Corporate finance lawyer James Farha discusses what it means to run a product driven law firm and the challenges of setting up a new law business, how preparation is key from fundraising to selling a business, and his first hand experience with the Future Fund.
With a wealth of experience in supporting start-ups and high-growth businesses in their fundraising rounds, James highlights the challenges and some essential tips for new and growing businesses:
Listen to this fundraising edition of Shieldcast to find out!
Geoff: James is a managing partner of Farha – a product-driven legal practise, working with start-ups, high growth businesses, individuals and SMEs. James started his career at Freshfields moving to Kirkland & Ellis before deciding that the tech and start-up world was a better place to be. James and I have known each other for a very long time, we have forged a very similar path through life, so it's great to have you here and on the Shieldcast. I'm looking forward to our conversation today, which I'm sure will be of interest to many lawyers in spaces as well as companies looking to fundraise.
To start things off James, tell us a little bit more about Farha, the make-up of your team and the type of work that you guys do.
James: Sure. So, we're a small, corporate boutique firm. Essentially, we do fundraising work for the most part, or at least we meet our clients when they're fundraising and most of our clients are Series Seed to Series B, creeping into C and hopefully into D. We're a team of six at the moment, we have a mixture of corporate and commercial skills, and we provide a hub and spoke model for the specialism so we have access to good quality tax and employment lawyers and IP specialists.
And we're growing organically, essentially as we go. It started off just with me a few years ago, back in 2015 – I guess the original iteration of the firm – and in 2019, we incorporated a new entity, became fully SRA regulated under our own right and was building a practice from scratch.
So we started looking for early stage clients who were early stage, not yet represented, and grow alongside them, and that has been working well. We had clients that we'd known since they were an idea on a piece of paper who have grown to Series B stage, even done an acquisition for one of those, and they are now doing very well and hopefully will be very successful over the next few years. We’re increasingly targeting the clients and the series seed-B level, because that's a place where we can add the most value.
We can talk about it later, but you know what the difference between the early stage stuff is the very early stage and those clients. We try to build long-term relationships with, and service our clients throughout the cycle of the year, so that usually means a fundraising event and then providing a kind of outsourced general counsel – a service where where we help them with, through issues.
We often provide me as a high-level advisor to the board or the founders or combination of the two, and then the rest of the team and me can service their ongoing needs, whether it's commercial contracting, preparation or review, NDA review, employment issues and everything in between, essentially.
Because we have that relatively wide view across industries in the market, we can help people solve issues that we've come across before. So, we tend to find that the founders that we're very close with, that we work with on that kind of basis come to us for questions and information on a fairly regular basis and we try to be helpful and promote new ideas that we come across to the people we think would be good candidates for them.
Geoff: That's really interesting. You labelled the firm as being product-driven and with that the narrative, what do you mean by that? What is product-driven law?
James: The way our practice is going, is dividing into two core elements: One is around the advisory element, which is helping people get to the right solution to their problem. And then the other is around just things that we know that they need, which is essentially around documentation. But there's usually with any documentation a level of analysis that needs to go in before you get to the right document and then before you structure the document correctly.
So the document piece is pretty predictable and you can do it on a fixed fee basis, or in some cases we're looking at rolling a program of work into an ongoing retainer where we set over the next six months, we're going to help you build these processes or documents inside the company, or policies or whatever it is, and we'll do that. This is how we're going to schedule the work in and we'll get it done for you over that period, sometimes it's just a one-off. EMI Options Scheme is a great example, and we also do quite a lot of productised work in the very early stage where we're trying very hard to keep costs controlled and down, but provide the value and certainty that early stage businesses need. Early stage is actually a very complicated place to practice law because of the cost constraints.
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