Kristin Sverchek, general counsel of San Francisco-based Lyft Inc., joined the company in 2012 as its only in-house lawyer. The following year she hired one more attorney. But it wasn’t until her third year that she began to really build out the team.
It has been a successful expansion—three years later, the legal department has yet to lose a lawyer.
“I hate to tell people that because I feel like I’m going to jinx myself,” said Sverchek of her department, now composed of 23 in-house attorneys. “I work really hard to retain the people that I have.”
At a startup, having any lawyers with a tenure of three years is relatively rare, but beneficial because of the institutional knowledge they hold. “They know the business as well as, or in some cases, better, than many of the stakeholders across the company,” Sverchek said.
It’s a plus for Lyft that no one has left yet, because the in-house attorneys have their hands full supporting the ride-hailing company, which was valued most recently at $11 billion. In the past year alone, the lawyers settled a $27 million class action suit brought by California drivers, helped Lyft enter the last of 50 states (South Dakota) where it is now operational and have overseen a $1 billion financing round from the investing arm of Alphabet Inc.
“We’re a really, really lean team,” Sverchek said. “To be successful in my department, you have to have an extremely high work ethic, be willing to tackle all sorts of stuff and work lots of hours.”
Currently, Lyft’s legal department is composed of five verticals—corporate, product and commercial, IP, litigation and employment. Sverchek noted that the majority of lawyers at Lyft are the types of people who “thrive in chaotic situations.”
With Lyft’s growth will eventually lead to expansion in the legal department as well—both within the existing verticals and new ones, according to the GC.
For instance, though Lyft already has three to four lawyers who spend some of their time on privacy, the company is looking to hire its first lawyer dedicated solely to privacy issues. And Sverchek says adding lawyers to work on international affairs as the company enters markets outside the United States is “top of mind” for her.
Lyft is also reportedly mulling an IPO in 2018. Sverchek didn’t comment on specifics of what an IPO for Lyft would look like, but it would no doubt affect her legal department. “We’ve been through a number of private rounds of financing since I joined the company, so all in all, I think we’re ready to flip the switch on that when and if we think it makes sense,” she said. “We are very used to being diligence- and audit-ready at a moment’s notice.”
If Lyft does go public, Sverchek anticipates adding more securities experts, post-public offering.
Lyft’s lawyers recently inked commercial partnerships with self-driving car startups nuTonomy and Waymo. As Lyft continues to move further into the autonomous vehicle space, Sverchek said that she will have to look for lawyers with backgrounds in areas such as hardware and products liability.
Sverchek said that hiring in the autonomous vehicle field is “really interesting” because “there’s a mad dash to specialize in it but no one’s really got that background because it’s a brand new discipline.”
Many of the legal and regulatory issues Lyft faces are similar to some of those facing rival Uber. Uber, valued at nearly $70 billion, eclipses Lyft in size and has roughly 10 times as many lawyers, but both companies have dealt with certain challenges, including entering new markets across the country where ride-hailing apps were not previously allowed and fighting legal battles brought by its drivers seeking legal designation as employees.
Lyft considers its $27 million settlement in March 2017 with California drivers in Cotter v. Lyft—which preserved drivers’ status as independent contractors—to be one of the legal department’s biggest wins of the last year.
“That was a really massive cross-functional effort within the legal team,” said Sverchek, who was personally involved, along with lawyers from within the litigation and employment verticals. “That was something when we were first hit with that suit we didn’t know how it could possibly be solved and we were able to resolve it in a way that felt good for us and felt good for our drivers as well.”
Another milestone came in December 2016 when Lyft decided to hire its first legal operations executive, Frances Pomposo. “It’s whipped us into shape,” Sverchek said.
In the last year, the department implemented a new contract management system and will soon implement a new litigation matter management system, as well as patent and trademark managing systems. “We’ve been able to really squeeze efficiency in areas that we just never had time to tackle before,” she said.
Sverchek doesn’t anticipate leading the legal department at Lyft could become dull any time soon. “I think it’s possible, but it’s a long ways out,” she said, with a laugh. “There are plenty of different companies that somebody could work at that would be a little tamer, a little less chaotic, but just wouldn’t have the same sense of personal satisfaction and accomplishment.”
The lawyers have drawn admiration from beyond the legal department as well.
“One of the things that makes me happy is that my boss, one of our co-founders, John [Zimmer], has remarked on several occasions that the legal team is one of the most beloved teams across the company and is shocked by that because lawyers are usually hated,” Sverchek said. “We wear that as a badge of honor that we are able to be really effective at our jobs but also partner collaboratively with team members across the company.”