Consul™ Is Here

New York based General Counsel-as-a-Service provider Connett P.C. is excited to announce the launch of the proprietary legal operations software Consul™ - a new intelligent platform designed to simplify B2B legal and compliance tasks for growing businesses and in house teams.

Developed by general legal practitioners and technology lead Andrei Bondarev (Founder, Sourcelabs.io) the Consul™ founding team aims to deliver both out-of-the-box and bespoke solutions to satisfy the needs of the modern legal department.

The beta release of Consul™ will initially be available to select clients and will compliment Connett P.C.’s current service offerings in the areas of contract management, intellectual property, corporate governance and regulatory compliance. Consul™ will also be available as a “white label” service offering.

SCREENSHOT: Consul

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“Based on our research, 99% of U.S. businesses cannot afford even the most basic legal services, despite an environment of increasing regulatory risk and complexity” says Founder & CEO Ian Connett, Esq. Consul™ aims to drive down the cost and increase access to B2B legal support by offering a subscription based model to an entirely digital supply chain, connecting end users to an array of providers and solutions within a single ecosystem.

In addition to connecting end users to digital legal services, Consul™ features an intuitive dashboard and user experience designed with modern in house professionals and business teams in mind. For example, the Consul™ interface enables fast and secure matter intake, attorney chat, document collaboration, storage and risk analytics across the entire legal portfolio.

The recent launch of Consul™ beta comes at a time when the global workforce is transforming digitally, demanding innovative solutions and new ways of processing high volume legal and compliance workflows. Experts predict alternative legal providers or “legal process outsourcers” (“LPOs”) like Consul™ to constitute nearly 30% of the $1 trillion global legal services market in the coming years.

Learn more about the Consul™ team: https://www.connettpc.com/team

Learn more about Connett P.C. subscription legal: https://www.connettpc.com/support

Join our mission to fix B2B legal: https://www.connettpc.com/careers

Cap Table In Trouble? Talk to us.

Cap Table management is an overlooked, but very critical component of your company's overall legal health.  

That's why Connett P.C. is excited to announce our new partnership with with Carta® to offer it's robust platform to all of our clients. Carta® helps companies and investors track and manage cap tables, valuation, investments and equity plans.

We're proud to be one of the first technology enabled law firms to offer Carta® Launch to clients. When our clients elect to utilize Carta® through us, they'll have their Carta® initiation fees waived and receive a 20% discount on their annual subscription to Carta®.


Adding Carta® to your plan allows us to easily assist you with issuing options, keeping cap tables up to date, and staying compliant. Scenario Modeling also allows us to best advise clients when it’s time to start fundraising, eliminating the need to spend hours reconciling different cap table versions.


We strongly advise all clients to take full advantage of this exciting opportunity. If you are interested in adding Carta® as part of your account with Connett P.C.. Contact us at legal@connettpc.com to start the on-boarding process today!

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Getting Smart on SAFEs. What your startup should know about SAFE investments.

“An investment in knowledge always pays the best interest.” - Benjamin Franklin

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If you’re an entrepreneur seeking capital for your startup, then you’ve likely already heard about the “Simple Agreement for Future Equity” or “SAFE.”

Engineered by Silicon Valley accelerator Y Combinator, SAFEs are designed to provide a simple, clear, and fast way to legally raise capital without interest rates and maturity dates.  That’s true, at least in theory!

So, what should your startup or investors know before signing a SAFE? Below are some thoughts to help you get smart on these new investment vehicles.

A SAFE is considered a “convertible security” that allows an investor to provide a cash loan in return for equity at a future priced round.  SAFEs are attractive to investors for two reasons.  First, it provides “discount” and “valuation cap” provisions when it comes time to convert.  Second, it includes early exit payback provisions whereby the full amount of the SAFE note can be paid to the investor in the event of an acquisition or change in control.

Thinking of doing a SAFE investment or want to learn more? Below are 5 additional points to increase your knowledge of SAFEs. You can also contact us at legal@connettpc.com to learn more about how SAFEs can help secure new investment without a ton of paperwork and (legal fees).

1.     SAFEs are for Corporations.

You should be structured as a legal corporation to offer SAFEs.  The SAFE issues your investor a special class of “SAFE stock” come conversion time.  A corporation is generally the only type of legal entity that can issue shares of stock, providing ownership in the company, voting rights, and dividends.  If your business is already organized as a limited liability corporation or LLC then you may not be eligible to offer SAFEs because LLCs have “membership interests” as opposed to “shares.”  Check your state’s laws or contact us to see if it’s possible for your entity to issue a SAFE.

2.     SAFEs are still relatively new to the investment game.

SAFEs are still relatively new, even to experienced investors. Many investors, and even some corporate finance attorneys, are still uncomfortable with signing SAFEs.  For example, many are more comfortable with a “convertible note.”  Keep in mind, a SAFE is a simpler alternative to a convertible note, but a convertible note may still be a more attractive option to an investor because it’s more established and offers unique favorable terms.  Convertible notes may include interest and maturity rates. SAFEs do not.  If your potential investor is not well versed in the SAFE structure, you could engage an attorney to explain it simply or send them this SAFE Primer to review.  Good luck getting them to read it!

3. SAFEs require some negotiation skills.

While SAFEs are designed as investment templates, some skillful negotiation is still required.  SAFE notes are generally less flexible than convertible notes.  As previously mentioned, SAFEs do not include interest rates or maturity dates.  In turn, your investor may insist on a lower value capitalization or a higher discount rate.  A lower value capitalization rate and higher discount rate increase the likelihood that your investor is able to purchase more shares once conversation time arrives. As the issuer, you may want to negotiate these rates, so you do not end up giving away more equity in your company than desired.  On the other hand, as a first-time startup in need of capital, you may not have a ton of leverage to negotiate favorable rates. 

4.     SAFEs work best with cap tables.

Because most SAFEs use a valuation cap to determine the appropriate price per share, founders issuing SAFEs should understand basic “cap table” math.  A basic capitalization or “cap table” is usually contained in a .xls spreadsheet or third-party software like Carta.com, which tracks all of your company’s securities (i.e., stocks, options, and warrants) and owners. Your “fully diluted” cap table assumes all convertible securities will eventually convert to equity and decodes the percentage ownership in the company for each of your investors.  Understanding your cap table in advance reduces the chance you’ll have more dilution than anticipated, preventing you from owning less of your company than originally planned.

5.     No SAFE-ty in numbers.

Beware of issuing too many SAFEs for a single startup. A higher number increases the risk of giving away too much ownership of your company, which could potentially bar you from raising a subsequent equity financing round with a new lead investor such as a venture capital fund.  Venture capitalists generally need to meet their fund’s required ownership targets to achieve a desired rate of return on investment.  Prior to signing a SAFE, you should ask whether a SAFE is setting your company up for success for a future priced equity round and presents the best “strategic” option for your current stage of development, not just the fastest.

Still thinking of doing a SAFE or want to learn more about cap table management? Contact us at legal@connettpc.com to get it going.

NYC Bar Recap: AI, Legal Ops and Your Business Opportunity

Lawyers, law students and legal professionals can no longer afford to ignore artificial intelligence.

That was made clear as Connett P.C. Founder Ian Connett spoke to a packed house at a recent New York City Bar Association panel hosted by Jurdu Co-Founder, Jon Strom, dissecting the impact of artificial intelligence, machine learning and automation on the once immutable legal profession.

Rapid technological advancement, ignited by the emergence of the exploding “Legal Tech” sector that recently reached $1 billion in new investment is driving a healthy cause for concern amongst legal professionals. Many are asking big questions.  Will AI take my law job?  What law jobs are “safe” from automation?  What new law jobs will be created as a result? Most importantly, from clients, how can new AI tools help legal services delivery at my organization, improving overall results while mitigating legal risk?

Connett P.C. joins packed New York City Bar panel discussing AI threats and opportunities on the legal sector.

Connett P.C. joins packed New York City Bar panel discussing AI threats and opportunities on the legal sector.

While the threats of job loss are real, so are the opportunities, for those willing to come to grips with the AI revolution, seeing these new tools as assets (as opposed to enemies) to be deployed alongside human professional services for the cause of improving client satisfaction. No where is this opportunity more visible than in the rising legal operations (“Legal Ops”) vertical, where in house counsels and alternative legal service providers (“ALSPs”) are putting AI to work on delivering innovative solutions to clients who are happier as a result.

Below are some examples of legal verticals where AI is having a significant bottom line impact. Want to learn more about how AI can streamline legal work at your business? Contact Connett P.C. today to put AI to work on improving your legal operations.

Contract Management

The waves of AI disruption are most visible in the contract management space. It’s not hard to understand why if you consider that 70 percent of companies can’t locate 10 percent or more of their written agreements.

Between risk and inefficiencies, your organization could be losing thousands unnecessarily. AI and machine learning simplify many contracts related tasks, like drafting, on-going obligations management and extracting key business terms. There now exist a variety of proprietary platforms using machine learning algorithms and “natural language processing” to review thousands of documents instantly, locating critical business data and providing timely analysis to the tech-savy legal operator.

eDiscovery

As a legal vertical, “eDiscovery” continues to grow at an astronomical rate, due in large part to AI technology. In fact, the global eDiscovery market is estimated to reach $17.32B by 2023 with an annual growth rate exceeding 10.0%.

New and improved eDiscovery platforms have emerged from the recent influx in Legal Tech investment. These platforms, increasingly powered by AI, enable in house legal operations specialists and outside expert litigators to search, analyze and now “visualize” the eDiscovery process. Many are cloud hosted, promoting a frictionless eDiscovery process helping litigation clients build the most comprehensive case possible within a simple and intuitive UI.

Mergers, Acquisitions & Finance

A recent Deloitte study on M&A trends showed that 79 percent of firms expect the number of deals they close in the next 12 months to increase. That’s up from 70 percent last year.

With this increase in general deal flow, M&A outfits are on the hunt for new technology to provide that crucial competitive edge. Many firms have been developing machine learning algorithms and AI to assist in the M&A transactional process. These new tools are now increasingly qualified to assist in such tasks as quantitative target analysis, connecting disparate data sets, due diligence and more.

In the world of Finance, JP Morgan announced in 2017 the successful completion of over 360,000 hours of legal work in seconds through the implementation of new AI and machine learning software, freeing up in house legal teams to focus on new kinds of work. AI is also poised to play a significant role in financial risk management, credit decisions, fraud prevention and personalized banking. While large financial institutions have reaped the initial benefits, small and medium sized institutions will increasingly join in on the action as AI technology scales and becomes more widely accepted, if not demanded, by financial services customers.

Is your company struggling with complex legal operations? Contact Connett P.C. today to put AI to work on improving legal operations at your business.

What Business Owners Should Know About California's New Privacy Law

The Golden State recently enacted the strictest privacy regulation in the land.

Superseding any Federal law currently on the books, the California Consumer Privacy Act or “CCPA” imposes strict compliance obligations on businesses operating both inside and outside the State of California. The CCPA additionally confers broad privacy rights to Californian consumers similar in scope to those protected by Europe’s counterpart “GDPR” legislation.

So what should business owners know about this new privacy law? Here are some nuts and bolts on the Golden State’s latest privacy law.

Is your business prepared for the CCPA?

Is your business prepared for the CCPA?

There are three (3) broad requirements to determine whether a business must comply with the CCPA. Importantly, the new law does not require any physical presence in California to apply to your business. If any of the below is true, then the CCPA may apply to your business no matter where you call HQ.

  • Have a gross annual revenue in excess of $25 million.

  • Annually buy, receive for commercial purposes, sell or share personal information of 50,000 or more California consumers, households or devices.

  • Derive 50% or more annual revenue from selling California consumers personal information.

The CCPA also expands the definition of “personal information” to include IP addresses, geolocation data, biometric information and “unique identifiers” like device and cookie IDs and internet activity information.

As for damages, the CCPA allows for the recovery of monetary damages ranging from $100 to $750 per consumer, per incident or actual damages, whichever is higher. The AG of the State of California is additionally authorized to bring prosecutorial actions for civil penalties up to $7,500 per each “intentional” violation of the law.

With all the recent hype around data beaches and consumer privacy concerns, the CCPA may have an added aftershock of paving political pathways for other jurisdictions, including local municipalities, to pass similar legislation. As of this blog post, several other cities and states are in fact considering passing similarly protective laws, including Washington, Hawaii and the City of Chicago.

Having a proactive compliance counsel and technical plan to address the CCPA and future legislations is critical for any growing business, especially those handling consumer personal data. If you are concerned about the impact of this bill on your business, please contact us at legal@connettpc.com to schedule a free consultation call or compliance audit.

Read the full text of the California Consumer Privacy Act here: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB375