Verified Expert Lawyer: Jared Verzello

TechCrunch is profiling great startup lawyers wherever they may be working — and that includes within new companies built from the ground up around tech. Today, we’re interviewing Jared Verzello of Atrium. While even the most old-line of law firms have begun integrating document automation and analysis software, Atrium started that way. Around two years old, it’s both a full-service corporate law firm, Atrium LLP, and a technology startup, Atrium Legal Technology Services, that focuses on building tech for its clients and lawyers.

For his part, Verzello joined Atrium 18 months ago from Silicon Valley law firm Cooley LLP, and heads up the seed stage practice. In the interview below, he tells us how he got into this position, how he works with startups from within Atrium, and trends he’s seeing in the market today.

On common founder mistakes:

“Having represented over 20% of Y Combinator (YC) companies for the last few batches, I come across many of the same founder mistakes. One of the more common is that a founder will choose to incorporate as an LLC because they can write off a bit of the losses on their personal tax return.

“As a very early-stage company, one can be exposed to so many vulnerabilities and even potential bullies when it comes to legality. Jared (my attorney) has been knowledgable, understanding, and adaptable and the value of that to a startup cannot be overstated.” Leslie Fong, San Francisco, founder and CEO, VENIM

“But by the time they’ve decided to work with YC, they usually have raised money — often in the form of a convertible note — and they end up having to flip their LLC to a Delaware corporate (YC only invests in Delaware C-corps). What founders don’t realize is there are partnership tax issues for converting with debt outstanding in the business. We end up having to do conversions with $25,000 or $30,000 in legal fees and bring in tax and accounting specialists because a founder got some misguided advice at the very beginning.

“What I advise is that founders should not cut small short-term corners like incorporating as an LLC vs Delaware C-corp if they know they want to be venture-backed.”

On his approach:

“My goal, and Atrium’s goal, is to provide both legal and business advice so that our founders can worry about finding product-market fit or keeping money in the bank versus worrying about legal. My objective is for our clients to be protected but to spend little or no time thinking about legal.

“I always advise my clients that they should not be interested in being innovative in their legal structure. In order for startups to move quickly, the legal should be simple to administer, simple to understand, simple for investors to get on board with, so they can focus all of their brain power into the products and competitive advantage of the business.”

On Atrium:

“When engaging with Atrium, our clients are first and foremost engaging with a law firm but to know if it’s the right fit, I usually try to gauge what type of firm and relationship they want. For example: do you want a firm that’s doing business the same way they’ve always done business, for decades, or do you want a firm that thinks innovatively, like you, and has a key objective to improve their services and operational efficiency over time?”

Below, you’ll find founder recommendations, the full interview, and more details like their pricing and fee structures.

This article is part of our ongoing series covering the early-stage startup lawyers who founders love to work with, based on this survey and our own research — the survey is open indefinitely so please fill it out if you haven’t already. If you’re trying to navigate the early-stage legal landmines, be sure to check out our growing set of in-depth articles, like this checklist of what you need to get done on the corporate side in your first years as a company.

The Interview

Eric Eldon: You’ve ended up in a pretty unique place, in terms of a legal career. Tell me more about how that happened.

Jared Verzello: I’m not a Silicon Valley insider. I’m not from this area. I grew up in Georgia and Connecticut, and I knew nothing about technology companies or any of that stuff when I chose to go to law school. I had an independent reason for going to law school, which is I thought I wanted to do courtroom and trial work, and a lot of the things that you would see lawyers portrayed as in the media, and that’s a whole other can of worms about making long-term education decisions early in life, when you have limited life experience.

But suffice it to say that, once I was in law school, I quickly found out that I was not interested in those more formulaic areas of law. I found them very constraining and not very interesting or creative. Every year students go out and they find the best internships and placement programs that they can get into, they build their resume, as do we all in our schooling, and I found that I wasn’t interested in anything that was available to first-year law students.

I went to Brigham Young University. I was in Utah. I was not in Silicon Valley exposed to all this stuff. But all of my peers were going to go work for judges or volunteer at one institute or another, and I just could not find anything that was interesting to me. But I had a friend who had come out to Silicon Valley several years earlier and ended up raising some money, and they actually raised a decent Series A. This was back in 2011. They were a super lean team and suddenly the biggest blocker for them was hiring. They needed to hire engineers. So long story short, I spent my entire summer here working in Palo Alto, helping them recruit engineers and we recruited over a dozen engineers in four months, which was pretty phenomenal.