Post-IPO: legal’s changing responsibilities

Ioana Vieru is the Global Corporate VP at UiPath. UiPath listed on the New York Stock Exchange in April 2021, with a valuation of $31bn. This is a chapter from The Bundle: issue #2 - the IPO special. Download now.

UiPath listed in April 2021, after several months of extremely hard work. In that moment, ringing the bell, we all felt an overwhelming sense of accomplishment that you don’t encounter many times in your professional life. It was an incredible day, but the work was only just beginning - especially for legal, working behind the scenes.

So what’s next for legal? What can legal leaders expect at a public company? How do the roles and responsibilities change? Here are my five takeaways.

1. It’ll feel like you’re starting from scratch 👶

The first year at a public company felt like life as a newborn - in the same way a baby needs to learn to walk and talk, we needed to relearn our ways of working. The project didn’t end at the date of listing - instead, legal responsibilities underwent a significant change, and legal implemented all the policies and procedures required of a listed company.

In connection with operating after the IPO, there were several priorities that legal needed to address, such as:

• Establishing the disclosure committee (a management committee)
• Establishing the Audit committee (a Board level committee)
• Compliance with the US Securities & Exchange Commission rules and regulations (pre-IPO, at IPO and post- IPO). We also needed compliance with NYSE listing guidelines after going public. These are ongoing tasks but they develop and change as the company hits various post-IPO milestones
• Preparing procedures and reports for the business
• Implementing processes to control information, internal controls and enterprise level risk management systems.

… And so on. It’s a different life, for legal but also for the wider business.

Sales teams, for example, needed to relearn the messaging they used in sales calls. They could no longer use many of the figures they once used in sales contracts, or the sales speeches they’ve grown so accustomed to - because the status of the company had changed and the business needed stronger controls on the information they disseminated.

Legal had to enforce this, and empower sales with the right information - on top of their many other responsibilities. 

A year from now, going through these processes will feel more habitual and straightforward. But in the initial transition, there can be growing pains

2. You’ll have to handle growing pains 🌱

I imagine that the workload will decrease over time, but within the first year as a public company, legal will end up with an additional mountain of work to do. And this is something legal leaders should expect - especially on the regulatory and compliance side, where legal has to implement reports that weren’t necessary before the IPO.

There’s also a stricter level of control on contracts, and plenty of analysis that takes place in collaboration with the disclosure and audit committees. This is also due to requirements for accounting, internal controls and disclosure controls, which are all connected to the production of the company’s financial statements.

A year from now, these systems will become commonplace in the business, and going through these processes will feel more habitual and straightforward. But in the initial transition, there can be growing pains as everyone gets used to the new layout, and this is something legal leaders need to be aware of going forward.

3. The workload will increase 📈

On top of this, the team also continues to handle the BAU work. I was coordinating an M&A and the transitional aspect of the team during the entire IPO. Before, during, and after the IPO, we continued to complete acquisitions.

BAU work is something lawyers are used to, but the IPO may bring a new list of unfamiliar tasks that legal needs to manage and complete. One aspect which was particularly new to me was the interaction with the US Securities & Exchange Commission (SEC).

For compliance purposes, we need to submit various reports to the SEC and handle SEC-related topics, so as part of our corporate legal team, we now have a lawyer who specializes in the US Securities & Exchange Commission requirements, based in the US. This way, we can dedicate our time towards both BAU and other post-IPO tasks.

4. Expect complexity 😵

My role involves coordinating the corporate legal function, which includes corporate, M&A, employment, regulatory, insurance, litigation, and much more. And following the date of listing, I realised that due to my involvement in these areas, my role increased in complexity.

The fact that we became a public company came with a new corporate package of knowledge, as well as changes we needed to make to our current procedures. For example, the M&A workflow that we had in place needed to account for the fact that UiPath was now a public company and the restrictions that came from the handling of material, nonpublic information.

When we are doing an acquisition, we have additional steps to take in order to address this huge milestone. We also need to follow a different process if a transaction exceeds a certain threshold. Even on the employment side, things change - the equity aspect, for example, is updated to reflect the company status.

The IPO will impact almost all aspects of legal, and increase complexity on all levels.

During the IPO, there’s almost a spotlight focus on legal. Legal becomes more than just a support function, but instead a key stakeholder and important decision maker

5. There’s a rewarding change in mindset 🎉

One of the biggest - and perhaps the most rewarding - changes during this entire process is the role of legal within the business. In the earlier stages of a high-growth tech company, you’re used to hearing these perceptions about legal.

And ultimately, legal isn’t necessarily ignored, but it can be challenging for lawyers to make a point and be heard. During the preparation process for the IPO, the mindset shifts and there’s almost a spotlight focus on the legal team. Legal becomes more than just a support function, but instead a key stakeholder and important decision maker throughout the process. 

Following the IPO, legal’s role changes in two main ways:

• We have a much more direct relationship with the stakeholders and board of directors
• We’re perceived as the main representatives when it comes to anything related to being a public company. The business relies on us for advice when it comes to doing an acquisition, doing business in a certain region, and so on

The communication has improved significantly and the relationship with the stakeholders continues to grow in importance, and I think that change is a serious win for the legal team - and the business overall.

Get ahead of the problem 🏃

Preparing for an IPO is exciting, the actual date of listing is overwhelming - but post-IPO is a whole other world. For legal leaders dealing with life at a public company, make sure you align the whole business on how things have changed - and how these changes are positive to the business.

Keeping people aligned doesn’t have to be a monumental project; in fact, it’s as simple as making yourself available for questions, answering with clarity, or creating an FAQ page. Aligning the legal team is often the easiest part - for us, most of the lawyers had moved to UiPath from a law firm environment. Most had experience assisting companies in their listings, or came from a world both familiar and open to the regulatory and compliance constraints.

Trying to align the wider business can be a challenge. There’s often a tendency to perceive the IPO, and all the changes it brings, as a blocker to the business’ ways of working. It’s rare to be met with that negativity, but there’s ways to get ahead of the problem by having discussions with the business and offering support on these changes.

Taking a company public is an exciting experience that comes with big changes - and the post-IPO world opens up new opportunities for legal teams. It’s easy to see how this project can push legal to exceed expectations, but also end up being the best that can happen for both employees and the company.

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