Take a few lawyers, give them microphones, and ask them to discuss HBO’s satirical tech-focused series, Silicon Valley. The result is a very cautious and thorough consideration of the myriad of legal issues involved in the story’s plot.
Really, you’d think they do this for a living, or something.
On Tuesday, law firm Morgan Lewis & Bockius hosted a small talk about the show’s third season at its Palo Alto, Calif. office. Silicon Valley, which debuted in 2014, centers around a young startup, Pied Piper, and its quest to build a powerful technology to compress files while navigating the typical challenges of the tech industry. Led by firm partner Christopher Banks and associate Lucy Wang, the group discussed a variety of legal business topics as they ran through the season’s plot.
This wasn’t quite like the typical conversations I have about the common challenges of running a startup with entrepreneurs, investors, and fellow technology reporters. There was less “disruption,” and more “fiduciary duty” discussed.
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Duty of care, good reason triggers, co-employment risk—it’s immediately clear these attorneys are very concerned with playing by the rules. The PowerPoint presentation even included the very important disclaimer that their comments shouldn’t be taken as legal advice (hire them for that!) and that the video clips were posted publicly on YouTube by HBO. No illegal use of media here!
As the audience munched on sushi and chicken skewers, the panelists warned of the dangers of the founders having unclear job duties, the legal dynamic between CEOs and their company board, protecting intellectual property rights, and how to determine the appropriate amount of severance for laid off employees.
“I actually thought, ‘Oh, that’s gonna be a major plot for the season,’” Banks said about the fictional startup in Silicon Valley laying off its new sales team—and mostly failing to follow labor laws in doing so. While the sales team departed without much fanfare on-screen, they likely should have received a 60-day notice about the firings if it were a real company.
“I definitely think the show should have more lawyers,” said Wang, summing up the entire discussion.
But most interesting was the event’s timeliness. In the last several months, multiple tech companies have committed legal blunders.
Among them, have been blood testing company Theranos, whose technology was called into question in a series of reports by the Wall Street Journal. The company is now under federal investigation while its founder deals with a two-year ban by regulators from operating a lab.
There’s also Zenefits, which named a new CEO in February after it discovered that its co-founder had built software to help employees skirt licensing requirements to sell insurance in California. And more recently, Tesla has been in the press after it revealed that its semi autonomous driving technology, Autopilot, was engaged during a fatal crash in May. Tesla has made it clear that it considers its feature as being in “beta” mode, meaning not yet in its final form, as part of its defense.
“Even if you have a product that’s in beta, you’re still subject to liability laws,” said Jenn Wall, corporate counsel at X (formerly GoogleX), without mentioning any company names. Wang later reminded the audience that company executives and board members “are responsible for knowing what’s going on in your company.”
It will surely be interesting to see what legal blunders Banks and his fellow guest speakers will discuss next year after another season of the show airs—and which neighboring tech companies could use their advice.
