It’s said that new digital tech businesses grow faster than start-ups in other sectors, because the people in them are more used to acting in a collaborative and connected way.
If that’s true, then it follows that they need advisers around them that work in a similar style, connecting into the issues and challenges they face – often based on the ‘collective clever’ of advising hundreds of similar businesses on those same identical challenges.
More than 120 advisers in the Thames Valley and Solent team at Shoosmiths work closely with a range of clients in the tech sector, ranging from digital tech start-ups to some of the sector’s largest global giants.
Tech is a growing focus for Shoosmiths in the southern region. The firm is working with the Coalition for a Digital Economy (coadec.com) on key issues faced in the sector – with a Thames Valley event scheduled for later this year – and also sponsors the Southern Tech 100, a celebration of the top companies in the area.
Despite the rapid pace of change, however, the Shoosmiths’ team say the key legal challenges for digital tech businesses can often relate to very familiar realities of money, people and risk.
“Finding the right type of finance for your digital tech business depends on where your business is, and how far you want to take it,” says Nina Smith, partner, Thames Valley corporate team.
Shoosmiths is in a great position to advise growth businesses on the options, because it has one of the best track records in the southern region for venture, growth and development capital and private-equity deals, as well as specialist Enterprise Investment Scheme and VCT tax advice. The firm recently advised NVM Private Equity on its investment into Mo, an employee reward, recognition and ideas platform. Its proprietary technology helps organisations to achieve success by strengthening relationships at work, building stronger cultures and giving employees greater meaning at work.
People in digital tech businesses are often the biggest asset the business has, so nurturing them is a business ‘must’.
Shoosmiths’ employment law team regularly advises tech businesses on ways to attract, retain and incentivise key staff, as well as acting swiftly to defend knowledge loss in the event of employees being poached in this highly competitive and knowledge intensive sector. One of the firm’s key specialisms is in advising employers on business immigration, which can be crucial to embedding the right talent.
The implementation of the GDPR last year has led to an increased focus on data privacy and security, meaning disaffected employees are even more likely to submit data subject access requests.
Jonathan Naylor, partner in the Thames Valley employment team, says: “We regularly help tech businesses deal with the complexities of responding to requests made by employees and also to develop better practices to ensure that they are less vulnerable to employment claims.”
The south has the largest concentration of data centres in the UK. Although the advantages of housing data in this way are well-known, there can be a sting in the tail according to Jonathan Smart, partner, Solent dispute resolution team.
“What often isn’t realised is that moving from a small number of physical servers to cloud servers can often result in a breach of the existing software licence agreements – something that is considerably cheaper to deal with upfront than after the event.“
Jonathan Smart also warns about Brexit worries and uncertainty leading to projects being put on hold – which can lead to real issues for a tech start-up for whom a single contract can represent their livelihoods.
“If you are a supplying a much larger business, it is essential that you get the best legal advice to advise you on contracting with them, to ensure your business is protected if the worst does happen.”