $104 billion by 2024, according to Prohibition Partners, a market intelligence firm.
“Building on the trend that we saw toward the end of 2020 into 2021, I think we’ll continue to see greater access to capital among the US players,” Aaron Sonshine, partner and head of the cannabis-law practice at Bennett Jones, told Insider. “There’s a significant pool of capital that we see entering the space for the first time following Biden’s election and the Georgia Senate races.”
Marijuana legalization has been floated, but smaller wins may come first
Cannabis remains federally illegal in the US, although people are allowed to use it for medical purposes in 36 states, and for adult use in 16 states.
Lawyers told Insider that this landscape has the potential to spur more M&A and SPAC deals in the coming months and that they expect more regulatory clarity around the status of marijuana in the US.
While the US House of Representatives passed a bill last year known as the MORE Act, which would have legalized marijuana on the federal level, it died in the Senate. A new version of the bill was introduced in the House last month, but Democrats have competing priorities, including infrastructure and family-support bills proposed by the Biden administration.
Some lawyers think more regulatory clarity could emerge this year when it comes to hemp, which was legalized in 2018, and CBD, a compound derived from hemp that doesn’t get you high but has been touted for wellness purposes.
Stefanie Fogel, one of several lawyers at DLA Piper who advises cannabis and hemp clients, said marijuana legalization could take years. The US Food and Drug Administration has approved one CBD-based medication, Epidiolex, and has warned people about the risks of using CBD, but has said it is still gathering data about the substance and its effects.
“There’s such an active lobby, and such a demand in the health and wellness space to have access to CBD and hemp-related products that I’m hopeful we’ll get to that sooner,” Fogel said.
Broadly speaking, Jonathan Sherman, a partner at Canadian firm Cassels Brock & Blackwell, says that legalization in the US is a question of when not if.
“I don’t think there’s any question sitting here today that US legalization will happen,” Sherman said. That’s led to an uptick in reach outs from clients in other industries, like banking, consulting, and consumer packaged goods, who want to lean on the firm’s expertise in the cannabis industry.
“People do not want to be behind the eight ball,” he said.
Overall, Sherman says that the perception of the cannabis industry among investors and the corporate world has come a long way since the firm worked with its first clients in the industry in 2014. Cassels — led by Sherman and partner Jamie Litchen — advised on Canopy Growth’s blockbuster transaction to take an equity stake in US cannabis firm Acreage Holdings in 2019.
“It’s to the point where banks, stock exchanges, audit firms — everybody wants to make sure they’re not last to the party because it’s a massive industry already,” Sherman said.
The Canadian market is going to see more deals and product innovation
In Canada, Kathleen Keilty, partner and cochair of the cannabis group at Blake, Cassels, and Graydon, told Insider that she expects companies to try to become profitable and remain competitive amid oversupply in the market. Keilty advised on the $3.9 billion merger between Canadian cannabis giants Tilray and Aphria earlier this year.
“There are many companies that have good assets but have struggled to be profitable in the face of oversupply,” Keilty said. “I think some of our clients and companies in the sector are looking at potentially combining with other companies in order to remain competitive.”
She added that Canadian companies are working to build up different product offerings like edibles and beverages as they gear up to enter the US market when that becomes permissible.
“Some of these companies are trying to make sure that they’re up to scale in anticipation of potential US federal legalization so they’re of a size that would be more suitable and capable of kind of moving into that larger US market.”
The blockbuster deals will grab headlines, but most of the deals over the next year will be a flurry of smaller M&A transactions
Norbert Knutel, partner at Blake, Cassels, and Graydon, added that we may see companies use deals to add product lines. Knutel worked on Subversive Capital’s acquisition of Caliva and Left Coast Ventures, which was valued at $425 million.
“Sometimes it just becomes easier and more efficient to acquire someone,” he said. “And you can add that to your suite quicker and get to the point quicker than doing it yourself.”
Though we’ve seen blockbuster deals in the Canadian cannabis market in recent months, like the Tilray-Aphria merger, Knutel said he expects the vast majority of the deals over the course of the next year to be smaller.
“The big ones will grab the headlines. I don’t think there’s going to be tons of them,” he said. “But the little ones, I think that that’s where all the volume and all the activities are going to be in the coming months.
Steve Tonsfeldt, a partner at Cooley who advised Tilray on the Aphria deal, cautioned that while his visibility was limited to the deals coming across his desk, some of the biggest players have already merged. “I think it’s very possible that the first wave of the consolidation actually has crested,” he said.
Cassels partner Litchen said she expects more “large scale” M&A between Canadian companies like Tilray and Canopy Growth and US cannabis companies as the US moves closer to federal legalization.
“The US is just the next big opportunity that everyone sees as right in front of us,” Litchen said. “But once the US does something, the rest of the world tends to follow.”
Expect more SPAC deals
Bennett Jones’ Sonshine told Insider that although the SPAC market has softened over the past few months, he expects more deals in that area in the coming months. Sonshine worked to put together Cresco’s acquisition of Origin House.
The participants will be a combination of previous SPAC leaders raising second or third SPACs and new entrants, he said. The competition over just a handful of SPAC acquisition targets will be intense.
“You need to be innovative,” Sonshine said. “You need to be distinctive and have a clear message on why investors should place their trust in you, right?”
That trend, Sonshine said, coupled with the flurry of M&A deals he expects will happen over the next year, will give smaller and midsize companies plenty of exit opportunities.
Intapp has expanded into financial services and accounting through a series of strategic acquisitions
Intapp is a cloud-based software platform for law, accounting, and financial services firms, helping them manage and synthesize information on clients, deals, and processes across the company.
Launched in 2000 as a management platform for law firms, Intapp has since expanded into other industries like banking and marketing through a series of strategic acquisitions.
Intapp’s expansion began in 2012 following an investment of an undisclosed amount from the private-equity firm Great Hill Partners. The money enabled Intapp to become “more aggressive” with its growth strategy, Thad Jampol, Intapp’s co-founder and chief product officer, previously told Insider.
As of March 31, Intapp had over 1,600 clients, including nearly all of the Am Law 100 firms like Baker McKenzie and Perkins Coie; KPMG, one of the Big Four accounting firms; and financial firms like banks and private-equity firms. These various sectors collectively make up a whopping $3 trillion in total global revenues, according to the company’s S-1 filing.
Intapp’s revenue growth was spurred by SaaS subscriptions as companies looked to the cloud
Intapp earned nearly $187 million in total revenue for fiscal year 2020 — a 30% increase from the previous year. Its annual recurring revenue (ARR), which is a key metric used specifically by software-as-a-service (SaaS) or subscription businesses, grew by 22% over the past year to $201 million as of March 31.
As businesses across industries sought to migrate their work online during the pandemic, Intapp doubled down on the cloud, announcing that it will only sell cloud-based solutions starting in 2021.
The move paid off: 49% of Intapp’s ARR growth came from its cloud-based SaaS subscriptions. The company raked in more than $99 million in cloud revenue as of March 31, representing a 52% increase from the year before.
That said, while the market for SaaS solutions for its target client base is growing, Intapp acknowledged that it’s “not as mature” as legacy on-premise companies, and that it operates in “highly competitive” markets.
“It is uncertain whether our SaaS solutions will achieve and sustain high levels of client demand and market acceptance, particularly in the professional and financial services industry,” the filing states.
LegalZoom aims to ‘democratize’ law for small businesses
LegalZoom, which also filed its IPO on Friday, was founded in 2000 with a mission to “democratize law” through flat-fee subscription services for small businesses. Robert Shapiro, who is best known for serving as one of O.J. Simpson’s lawyers, is one of the company’s co-founders. LegalZoom’s network of more than 1,300 independent attorneys and 75 in-house tax advisors helps companies from inception through their entire lifecycle.
In 2020, 10% of new LLCs and 5% of new corporations in the US were formed via LegalZoom, according to its S-1 filing. Small businesses have become “the engine of the US economy,” making up 65% of new jobs since 2000, per the Bureau of Labor Statistics. The burgeoning small-business market means a $48.7 billion serviceable addressable market, according to LegalZoom.
Over the years, LegalZoom has expanded to provide more legal, compliance, tax, and business services. Its compliance solutions are now the largest group of its subscription services, helping companies and individuals navigate federal, state, and local regulations. For instance, in most states, small businesses must have a registered agent to receive mail and court documents at a physical address during normal business hours. LegalZoom offers a registered agent subscription to digitize this process.
LegalZoom earned more than $134 million in the first three months of 2021 — up 27% from the same period last year. The growth was spurred by the pandemic, said legal-tech expert Scott Mozarsky.
“The pandemic really accelerated a secular shift to online legal services, as people became more comfortable doing everything online,” Mozarsky said.
As the pandemic winds down and the “offline” economy reopens, however, LegalZoom fears that the “tailwinds” created could slow down, according to its S-1 filing.
LegalZoom has faced several lawsuits and could encounter more legal hurdles
In the US, only licensed lawyers can provide legal services. LegalZoom has been sued multiple times for alleged unauthorized practice of law.
A Missouri resident who used LegalZoom to prepare a will and two other individuals who used it to organize a remodeling business filed a class-action lawsuit in 2009, alleging the company goes beyond simple form-production and broaches into practicing law. Another class action was filed in 2010, accusing LegalZoom of drafting a flawed estate plan. Both cases were ultimately settled in 2011.
“While we have denied and continue to deny all of the allegations and claims asserted in these proceedings, and we believe our services do not constitute the practice of law, unfairly compete, or otherwise violate the law, we cannot predict the outcome of such proceedings or the amount of time and expense that will be required to resolve these and other proceedings,” said LegalZoom in its S-1.
In some jurisdictions, LegalZoom has already begun taking on the role of a licensed lawyer. In the UK, its subsidiary operates under an alternative business structure that allows non-lawyer entities to become licensed providers of certain legal activities.
Despite the lawsuits it’s faced, LegalZoom has said it may consider implementing similar alternative structures in the US. Utah and Arizona recently began allowing non-lawyers to provide legal services.
Another potential legal hurdle concerns the gig economy. While the gig economy accelerated small business creation and expanded LegalZoom’s target market, recent legislation on companies’ treatment of independent contractors — like the attorneys and accountants on LegalZoom’s platform — could also expose it to employment liability.
Both Intapp and LegalZoom declined to comment for this story.
For more than a year, the unionized staff at the Center for Family Representation, a New York City legal nonprofit, has been locked in a labor dispute with management over a contract that could pay higher wages and increase job security.
CFR is like many other legal-aid groups, representing thousands of poor families in child-services disputes and, in turn, expecting its lawyers to work long hours handling hundreds of cases. In negotiations, the center’s lawyers and paralegals have been represented by the Association of Legal Aid Attorneys, a chapter of the United Auto Workers, one of the country’s largest and most influential unions.
CFR’s management has turned to Winston & Strawn. The white-shoe firm has represented companies in high-profile anti-labor cases in recent years — and even claims to have written parts of the 1947 Taft-Hartley Act, which limited the power of US unions.
Winston & Strawn, staffers have come to realize, also has a seat on CFR’s board.
“As a nonprofit, we are for the people. We’re trying to help people — especially indigent people,” Tiffany Moseley, a staff attorney for CFR, told Insider. “To have a law firm that’s anti-union working for a nonprofit is just unbelievable.”
CFR staffers aren’t alone. At least two other public-defense organizations — the New York Legal Assistance Group and the Children’s Law Center — have relied on anti-union law firms that have seats on their boards to advise them in negotiating against their own staff.
The tension has prompted a broader fight over the scope of the social missions of these nonprofits and the place of wealthy board members whose connections can keep the organizations afloat.
The dispute also highlights how big law firms are compensated for this work and raises questions about whether they’re using pro bono hours to try to defeat or weaken the unions. Law firms often tout pro bono work on behalf of nonprofits in the public interest and can benefit from limited tax breaks for the work. At least one lawyer for Winston & Strawn has used pro bono hours to block public defenders from organizing.
Lawyers at nonprofit legal-aid organizations are unionizing in record numbers
The tension at CFR comes amid a wave of unionization in New York’s legal nonprofits; at least 15 have formed unions since 2016. Membership in the Association of Legal Aid Attorneys has increased to more than 2,500 from 1,000 — a record, according to Alexi Shalom, a union spokesman.
In nine of those organizations, management accepted the unionization after a card check, according to the union. Some organizations, like Queens Defenders, have put up tough fights to block unions from forming, requiring secret-ballot elections by the National Labor Relations Board.
In New York City, public defenders aren’t public employees but are hired by private third parties that contract with the city. Legal nonprofits typically defend people who can’t pay for representation. They also tend to attract younger lawyers and paralegals who see their work as part of a social-justice mission like fighting systemic racism or inequality.
The workload, these lawyers say, is often grueling and can be far less lucrative than at a large firm representing corporations in contract disputes or securing intellectual-property rights. They are also compensated far less than their colleagues at big law firms. Last year, New York City passed a law guaranteeing public defenders pay parity with city lawyers, raising an entry-level attorney’s salary to about $70,000, according to two people with knowledge of the pay scales.
Staff lawyers say it’s ‘disappointing’ that their managers are fighting against the union
As unions have proliferated in recent years, staffers at these nonprofits have been disturbed by their managers’ connections with firms that typically bargain against unions, they said.
One of the main sticking points in negotiations is “just cause” protection, which requires employers to bring their reasons for disciplining or firing an employee before a mediator.
“That’s very important, especially for me, being a person of color,” Moseley said. “There were situations when people of color may have been fired back in the day because of no reason.”
While no staffers outright accused the boards of having conflicts of interest, they said they felt that working with law firms perceived to be anti-union was against the broader mission of their work.
“It’s really disappointing, and I think it reinforces my desire to have a better understanding of who is on our board and then what values they represent,” said Laura Diewald, a staff attorney at the Children’s Law Center. The organization, which counts the Epstein Becker Green attorney Marc A. Mandelman as a board member, hired another lawyer at the firm, Corey P. Argust, to represent management. The Children’s Law Center, Argust, and an Epstein representative didn’t return requests for comment.
When staffers at the New York Legal Assistance Group announced their intention to unionize in 2019, their management hired Proskauer Rose, which represents sports leagues and Columbia University in their fights against unions, to try to stop the union from forming.
“The fact that they hired Proskauer for some of their union-busting — there’s someone on the board from Proskauer — was just a huge slap in the face,” said Alice Hindanov, a paralegal at the nonprofit. “How does this line up with NYLAG’s mission? It doesn’t.”
Joseph Baumgarten, a co-chair of Proskauer’s labor-and-employment department, is on the New York Legal Assistance Group’s board. Baumgarten has a long history of representing management, but he has made some missteps, including getting dropped by the NHL for its handling of a discrimination case.
Proskauer hasn’t represented the New York Legal Assistance Group since staffers voted 152-29 to unionize in 2019. The firm didn’t respond to a request for comment. Louis DiLorenzo at Bond, Schoeneck & King now represents the organization in its labor negotiations.
Lawyers say there’s no conflict in representing management
At CFR, staffers expressed frustration that the board hadn’t reached out to staffers to hear their concerns and appeared to be siding with management.
“At the end of the day, I would hope that the board at my office would want to value the staff’s voices,” one CFR employee, who asked to remain anonymous, told Insider. “You would hope they’d be a little bit more neutral.”
A representative for CFR didn’t return requests for comment. However, the Winston partner on the nonprofit’s board, Jeffrey L. Kessler, has worked on the side of sports unions, including the National Football League Players Association and the National Basketball Players Association, his biography says. He is also representing the US women’s soccer team in its suit alleging that US Soccer underpays its players compared with male players.
“Winston & Strawn is proud of its pro bono association with the Center for Family Representation and I am personally honored to be a CFR Board member,” Kessler said in a statement. “There is no conflict between the work I do for professional athlete unions and the work of CFR, which provides free legal and social work services to families and youth and promotes social justice for Black and brown families.”
William G. Miossi, a Winston partner who represents CFR management in labor negotiations, told Insider he was approached by the board to represent it and denied that there was a conflict of interest in the firm’s relationship with the nonprofit. The organization has hired at least one other firm, Seyfarth Shaw, to negotiate against the union.
“Jeff serves as a volunteer board member to a charitable organization that provides legal services to needy people in New York City. We provide them some legal advice in connection with their labor contract for free as part of their commitment to legal services,” Miossi said. “Jeff Kessler has nothing to do with the bargaining strategy or tactics. If you were to ask him tomorrow, he wouldn’t have any idea what is going on.”
Big law firms use pro bono hours to show their social cachet
Staffers at some legal nonprofits expressed concern that their organizations were spending funds fighting the unionization efforts. While it’s unclear whether New York Legal Assistance Group and the Children’s Law Center are paying for their legal help, CFR hasn’t paid for Winston & Strawn’s work.
“We are providing legal services to CFR 100% pro bono,” Miossi said.
The American Bar Association encourages lawyers to work at least 50 pro bono hours a year, “with an emphasis that these services be provided to people of limited means or nonprofit organizations that serve the poor.” There is no requirement about using the hours for labor-related causes.
Aside from some limited tax breaks, the value that pro bono work gives big law firms is in social capital. Nonprofits like CFR have board members at Credit Suisse, New York University and Columbia Law, and other white-shoe firms.
Law firms often tout their pro bono work in marketing materials. Winston & Strawn, for instance, touts its work helping women get equal pay and protecting immigrants’ rights. In one case, it partnered with the unionized Legal Aid Society in a suit against the Port Authority of New York and New Jersey over an LGBTQ-discrimination case.
“It makes you sick either way,” the anonymous CFR staffer said of Winston & Strawn’s pro bono work on behalf of the nonprofit’s management, “but I would prefer they’re not paying for it, especially while we argue about money.”
Amy Chua is best known for 2011’s “Battle Hymn of the Tiger Mother,” a memoir about her childhood as the daughter of Chinese immigrants and her experience raising her own daughters. But she’s also known as Yale Law’s “pariah,” for a number of reasons:
This April, the Yale Daily News reported that Chua would be stripped of teaching a small class to first years after students came forward to the administration alleging that Chua was hosting dinner parties with alcohol for law students and “prominent members of the legal community” at her home.
Some students considered the debacle to be a result of a professor who had pushed the limits at Yale for years. Others saw it as an attempt to cancel a popular teacher because she supported her husband, Jed Rubenfeld and Brett Kavanaugh amid allegations of the men’s sexual misconduct.
Almost all sides saw it as the inevitable eruption of a long-simmering tension between the most elite law school in America and its most famous professor.
What is it really like for young aspiring entrepreneurs heeding Jason Calacanis’ call to change the world? To find out, we spoke with more than 50 people close to him, including portfolio-company founders, accelerator alumni, and current and former colleagues:
Crackling with energy and attitude, Calacanis is an unmistakable presence in Silicon Valley. The squat, Brooklyn-raised investor is often the loudest voice in the room, whether he’s preaching his philosophy for success (“do the work”) on one of his podcasts or expounding on opportunities to build the next Uber (he was one of its first outside investors in 2009).
For many young entrepreneurs with dreams of launching a startup and making it big in Silicon Valley, Calacanis is the first stop on the journey. A former tech-industry publisher, Calacanis has emerged as one the most sought-after suppliers of “seed funding,” the small sums of money that early stage startups raise to see whether their ideas have legs.
The money isn’t the main draw, though. Mixing showmanship, bravado and an assortment of media megaphones, Calacanis has built a one-man brand that touts the glory of tech startups with infomercial-like zeal — and casts him as the astute coach, talent agent, promoter, and gatekeeper to achieving success in the game.
Consider, for instance, the millennials, some of whom are embracing what The New York Times calls the YOLO economy — a happy-sounding acronym for “you only live once.” They’re quitting stable, high-paying jobs to travel, write screenplays, and take advantage of the freedom and flexibility of remote work by moving to exotic locales.
In that same vein are the baby boomers — millions of whom are exiting the workforce years earlier than planned because of COVID-19. Fortified by fat 401(k) accounts and appreciated home values, they’re, according to Bloomberg, in a “rush to retire in a new life-is-short mindset.”
Hill staffers have put up with low wages for years, with some starting in the high $20,000s. We spoke with 14 current and former staffers, who discussed how low pay affected their lives:
Several days a week, a Capitol Hill intern would rise before dawn to take the bus not to her congressional members’ office but to a Starbucks, where she worked 5:30 a.m. shifts before heading east to start her unpaid full-time internship.
On other days, she left the hallowed halls of Congress at dusk, exhausted, only to work several more hours as a barista giving other Washingtonians their energy fix.
She ultimately survived the internship and landed a full-time job working for a member of Congress — but the starting pay of $32,000 still wasn’t enough to cover her financial obligations.