Lenore Horton, partner with FisherBroyles, discusses her tailored approach to providing outside legal counsel, how her small and midsize clients are dealing with the pandemic and her work with the Pipeline Angels investor program for women.
Tell us about your background and what brought you to FisherBroyles.
I attended Howard University School of Law, and after that I joined one of the larger international firms, White & Case, in the New York office of their White Collar and Special Defense Litigation group. I was primarily a securities litigator. At the time, the Enron collapse and bankruptcy spawned a huge number of rapidly developing cases associated with that, and it was a defining period for many lawyers who started out around that time – especially if you were a securities lawyer
From there, I moved to Schulte Roth & Zabel, a prominent New York firm that mainly represents hedge funds and private clients. That offered me an opportunity to expand beyond litigation and work significantly on internal investigations and private client work – for me, special projects on behalf of the families and owners of the hedge funds. It gave me a different sense of what the personal service side of representing clients was like. As a junior litigator at a large international firm, you rarely even have an opportunity to meet clients, much less see your work tie into the larger scheme of things. So it was exciting and informative to get that opportunity at SRZ to meet clients and decision makers for nearly every matter I worked on. It really shaped my understanding of what we’re supposed to be doing for clients.
In 2009, as the recession was really unfolding, I left Schulte Roth & Zabel to get a second law degree. At the time, I’d been working quite a lot on civil and human rights cases. I worked on Guantanamo Bay litigation, for instance, at the appellate and Supreme Court level regarding Chinese Muslims facing indefinite detention despite confirmation that they were not enemy combatants. I also worked on matters involving issues around criminal sentencing reform, and I really wanted the chance to learn more about human rights, and to understand the connection between business and human rights.
After obtaining an LL.M. (master of laws) from Fordham University School of Law, I lectured and taught in the U.S. and overseas on the intersection between business and human rights. In 2012, I came back to the U.S. and focused on my role as the co-owner and co-founder of a startup, where I also served as the interim CEO before transitioning out of an active role with that company.
In 2013, after seeing the difficulty in getting effective legal help as a funded startup, I knew I wanted to move back into practicing law and focus on helping small- and medium-sized entities in particular. Even when funded or profitable, many new companies don’t usually have or need an in-house legal department. If you’re at an outside firm servicing them, instead of working with in-house counsel per usual, you’re working with laypeople who obviously don’t have the same understanding and the same skill set that a lawyer would have in evaluating the legal needs of the company. When I was working as interim CEO at the startup, I was amazed and disappointed at how difficult it was to find broad-based legal help on a variety of topics, someone who could liaise effectively with my co-founder—an experienced businessman, but also someone who was not a lawyer.
I started my firm in 2013, and I initially came to FisherBroyles because I needed to hire them as local counsel on one of my cases. I had a client who was sued for over $100 million. It was a serious lawsuit, not someone wanting compensation for a lost pair of pants at the dry cleaners or something like that. All of the other parties either had billions in revenues or were literally listed as a billionaire on an official list somewhere. They had firms that were charging $1,200 an hour easily, just for one partner. My client could afford a good defense of the lawsuit, but it would have been imprudent to spend millions of dollars defending it. So, I thought, “I really need a firm that has the competence and same background as these large firms and lawyers who are charging $1,200 an hour – but is also competitive on pricing.” That’s how I found FisherBroyles.
After working with them for about 18 months on this case, they said, “When this winds down, we’d really like to talk to you about joining the firm.” I was surprised, because I’d never imagined going back to a large firm, and also I wasn’t treating the case as an interview or an audition, if you will. In essence, I was the client, or rather, speaking for the client. As outside general counsel, I was the one who hired and managed the work by FisherBroyles on the case. But the fact that I could fully be myself and still have them be passionate about me joining the firm, well, it made me feel like it might actually work, because they already knew who I was – and that ability to be authentically myself with them was appealing to me.
In March and April, it was all hands on deck, seven days a week, to meet the needs of our clients.
You’re currently acting as general counsel to several organizations. Can you share some of your experience with that type of work?
One thing that’s important is to get clear with the clients about whether they want me to be an outside general counsel or whether they’re actually looking for something a bit more. It’s usually a question that the clients haven’t even considered – what do they really mean when they say, “We need an outside general counsel.” The way I look at it is that typically a general counsel is the one who manages the day-to-day legal work and legal needs of the business. They’re the one implementing the budget for the legal work, looking at what those short-term goals are for the company, and making sure that they’re meeting those goals. They’re very responsive. If you’re in-house, you really serve as a captive law firm for the company. And that’s someone who’s closely tied to saying, “OK, we’ve got a contract to review, we’ve got employment agreements to revise,” and they manage that workflow.
But oftentimes, what my clients are really looking for is a strategist. They’re looking for someone who’s actually taking the role of a chief legal counsel or a chief legal officer. And that’s someone who’s going to focus on what your legal strategy is, what your medium- to long-term goals for the business are, and how we can plan proactive legal work that will set the company up to achieve those goals. This is a person who typically serves as the primary liaison between the board and the executives and will also handle corporate governance issues. It’s a different level than general counsel. So my first goal is to help the client understand what these different roles are.
Then the next thing is to assess and get to know the client. Whether I’m an outside general counsel or an outside chief legal counsel, I feel like it’s my duty to get to know the client and understand them. What is their concept of fast, for instance? What is their risk tolerance in different areas? Something like that can make a huge difference in how you plan, budget and manage the work. It’s important to understand them and see them for who they are, and accept them for who they are, so that you can really tailor the way you work with them and serve them – to match their personality and the personality of the company.
The exciting thing is understanding where your client plans to go, and then showing them how the right legal services can set them up to achieve that over the course of time, and create a longer-term plan for that. It’s been an eye-opener for almost every client I’ve worked with, to have someone work with them in this way, where we say, “Let’s plan it out over the next four to six quarters, so that we can meet those objectives that you have down the road.” Then you want to look at the areas that they’re worried about. That’s my third immediate concern – to say to them, “Well, what keeps you awake at night?” Because if you can help them solve that, even if it’s not a legal problem, you create more bandwidth and an ability for them to pay attention to the things that you think are important and that are in a higher risk category.
You work with many startups or small and midsize businesses. How are your clients and investors responding to the pandemic?
There’s an art to it, because at times people still act as if this has just happened, but the reality is that we’re now a good five months into it. Some clients got it right away. For others, it felt like I had to really sound the alarm and say, “This is going to be huge. We have got to start planning now. These are the immediate ways that I think this will impact you.” And again, that’s part of knowing your client – knowing when you’re going to have to keep circling back and impressing upon them that this is something we should be preparing for, that I’m available, and that these are the issues that I think will come up.
As time has gone on, we’ve seen a lot of concerns over which opportunities to take advantage of when it comes to the various government stimulus packages. I’ve done a lot of work on the Paycheck Protection Program loans, a lot of guidance on the expanded leave requirements under the Families First Coronavirus Response Act. Something for people to consider, which they might not know, for instance, is that under Small Business Administration standards, “small businesses” can actually be quite large. Many of these businesses have significant employment law needs, because of the number of employees they have, and that is being impacted not just by how COVID might effect their workforce but also by the government packages. Helping them understand the rapidly moving environment when it comes to the stimulus packages was really at the top of my mind. March and April actually just felt like a blur. It was all hands on deck, seven days a week, to meet the needs of our clients.
Initially, the question was, “How do we stay open safely?” –- if it was a business that had a storefront or a retail location. For businesses where people were working out of an office, it was about figuring out how to transition workers to working from home. For those that were in a production line, a big part of it was about dealing with supply chains and whether they could actually get the goods they needed to get in order to continue doing the work of the business. Now we’re in the fifth month, and we’re kind of tapped out on many of the stimulus packages available for businesses, but there are obviously enduring effects. A lot of the businesses are wondering what long-term viability looks like, since it’s obvious that we’re not going to be returning to normal anytime soon. From a financial standpoint, we’re looking at different schemes for many businesses. It’s a question of having to reshape the business’s revenue streams in huge ways, which will have an impact on how they employ people, how they interface with the public, what sort of suppliers they might need, and so forth.
And then there have been some businesses where this has been a huge opportunity for them to expand. In many ways, they see it as a call to action to be of service to the public. So that’s exciting, but it also means that they’re working in a new area where they may need a lot of guidance and education, especially from a legal and regulatory standpoint. I cannot think of a single client who has not seen an impact on their legal needs because of COVID.
I cannot think of a single client who has not seen an impact on their legal needs because of COVID.
Regarding Pipeline Angels – which is a program for women who want to be angel investors – let’s talk about some of your key takeaways. What is the program like, and why might people be interested in it?
Well, interestingly enough, I actually had an opportunity to do the program when it first started, but I didn’t do it. I think there are three reasons for that. One, I was a bit chicken, and two, I didn’t get it. I didn’t get the concept. And third, I thought, well, why do I need this? I was thinking, I’m a lawyer who actually counsels people on their securities law obligations when it comes to private investments. Why do I need to go to a boot camp to learn how to be an angel investor? And I had to keep coming back to that question, because year after year, I would see classes that included lawyers, investment bankers, people who presumably had that same knowledge that I thought I already had when it comes to investing in privately held companies as a form of building personal wealth. They obviously thought that there was some value in the program, so I wondered what I was missing. And the reality is, it’s one thing to be a lawyer, it’s a different thing to be an angel investor in a company. Those are different hats. You really don’t have an understanding of the approach until you’re actually in the role of being an angel investor. And you don’t want to be the general counsel or the lawyer when you’re being an angel investor. You want to be an angel investor. That’s the approach you need to have if you’re going to be successful as an investor.
One of the biggest benefits of the program is the connections that are made. It’s a really powerful weekend, where you create strong bonds with women from amazingly diverse backgrounds. I was part of the 2019 New York spring cohort, which was a pretty large group. I’m still in touch with many of the women, some on a weekly basis, others on a monthly basis. They’ve become a part of my life in meaningful ways, some on a personal level, some on a professional level, and others primarily around deal flow.
As an angel investor, one of the biggest issues that you have is deal flow and finding quality opportunities without constantly responding to cold pitches. The number of cold pitches I get is pretty high. A tough part of it is finding quality deal flow and getting help with vetting and doing the due diligence on the various opportunities. I think that’s the second most valuable thing that Pipeline Angels offers. So, first, there’s the community and the connections, and second is quality deal flow from people who understand what it’s like to do due diligence from the same perspective and background that you have.
I like that Pipeline Angels is focused on diversity in a way that goes beyond these first and second waves of investing in a more diverse way. They’re really serious about it, and they make you look at some of the superficial efforts at inclusivity and ask yourself what it truly means to be diverse and create opportunities and invest in that untapped market. We know that marginalized candidates have a higher business success rate than those who actually get the vast majority of funding. Not tapping into that is just missing out on an opportunity to build wealth and to invest in those companies – and to help those companies become a more viable reality.
Published September 1, 2020.
