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Perspectives

The Road to ‘Yes’

How In-House Legal Departments Can Use Curiosity and Creativity to Advance Novel Ideas in the Startup World

Heather Stevenson Presenting At All Hands 2023 Photo By Persons Name Here

In-house legal departments often have the unfortunate reputation of being the “Department of No.” Seen as impediments to progress, they are perceived as places where innovative concepts go to die. Unfortunately, the reputation is not entirely undeserved. Many legal teams default to rejecting novel ideas and business strategies in a well-intentioned, but ultimately problematic, effort to protect the company by reducing risk.

But it doesn’t have to be that way. In my role as Red Cell’s General Counsel, I work hard to ensure that instead of being a roadblock, our legal department is an enabler of progress and a true partner to both Red Cell and the incubations that we support.

I started my legal career defending multi-billion-dollar securities lawsuits, so I’m acutely aware of what can happen when things go wrong for a company. I understand and appreciate the importance of mitigating risk, and I am committed to doing that.

But between my time in big law and my first in-house role, I founded and ran a business. There, sitting in the role of the client rather than the advisor, I learned an important lesson: effective advisors, be they lawyers or other specialists working with a business, add the most value when they approach potentially risky or tricky situations as opportunities for creative solutions, rather than landmines to be avoided at all costs.

I knew when I took my first in-house legal job that I wanted to do more than just help companies I work with reduce their legal risk. I wanted to be a partner to the business and to help them grow.

So what does this look like for me in practice?

First, I’ve trained myself to ensure that “no” is not my default response. When a business colleague poses an idea that sounds like it could expose the company to legal liability, it’s a scary moment for me and my team. In my view, it’s okay – probably even healthy – for us to feel anxious. But we can’t let our knee-jerk reaction translate into shutting down a potentially good idea before we’ve dug into all the possibilities. We need to get past the visceral response to figure out if there is a way forward.

Red Cell’s former incubated company, TARA Mind, is a great example of a business that could have received an early “no” simply because it operates in the legally complex realm of psychedelics. But we didn’t say no. Now an independent company with a completed series seed fundraising round, TARA Mind offers employers the opportunity to make FDA approved psychedelic-assisted therapy available to employees as a supplemental benefit.

Second, I work hard independently and with my team to make sure we understand the objectives of any idea that our colleagues bring to us, rather than just the proposed approach. Many times, a colleague has come to me with a proposed course of action that seems likely to be tricky to navigate, but when we dig in, I learn that they don’t actually care about any of the tricky parts and are equally happy with a different approach that arrives at a similar outcome.

Third, I approach everything with curiosity. This means asking a lot of questions like, “What if we tried it this way?” or “What if this assumption we’ve been making about this law or industry isn’t right?” or “What if X changed?” Curiosity won’t always get us to “yes,” but it helps constructively open up possibilities that we might not previously have been able to identify. As an incubator innovating in rapidly developing industries, it’s important for us at Red Cell to see these possibilities.

Fourth, my team and I work hard to develop excellent working relationships with our colleagues. It helps that we work with great people. The legal team meets regularly with Red Cell’s incubated companies, and we talk frequently with our business colleagues who are developing ideas that haven’t yet become incubations. We hope that because of these relationships, colleagues bring their ideas as well as potential challenges to us early so that we can help craft a creative approach to reaching the goal without ever getting into a sticky situation.

Are there times when, after digging into all the possibilities, we determine that an idea just isn’t viable for legal reasons? Of course. But we make sure that we only make that determination after exploring the problem with curiosity and creativity, and when we can, we pose an alternative option instead.

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