By Hunter Farrell
About ten years ago, I went to a meeting at a prominent Los Angeles law firm to negotiate a license agreement. At the meeting, two partners from the firm’s intellectual property group represented the company on the other side of the deal. When I explained to them that I specialize in technology transactions law, they were completely baffled and asked numerous questions about the scope of my practice.
More recently, during my time networking in the L.A. technology community, I have found that many companies here don’t use technology transactions (“TT”) attorneys. They understand the need to use corporate attorneys for formation, governance, financing and M&A, but they don’t understand what a TT attorney is or the benefits of using one.
In this post, I want to explain briefly the role of a TT attorney. In my next post, I will discuss why companies should carefully think about using a TT specialist.
A TT attorney is a specialist in handling commercial transactions that involve the development, acquisition, use and/or commercial exploitation of technology and intellectual property assets. The TT attorney assists clients in the these transactions by structuring, drafting and negotiating contracts, as well as by providing strategic guidance and advice.
The following are examples of transactions and matters that a TT specialist typically handles:
- professional services and consulting relationships
- software-as-a-service (SaaS) customer relationships
- data and content licensing
- software, website, mobile apps and video game development and distribution
- online advertising and marketing services, including SEM/SEO
- non-disclosure and confidentiality
- source code escrow
- strategic relationships and joint ventures with a technology focus
- manufacturing and other sourcing agreements
- intellectual property asset purchases and sales
- online terms and conditions
- advice regarding privacy and the protection of intellectual property rights
As this list shows, the TT attorney helps the client buy, sell, license or develop the technology-based products or services necessary for the client to operate its day-to-day business.
In my opinion, a pure TT practice does not directly handle other matters such as corporate finance, mergers and acquisitions, securities, corporate governance, employee compensation, tax, real estate or litigation. So, for example, TT attorneys do not normally manage corporate acquisitions or private equity financings. However, the TT specialist should have sufficient familiarity to collaborate effectively with specialists in those areas as the need arises. As part of a corporate acquisition, for example, the mergers and acquisition team may bring in the TT attorney to assist with the interpretation of licenses previously drafted by the TT attorney or to put in place missing license agreements necessary for the acquisition to move forward.
Often, TT specialists have worked as a lawyer (or, in some cases, as a non-lawyer) at a technology company. I think this experience is extremely beneficial, as it allows the TT attorney to have a better understanding of the needs and roles of the executive, business development, sales, IT and marketing teams at client companies. Attorneys who have worked as in-house counsel will also have greater insight into the pacing and efficiency that clients expect in technology deals.