WordPress Parent’s Legal Boss Has Always Managed Firms from Home

Automattic Inc.’s general counsel Paul Sieminski works with around two dozen outside law firms, all from the comfort of his home in San Francisco’s Hayes Valley neighborhood.

Automattic, the operator of popular website hosting and blogging sites WordPress and Tumblr, has had a fully-remote workforce since its creation in 2006. “Automatticians” work remotely in 76 different countries, and Sieminski believes work from home is here to stay now that the coronavirus pandemic has given many industries a taste.

“We could always do the same things that any other company does in terms of legal work, in terms of buying companies, raising money, defending our litigation,” Sieminski said. “I don’t really find that distributed work was a barrier to any of the work that we did—if anything, we maybe did it a little bit more efficiently because we could do it in a more flexible way.”

Bloomberg Law is conducting a Q&A series highlighting some of the legal industry’s most important relationships: the often fruitful but sometimes complicated connections between general counsel and their outside law firms. We’re talking with general counsel across industries about how they select outside lawyers and handle issues like billing, fees, and tracking performance.

Sieminski joined San Francisco-based Automattic in 2012 as general counsel. Before that, he was an associate with law firms Gunderson Dettmer, Proskauer Rose, and Goodwin Procter.

He spoke with Bloomberg Law about the benefits and challenges of working remotely, how law firms’ compensation systems can create a disconnect between cost and value for clients, and the importance of creativity in everything from legal advice to billing arrangements.

This conversation has been edited for clarity and length.

Bloomberg Law: What was it like to work for a fully-remote company before remote work became widespread during the pandemic?

Paul Sieminski: We’ve never had an office. It’s fully remote and always has been since the company started in 2006. It was definitely unusual at the time because not many companies were set up the way that we are, and there was even some doubt among my friends and family that it was even a real company. Some people called companies like Automattic “virtual companies,” which implies that there’s something not real about the job or the company itself. Like if you don’t have an office, if you don’t have a door, or a phone, or a conference room, you’re somehow not working.

That was definitely something I dealt with in the earlier days when this was not the norm. And it’s something that is more of an issue for more traditional environments, like law firms and banks. When you met with accountants and you told them that you’re working from your home, there was definitely a mental hurdle they had to get over, which you just don’t see as much anymore.

BL: Now that more people are familiar with remote work, have your interactions with outside vendors or outside counsel gotten easier?

PS: I wouldn’t say easier. From my point of view, Automattic has always done distributed work very, very well. And because we’ve been doing it for so long, the company is built to support exactly this style of working.

We could always do the same things that any other company does in terms of legal work, in terms of buying companies, raising money, defending our litigation. We did all of those things perfectly well, we just did them with a different way of working. I don’t really find that distributed work was a barrier to any of the work that we did—if anything, we maybe did it a little bit more efficiently because we could do it in a more flexible way.

Now, I get a lot of phone calls from other GCs, some of our other outside lawyers, and a lot of the other partners that we work with, asking for advice on how to do it best, and how we do it here, and how we’ve made it work.

BL: What kind of advice do you give them?

PS: The Number One piece of advice I have is just to communicate in a way that feels like oversharing. That level of communication is basically what makes the distributed environment work. Without an office to fall back on—or a cafeteria, or randomly bumping into people in the hallway to talk about something that you’re working on—you have to be much more intentional about communication. For lawyers in particular, this can sometimes be very challenging because it goes against a lot of our training and nature to be so transparent.

BL: How many firms do you work with right now?

PS: I would say probably between 20 and 25. Because we’re distributed and have people in 76 countries, and the long tail of firms is because we just have so many issues in so many different places. A lot of that is litigation, for example. We get lawsuits from around the world because we’re a global platform. Some of the law firms that we’re dealing with might just be handling that one case in Turkey, or Israel, or Cyprus, or Argentina. If you put those aside, probably around 10 firms or less take care of our core legal work.

The work itself has gotten more sophisticated, and higher-stakes, and complicated, so that does influence our decision making, but the main thing we look for in outside advisors is an understanding of our business and an appreciation for the things that we think are important, which are maybe different than other corporate clients. Really understanding our values and the things that we like to fight for and care about—that’s been consistent over time.

BL: What are those values?

PS: We are a very mission driven company, and we are very aligned with the WordPress open source project. WordPress itself, which is the software that is the core of our business, is a free, open source piece of software. So right there, we are quite different in terms of business model than a lot of other companies.

We care very, very deeply about our users, our customers, and our community, and about very important values like free expression and the ability of every everyone online to have a voice and to also host all of their content. All of that leads us to think about legal problems in a different way. We put an emphasis on protecting our customers, protecting their IP, leveling the playing field against things like copyright trolls or patent trolls, and trying to find very long term answers to legal and business problems that put those values and those customers front and center.

BL: Does that creativity lead to unique fee arrangements with your outside firms?

PS: That’s one area where the creativity of the legal profession has not really been that great. We still do pretty standard things on fees. To some extent we still do billable hours, we have tried some subscription-type models where we have a flat rate for an unlimited amount of hours over a month or something like that. And that’s worked pretty well.

But from the law firm side, they don’t really ever set the fees too far off of what you would be paying on a per hour basis. In practice, it’s been pretty hard to pin firms down to an estimate or a firm number for a deal. They always try to default to what the fees would be on a per hour basis, and then there’s some discount that they’ll build off of that, but it’s not massively creative or a massively great deal for us.

In an ideal world, cost is very much tied to the value of what they’re doing in the long term for the client. There’s some things where I would have paid double or triple what they charged.

BL: Why is there such a disconnect between value and cost?

PS: It probably goes back to the compensation system of the firms themselves. The associates are just compensated based on what the market rate for associates is, and so they have very large, fixed costs that they have to cover. I’ve always thought that very junior associates were paid too much, and third year, fourth year, fifth year associates weren’t paid enough. Then, the partners’ compensation was really dependent on the value they were bringing to the client, and that wasn’t always determined, from my point of view, by the client.