In this series of interviews with legal's key internal clients, we learn all about what they want from their legal colleagues, and what effective collaboration looks like. Read the whole collection here: Enabling The Business.
Ben Drury is the CEO and co-founder of Yoto. Yoto is the audio platform for kids. Ben is also a non-executive director at Pimoroni and an angel investor in companies like Permutive and Causaly.
Before you worked with lawyers, what was your perception of them?
I started working with lawyers quite early on - my first job was in digital music, which is one of the most complex licensing areas. I was dealing with split rights, different territories, and so on, so I had quite an early exposure to lawyers.
My general experience has been positive. You need lawyers to demystify complex licensing issues. I also had a good sense of specialism - there are generalist lawyers and there are super specialist lawyers who can help with really specific issues.
And how has your perception changed?
Lawyers do have that reputation of being party poopers, being risk averse, and so on - but that’s down to the individual and how commercial and pragmatic they are.
We brought Amy Wallace in as CLO straight after the Series A round - which is really early, but we needed to because of the specific requirements we had. As I knew her, I knew she would add tonnes of value.
We were dealing with content licensing, content commissioning, and creation where we own the IP.
We also managed patents and trademarks, as we’re also a hardware business. I needed someone to sit above all our complex legal requirements.
Due diligence gets more complicated with each funding round. Add into the mix multiple territories and legal’s input is super valuable
What was the turning point that led to Yoto hiring its first lawyer?
Before the Series A, we outsourced our legal work. Whilst it was invaluable to have that legal support from the beginning, our needs increased, so there was enough work to bring someone in-house full-time.
I wanted someone senior quite early - Amy brought in Cheryl Gayle from Sony PlayStation too which was fantastic due to the analogous blend of hardware and content knowledge.
What soft skills do you think are important in a legal team?
Good lawyers should be commercially aware. A lot of lawyers aren’t - they just want sales to go and do legal’s job with commercial contracts.
A great legal team should be commercial, and get involved early in contract negotiations - yes you’re negotiating on price, but there’s huge nuance there in terms of payment terms, termination rights, and so on.
Hardware is a complex area with different rules in different geographies, and product safety for a kids’ product is paramount. So great relationships are super important.
How often do you work directly with legal, and on what kind of projects?
There are a few projects we collaborate on:
- The fundraising process: I’m doing the selling and pitching, but I work with legal on due diligence, which is many times more complicated with each funding round. Add into the mix multiple territories and legal’s input is super valuable
- Managing the documentation process with external counsel: this involves disclosure letters and so on
- People issues: this includes hiring and sometimes firing, employment law and process support
- Risk: we’re moving our fulfilment in the UK to a new partner which is a multimillion pound contract - that gets super complicated, so there are plenty of tasks around risk appetite where the legal team is crucial
We all hope for growth, but we’re heading into the unknown again - you can do all the planning and modelling but nobody knows what’s around the corner
What can legal do to enable you to enable your business to grow?
A good commercial lawyer can help with growth of margins by negotiating hard on deals and securing good commercial terms.
On the sales growth side, they can support rather than block deals, be pragmatic and keep deals moving quickly without having to go through incredibly long commercial contracts each time.
Internationalization is an area where lawyers can be hugely helpful. And saving our bacon if we don’t spot local legislation that could trip us up or lead to a lawsuit - that can be priceless.
How should legal support the business through these challenging times?
I’m looking for flexibility. In this environment you don’t want to increase your fixed cost base too much, so we want to avoid signing super long contracts.
While we all hope for growth, we’re heading into the unknown again, so helping to retain flexibility - you can do all the planning and modelling but nobody knows what’s around the corner.
Enjoyed this interview? Want to hear from other C-suite leaders on how they interact with legal? Read the collection in full: 'What the business wants from legal in 2023'.