Bloomberg: Wilson Sonsini’s Next Automation Project Is Its Startup Practice

Jim Chinh Nguyen’s young company providing on-demand English tutors for Vietnamese students was coming out of stealth mode, had recently attracted investors, and needed to get serious about its legal structure.

So, a few months ago the Schoolbird founder reached out to Wilson Sonsini Goodrich & Rosati, the law firm he’d used to incorporate a startup in 2008. Back then, he sat down with partners and paralegals, trying to answer questions he wasn’t quite sure were relevant. This time, the firm emailed him a link which led to a questionnaire that would form the basis of his legal documents.

“Everything is done on the cloud now, so the idea I could upload all my relevant information without talking to anyone to get legal work done was a huge time-saver for me,” Nguyen said in an interview.

Wilson Sonsini is launching a digital transformation strategy for its startup practice with an ambitious goal: Every piece of work that should be automated will be automated. The strategy will largely be accomplished through the digital services platform dubbed Neuron that Nguyen interacted with and the firm unveiled this week.

Wilson Sonsini has one of the oldest and most active legal practices representing startup companies in Silicon Valley, having helped the likes of Apple Inc., Google, and Lyft Inc., go public. The firm brought in more than $1.1 billion in revenue in 2020 and its average partner earned more than $3 million in profits, according to AmLaw data.

Wilson Sonsini said Neuron took more than two years to develop and automates many of startups’ legal needs including incorporations, capitalization management, corporate maintenance, and financings. Those will get done in a “fraction” of the time the traditional method required, the firm said.

The tool will also be where clients interact with Wilson Sonsini lawyers, allowing them to digitally request and receive more in-depth advice on top of its automation capabilities. Nguyen, for instance, jotted down questions for the firm’s lawyers in the questionnaire he filled out. The answers were sent back within a day or two, he said.

Wilson Sonsini also provides tech-focused client services through its SixFifty subsidiary, which the firm’s leaders view as selling automated legal products that aren’t likely to require additional lawyer advice. So far, SixFifty has sold automated products around data privacy laws and employment law policies. The firm also has invested millions in a contract management platform, Lexion.

“With our portfolio of projects we are accumulating experience, relationships, and know-how so we can tackle this problem of changing our core business,” David Wang, the firm’s chief innovation officer, said in an interview. “And it will work together so we can deliver something which is like the promise of Neuron: that the automation delivers everything that should be automated and nothing that shouldn’t be automated.”

Automated questionnaires have long been a staple of tech-focused legal providers like LegalZoom, which says it processed 378,000 business formations in 2020. Most of the company’s work is automated, though it sells some subscriptions for follow-on legal services.

It’s unlikely Wilson Sonsini’s clientele—typically startups that have or will receive venture investments—would find LegalZoom a suitable option, Wang said.

“We are not trying to incorporate bowling alleys,” he said, noting that most of the firm’s clients require personalized advice from its lawyers. “Our clients require and expect that level of service, but they should also get the benefit of digital automation at the same time.”

Wilson Sonsini’s Raj Judge, co-chair of its emerging companies practice, said Neuron is far from a tool to fill out questionnaires. It’s a new way for lawyers in the firm’s emerging companies practice, or ECP, to interact with clients. The firm will also track digital data from Neuron to learn more about its own services and improve them over time.

Judge said the firm plans to announce more capabilities for Neuron this year.

“This is really a part of a larger strategy of the firm and the ECP in particular to truly disrupt the startup legal industry,” Judge said.

As for Nguyen, he said he could already envision more ways that he could work with Wilson Sonsini through the Neuron portal. It could help him understand the company’s equity structure under hypothetical future investments, for instance. But perhaps more to the point, he said it was a much more comfortable and efficient way to interact with lawyers than what he’s been used to.

“It’s kind of built into my idea when you think of working with lawyers: ‘Oh my god, it’s like $900 an hour— we don’t want to go there,’ Nguyen said. “But I was pleasantly surprised.”