San Francisco's Yelp Inc. has so far been a typical Silicon Valley success story. Founded in 2004 by members of the so-called PayPal Mafia, the company has made its investors and employees a lot of money.
Co-founders Jeremy Stoppelman and Russel Simmons and board member Max Levchin were all senior engineers at PayPal Inc. in the early 2000s, and along with other early employees and investors in the payments company have been big players in the Bay Area's startup scene.
Venture capital firms including Valley stalwarts Bessemer Venture Partners and Benchmark Capital Partners and relative newcomer Elevation Partners, which counts U2's Bono on its investment team, put money into Yelp at an average price of $1.12.
Just over a year ago, the company went public at $15 per share, netting about $96 million, and the shares haven't dipped below that point since and were recently near $27.
Venture capital investors would almost certainly rate the company five stars out of five. For businesses and users of the website, the opinions can be less than stellar. The company does not edit reviews and does not take responsibility for any of the user-generated content on the site, prompting some businesses to howl over reviews they think are unfair or misleading.
THE QUICK BIO
Berkeley, Calif.-raised Laurence Wilson, Yelp's general counsel and first in-house attorney, does not have the profile of a typical corporate lawyer. For starters, Wilson has never practiced law at a firm.
After earning a bachelor's degree in history from UC-San Diego, he graduated from Stanford Law School in 2001. In between his undergrad and law school years, he spent two years as a paralegal at Morrison & Foerster's San Francisco office and knew pretty quickly that he wanted to forgo the Big Law route in favor of something with a more entrepreneurial bent.
So after finishing up at Stanford, Wilson went to work for an angel investor focused on the health care field, doing generalist duties for a couple of projects, primarily Claremont Partners, a San Francisco-based company that manages health care plans.
Wilson said there are both advantages and drawbacks to going in-house right away. "You gain experience at twice the rate as a first-year associate at a big firm, but in a much less formal environment."
At the end of 2003, at a Stanford basketball game, Wilson had a chance encounter with Keith Rabois, another member of the PayPal Mafia. At the time, Rabois was chief operating officer at investment research company Epoch Innovations Inc., but he also served on the boards of a number of Valley tech companies, including Xoom Corp., an online money transfer company.
Within the next few weeks, Wilson was the first in-house attorney at Xoom, where he stayed until late 2007, when he moved to Yelp, also at the behest of Rabois.
Though Wilson occupied a primarily generalist role at Xoom, he noted that as a financial services company it operates in a highly regulated environment. During his tenure, the company solidified its anti-money laundering infrastructure. Having no prior experience in that area, Wilson relied heavily on outside counsel.
INSIDE AND OUTSIDE COUNSEL
At Yelp, Wilson leads a team of four other lawyers. While everyone has a focus, including international expansion, general transaction work and litigation, he says the department is too small to be compartmentalized.
Wilson is also not the only lawyer at Yelp to have very little background at a law firm. Associate GC William Reilly oversees transactional and international issues and spent less than a year as a summer associate at Duane Morris prior to his 2001 bar admission, according to Reilly's LinkedIn page. In 2002 Reilly went in-house at telephone services company TellMe Networks Inc. and stayed for about two years after it was acquired by Microsoft Corp. in 2007. He joined Yelp in 2009.
The company is hiring a sixth lawyer who will focus on sales, including online advertising agreements, business marketing, training and oversight, and commission agreements. According to the ad posted on the company's website, in true Yelp fashion, the person will also deal with the "ridiculously broad range of 'jump ball' issues that come up on a daily basis."
When Wilson uses outside counsel, Jodie Bourdet and David Peinsipp at Cooley are go-to corporate lawyers, having worked on all but the first two of Yelp's venture financings, the IPO and the $50 million acquisition last December of German competitor Qype.
Baker & McKenzie handles the company's international expansion work. Baker partner Lothar Determann takes care of any data privacy issues. Daralyn Durie, of San Francisco IP litigation boutique Durie Tangri, defends the company in lawsuits from nonpracticing entities and other litigation.
Wilson said the company has long-standing relationships with all of its outside counsel, which allows it to use a range of billing structures, from discounted hourly rates to fixed fees.
The biggest challenge, he said, is "scaling the legal department with the business and making sure we're not in the way, but also not missing anything either."
As a hot tech company that recently raked in a good deal of IPO cash, Yelp has dealt with its share of patent infringement suits. It is currently fighting online marketing company Blue Calypso Inc. in the Eastern District of Texas over peer-to-peer advertising technology. Blue Calypso has also sued companies including Groupon Inc. and Foursquare.
A bigger legal threat may arguably stem from user-generated content. Yelp itself is protected by §230 of the Communications Decency Act, part of the 1996 Telecommunications Act, and can't be held liable for things people write on the site.
It is however very active in defending its users, Wilson said. Last December a Virginia woman was sued by a local construction company over her negative review claiming that the company stole her jewelry. She was initially ordered to remove parts of her review, though that ruling was overturned by the Virginia Supreme Court at the end of last year.
When situations such as these arise, Wilson said he refers users to organizations doing pro bono legal work, including the Electronic Frontier Foundation and the California Anti-SLAPP Project in Berkeley.
Outside of the office he tries to spend as much quality time as possible with his "two cute nephews." He also plays soccer, "dutifully practices the guitar and piano" and "zealously reads The New Yorker," all while trying to squeeze in more vacation time.