Following on from the “featured client” insert which appeared in our May newsletter, we managed to pin down the co-founders of WooThemes to hear what they had to say about their experience working with our law firm, especially in light of the “WooMattic” transaction, as it has affectionately come to be known among the transaction team.
Why is it important for a law firm to build up a sound knowledge base about their client’s products and industry?
WooThemes is surrounded by an interesting tech ecosystem – the open source software world. Selling commercial software products for an open source platform comes with its fair share of niche license legalities and grey areas, especially around the GNU General Public License.
This, coupled with a good grasp of our intellectual property, where it is being generated, and an understanding of our international business is hugely important context for our legal team to make well informed recommendations.
What core skills should a law firm have?
Beyond an understanding of our ecosystem, it’s important for a law firm to have a genuine interest in the open source philosophy and legalities and to further believe in the values we operate with and carve out commercial protection around them. At WooThemes we always gravitate towards start-ups and more specialist companies with a hunger for catering for our niche requirements and providing customised solutions. Relationships matter to us, so it’s been great having a personal connection with Dommisse Attorneys and the specific attorneys dedicated to us. Two skills that are crucial are diplomacy when dealing with different parties and to be honest and upfront when navigating an area they are not particularly well versed in and willing to connect you with a network that is.
Communication is always a potential pitfall; so how can attorneys ensure that they communicate in a way that fits with your company’s style?
We’re a distributed company of remote workers, with co-founders on different continents. We thrive on communication systems like Slack, Google Hangouts and Skype to connect with our team of 55 people spanning 18 countries (and a lot of different time zones). Working with lawyers who understand how we communicate and are willing to adopt our processes has been refreshing. It’s also encouraging to see legal firms willing to adapt and embrace the change that the Internet brings.
What is the most valuable role that a law firm can play in a significant transaction, like the sale of WooThemes to Automattic?
Given that we were ill equipped in the areas of investments, mergers and acquisitions and due diligences, a significant role for our attorneys to fulfil was to facilitate and provide expert guidance to us, as well as maintaining an objective view of the deal and being able to help guide the negotiations. A role all start-ups’ attorneys’ should be able to fulfil is to humanise legal jargon and take the pain out of digesting lengthy contracts, highlighting the important items, whilst being willing to make judgements on other more minor points based on their understanding of the client (reading the client’s workloads and stress levels).
Just as important as the acquisition, is to ensure a healthy pace through a nerve wracking due diligence, whilst ensuring no areas are left uncovered. In a transaction of this nature, ensuring over-communication, especially when dealing with so many different attorneys on the other side of the transaction, was vital.
What is the worst way a law firm could behave in the course of a deal like this?
When it comes to dealing with a company like WooThemes, a crucial failure would be making assumptions that the client has read all the legal contracts in the same detail that the law firm has! Also, not being willing to adapt to the communication needs of the client or the acquirer can put the transaction at risk. Trying too hard to impress the wrong client by losing focus of your client’s needs, as well as taking a long time to communicate, both to the client and to the acquirer, could have equally severe consequences.
One of the most important things to remember is that when it’s crunch time, don’t rush through the all-important last terms and amended agreements, and worry about missing a deadline rather than ensuring the client has all the information they need to make the best decision.