🤿 Sunday Deep Dive: Startup Culture - The Good, The Bad, & The Legal

‘Start-up insanity’ is becoming its own television genre. Apple TV+ served up Jared Leto as WeWork founder Adam Neumann, a serial entrepreneur with a God complex whose empire turned out to be as substantial as the emperor’s new clothes. There’s both an HBO documentary and a Hulu series about Elizabeth Holmes, another real-life, cult-leader-esque founder, who offered employees the chance to be part of something special in exchange for 120-hour workweeks. And Showtime’s Super Pumped: The Battle for Uber highlights the greed, misogyny, and toxicity of Silicon Valley through the rise and fall story of CEO Travis Kalanick.

These shows make for juicy watching. After all, who doesn’t enjoy seeing arrogant twenty-something billionaires get their comeupance? For many in the tech start-up world, however, they’re a little too close to home. Being a part of a fast-growing company with a bold vision and a heap of incoming VCs can be thrilling and rewarding. But the reality can be long hours, limited resources, disorganized leadership, or even insolvency.

Legal workers are definitely no stranger to harmful work environments. According to research, half of legal workers say their productivity has been impacted by ‘toxic workplace culture’ and the legal sector came first by 10 percentage points in a study of employees who had previously left a job due to bad workplace culture. We’ve put together a list of red flags to help legal talent steer clear of toxic start-ups as well as a few tips for detoxing your company culture.

The Perfect Work-Work Balance

The job description: Flexible hours, unlimited leave, free meals, nap pods.

What it really means: Cancel your lease. You’re never leaving the office.

Source: Instagram

When businesses are just starting out, they don’t have the money to fund a big team. Even if they do have the money, there’s a trend for start-ups to follow a ‘lean’ strategy, meaning that growth is prioritized and hiring is kept to a minimum. That might mean that GCs find themselves flying solo with a limited budget for outside counsel. Tech companies also tend to grow faster than they can hire, leaving the existing team with an ever-expanding workload.

As the company grows, start-up employees often find themselves involved in recruiting and training new staff members, which takes up even more time. There’s a sentiment that anyone who feels overworked is not really overburdened, they’re just not ‘working smart’. As if that’s not enough, many start-ups have a ‘work hard, play hard’ attitude which involves an expectation that, after a long workday, staff stay on and socialize with the team.

Of course, not all start-ups are the same and many do offer great work-life balance. There’s a major shortage of tech workers and companies are working hard to create an environment that attracts and retains talent. But it’s worth investigating this aspect of company culture before you take a job.

Don’t be charmed by perks like unlimited leave which mean nothing if paired with a culture of workaholism. In fact, critics argue that unlimited leave policies can lead to staff taking fewer vacations. In job interviews, ask employers what kind of hours their staff actually work. Follow that up by reaching out to current employees to ask about their work-life balance. Finally, check out Glassdoor to get an honest review of your potential employer.

Assembling A Plane When You’re In Mid-Air

The job description: Exciting, fast-paced, varied.

What it really means: We have no idea what we’re doing and neither will you.

Source: Medium

Reid Hoffman, the co-founder of LinkedIn, once said that “An entrepreneur is someone who will jump off a cliff and assemble an airplane on the way down.” Founders know that most startups fail. They’ve only got so much time to become profitable before their own money or the investment they’ve raised runs out and they crash into the jagged rocks at the bottom of the cliff. And then they’ve got to keep making that profit, grow the company and keep the investors happy, all within a fast-changing market and with competitors breathing down their necks. It should come as no surprise that startup founders are twice as likely as other people to suffer from depression.

Some founders are often one of the cons of working for a start-up. Visionaries are not always good at managing people. In fact, as the aforementioned television shows indicate, they’re often downright odd (which is probably why they’re able to reimagine the world). Being under enormous pressure doesn’t help. And a 100% commitment to achieving the company’s mission doesn’t always line up with giving employees the things they need to thrive.

When you join a tech startup, you’re stepping onto that still-to-be-assembled plane. Some people will thrive under that kind of pressure and it can forge bonds. Early-stage start-up employees talk about an ‘all-in-it-together’ sentiment and a feeling that they’re building something great. For others, the instability and pressure of the start-up environment can be too much. It’s no secret that Silicon Valley has an Adderall habit, sustained by a constant need to build better, stronger, faster, and change the world. Pressure can also lead to mistrust and tension among the staff.

The ‘unassembled’ nature of start-ups can also mean that there is no clear chain of command, limited delineation of responsibility, and a whole lot of winging it. Employees may find themselves roped into all sorts of things that aren’t technically part of their job role — which could be fun or frustrating.

If you’re thinking about working for a tech start-up, take some time to do some soul searching and figure out if you’re a good fit for that kind of environment. Consider taking on a freelance role to gain some experience in start-up culture before making a career leap.

Inclusion And Diversity “Initiatives”

The rejection email: Unfortunately, we feel that you aren’t the right culture fit for the role.

What it really means: We’re looking for clones.

Source: The Startup (Medium)

Journalist Emily Chang writes in her book Brotopia: Breaking Up the Boys’ Club of Silicon Valley, “By lionizing the idea of meritocracy, Silicon Valley can deny that the lack of diversity is a problem.” Meritocracy was one of the principles hailed in a controversial 10-page memo written by former Google employee James Damore. In the memo, he argued that women are biologically less well-suited to work as software engineers and that it was, therefore, reasonable that (at the time) 82% of Google’s tech workers were male. The ensuing debacle is too complicated to explain here but it illustrates Chang’s point: tech has a diversity problem and an attitude problem to go with it.

Men in tech earn more than women in the same job 59% of the time and as many as 88% of women in tech say they have experienced clients directing questions to male peers when they should have been addressed to them. Silicon Valley also saw its own #MeToo movement with two dozen women speaking out about sexual harassment.

The lack of diversity in tech is not just about women. Only 2.8% of Google’s technical roles and 4.8% of their whole workforce is made up of Black employees. Facebook and Twitter have similar demographics. For the minority of Black workers in tech companies, the workplace can be a lonely minefield of microaggressions and blatant disrespect.

This one is difficult to weed out as a prospective employee, but if you’re getting ‘bro-vibes’ upfront, that could be a red flag.

Detox 101

Maintaining a happy, healthy workplace is a worthy goal in and of itself, but it’s also smart from a legal standpoint. Unhappy employees can lead to bad press, leaked IP, and even lawsuits — none of which are good for your bottom line. Here are a few things that start-ups (and in-house legal specifically) can do to flush out toxic vibes.

Source: Instagram

Fair and transparent hiring processes

  • Make sure that new hires know what they’re getting into. If you expect them to work long hours and be a jack-of-all-trades, then be honest. If they still take the job, then you’ve established trust. If they don’t, you’ve saved yourself having to hire someone new when they quit in 6 months.
  • In-house legal can facilitate this process by preparing employment contracts that provide clarity about what’s expected of employees. They can also help to design a recruitment process that takes into account anti-discrimination hiring regulations and act as adjudicators on whether prejudice is creeping into the hiring process.

Ask your employees what benefits they actually want

  • We’re not here to cast shade on anyone who chooses a job because of free ice cream, a ping pong table, or daily rooftop yoga. But if you’re paying your employees 30% below market rate, crushing their spirits, and skimping on medical insurance, it shouldn’t come as a surprise that they’re stress bingeing the Ben and Jerry’s and weeping through downward dog.
  • The benefits you offer can also have an impact on the diversity of your workforce. If you want to attract software engineer soccer moms and boomers with thirty years of legal experience, a ping pong table might not have as much impact as good parental leave and a strong pension plan.
  • Legal can help with this too. Young start-ups will need guidance on statutory requirements around things like employee insurance and companies with workers outside the US will need to take into account regulations around parental and sick leave.
  • Also, if you’re thinking of making the jump from a law firm to a tech start-up, you’ll be pleased to hear that in-house legal teams enjoy the best benefits packages in the legal sector.

Implement some structure

  • As engineers and the parents of toddlers will tell you, the structure is what keeps things from going sidewards. Horizontal workplace hierarchies and rebelling against old-school notions like HR departments may be trendy but it can be important for staff to know who is in charge of what and where to go with certain issues. The fact that traditional work structures have been around forever doesn’t necessarily mean they’re good but it doesn’t necessarily mean they’re bad either.
  • If you’re at a start-up that has no HR department, you can play a role in ensuring the company doesn’t wind up in court. Hiring, firing, maternity, harassment claims, and privacy are all matters that are usually in HR’s wheelhouse and are fraught with potential legal landmines. Legal can also help to minimize structural ambiguity by weighing in on the details in job descriptions and employment contracts.

Care about longevity

  • Many start-ups want to grow as fast as possible and achieve their unicorn horn. If you focus on the short-term, don’t expect your team to be there in the long run. Building relationships and investing in people is key to a healthy workplace. Legal teams stand at a small distance from the primary mission of the company which means they can offer perspective when founders make decisions that send the wrong message to their staff.

Build work-life balance into your processes

  • If you don’t want staff to get burnout and complain of long hours, don’t just say it. Rules like ‘no emails after 6 pm’ and buddy systems that mean employees are covered when they go on vacation are practical things you can do that allow staff to step back when they need to.
  • Law has long been known as a burnout career but soaring demand for legal services during the pandemic has led to a shortage of legal talent and increased pressure on both law firms and in-house teams. In this challenging hiring climate, start-ups would be wise to position themselves as an alternative to the burnout culture of law firms by offering more flexibility and better work-life balance.

If you can afford to pay fair wages, do it!

  • Not every start-up can afford good wages but if your attitude is that your staff should be willing to earn less because it’s a great privilege to work for your company, that’s toxic. Fair wages can also boost workplace diversity because they attract people with different financial backgrounds and family obligations.

Most Start-Ups are likely just overwhelmed by the many challenges involved in starting a new company. With a little more focus on the human aspect of business, and perhaps a nudge in the right direction from legal, there is hope that even the most toxic of start-ups can turn things around.

Want to work for a cool startup without all the stress? Test the waters by going freelance with companies like Airbnb, Coinbase, DoorDash, and more on Lawtrades.