Leaning in as the Startup GC

Jeremy Muhlfelder
December 3, 2021

Transitioning from law firm life to a high-growth startup is rarely a smooth transition. There are inevitably surprises, curve-balls, and tough conversations that leave one hungry for guidance. In this Fireside chat, we sit down with Jeremy Muhlfelder, now the Lead Counsel at VRChat - a social virtual reality (VR) platform that allows users to easily build social VR content. We discuss his transition from Wilson Sonsini, the challenges of his new role, and advice he would give others making the same transition.

Why transition to a GC Startup role? Why now? What hesitations did you have in making the jump?

I’ve been working with start-ups since I was a freshman in college, and as someone interested in following technology trends, mixed reality (which includes VR, augmented reality (AR) and everything in between) has been a focus of mine for a while.  I started my legal career in the Bay Area doing a mix of corporate and blockchain regulatory work and VRChat happened to be one of my clients.   I got looped into working with them when I was a summer intern and mentioned to a senior attorney my interest in mixed reality - they immediately became one of my favorite clients and it has really come full circle.

In terms of my career trajectory, I admittedly didn’t have much interest in becoming a partner at a law firm.  I loved my clients and helping them from the outside but missed being part of the team, building something I believed in.  Law firms have a lot to offer smart young attorneys, but when you cost your clients hundreds of dollars every time they reach out to you, you’re not going to be in the loop as much as someone on the inside.  You’ll help on the matters you’re an expert in, but you don’t always get to dabble in the new, cutting edge areas where technology drives law.

As time went on, I considered what company would let me develop as a lawyer, while also developing other skills beyond that.  I also wanted to find a company whose mission, technology and business model I believed in. Then, earlier this year I had a bit of a realization. I think the pandemic gave everyone a bit of perspective, that life goes by fast and you need to prioritize what you’re passionate about.  I decided the time was right to take a leap of faith and find a landing spot with a start-up.  I had been networking with various companies but VRChat was always at the top of my list.  Luckily, my existing relationship with and knowledge of the company, combined with some serendipitous timing, allowed things to work out.

In terms of hesitations, it’s tough to leave a safe big-law job with lockstep pay increases and a clear path towards promotions.  It’s also a big change to jump from a law firm where there are standard processes, a fairly clear set of directions on each task and a standard understanding of who reviews your work, to a start-up where you have to be comfortable being uncomfortable.  

It isn’t always easy, but each day presents me with new issues and keeps me on my toes.  Some days feel like I’m in school again, going through the academic exercise of learning new substantive areas of the law.  My favorite part, though, is working on an exciting “new” technology where we don’t yet have all of the answers.  Just as you see regulators grappling with how to handle the moral and legal issues of the internet, social media and other existing internet spaces, we’ll need to define the rules of virtual worlds.  Working at the intersection of law and technology is why I went to law school in the first place, so it’s awesome getting to think about these topics every day.

Have we turned a corner in VR?

There’s a lot of momentum in the space right now, and I think there are two big reasons for that.  

First, the hardware wasn’t particularly accessible for the average consumer until recently.  In order to experience true VR you needed a high-powered gaming computer that could cost well into the four figures.  On the other hand, things like Google Cardboard really only offered experiences leveraging 360 degree cameras - so you could look around but without the ability to move, limiting that immersive feeling.  Headsets were all either cheap and limited in functionality or expensive and needed to be tethered to a computer.

The release of the Oculus Quest and, more importantly, the Quest 2, really changed the game. In my view, it feels similar to Apple launching the first workable iPhone (meaning a few generations in, when the apps and internet finally started to work).  For $300 you can buy a headset that offers full VR capabilities.  Sure, a more powerful model will have a higher upside experience, but these standalone headsets offer full “6 degrees of freedom” with the ability to move around in all directions.  The feeling of “presence,” where you are fully immersed and feel like you’re somewhere other than your living room, is a binary experience where, once you’ve done it, you get it. Even if there isn’t a ton of content to appeal to the masses at the moment, you naturally begin to imagine what’s possible.  

The second reason it’s an exciting moment for VR is the much-discussed hype around the “metaverse”.  While metaverse doesn’t have a standardized definition, the general idea is that we are living more and more online, and if you combine all of the digital spaces we occupy, that constitutes the metaverse. Many industries are leaning into this, from blockchain companies creating NFT projects, to gaming companies hosting virtual concerts using their gaming engines, even including two-dimensional spaces like Reddit and Twitter.  Of course, Facebook’s (or should I say “Meta’s”) recent announcement was validation of this trend.

No industry is better positioned to benefit from all of this than VR.  The pandemic sped up the adoption of various new norms, from remote work to attending virtual events to making new friends and socializing online. As we lean into these changes, businesses and content creators will continue to build out the digital world.  Currently, much of that is being done in two dimensions or for games played on screens.  As we move forward, more and more of this will be built in virtual universes leveraging VR and AR.  As noted above, the technology is there but we haven’t yet seen the “killer app” or loads of high-quality content.  This second trend will help bridge that gap.  Things like fitness, education and training will join gaming and entertainment in the near term, with other forms of content we haven’t yet dreamed up in the longer term.

How to prepare for the GC role. Any advice?

One piece of advice that I’ve gotten, and something I wasn’t immediately prepared for, is that when you’re in-house, you are “the business.”  When you’re outside counsel, you advise your clients on the benefits and risks of each decision, but ultimately you defer to the client’s risk tolerance. In-house, you still need to identify the pros and cons of each decision, but you often need to weigh them yourself and pull the trigger.  This is one of the best parts of my transition to in-house and has let me get more involved in company strategy, but it certainly took some adjusting from the law firm mentality of “provide all of the facts and let the client decide.”

Another piece of advice that I’d offer is that most companies wait too long to bring in a lawyer, and most lawyers who want to make this transition wait too long before trying to make the jump.  In-house lawyers can be a fundamental team member in navigating business decisions, especially in businesses where law and regulation instruct product decisions.

If you really think about it, a lawyer who spends 8 years at a law firm doing dealwork may get tangential exposure to the issues they would see in-house, but the two jobs require different skill sets and are composed of different substantive areas of the law.  Seeing employment or IP-related issues in deal diligence gets you familiar with these topics, but it doesn’t teach you about the nuisances of international employment laws or how to file a patent.

As an in-house lawyer, you’re part lawyer, part project manager and part legal operations coordinator.  Being able to identify issues, perform research and teach yourself new things is a huge part of the job.  You can (and need to) loop in outside counsel to help on big ticket items or those issues you are less familiar with. It’s also key to leverage your network of peers (thanks TechGC!), especially where you’re the only lawyer at your company.

I certainly understand why people spend more time at law firms, learning and becoming more comfortable as lawyers before trying to go in-house, but I don’t think that’s the only way to do it.  If you’re interested in going in-house earlier in your career, network with start-ups you’re passionate about, learn about their businesses and shoot your shot.  If you show you can add value and be a team player, you may be able to make the move sooner than you think.

What are the challenges of being a startup GC? How do you manage your work effectively?  Do you often call on your peers for guidance?

My biggest challenge is identifying, understanding and prioritizing all of the different areas of law that are in play for VRChat.  Like any company, we have corporate, employment, commercial and intellectual property matters to deal with, along with other areas of the law specific to our company and industry.  Going from a law firm where my work consisted primarily of running deals and drafting board minutes to knowing “all of the laws” is a long-term project.  Being able to identify risks, develop an understanding of how they impact VRChat specifically and determine how to prioritize different workstreams is a focus of mine.

In addition, one of our biggest projects right now is building out a virtual economy - to enable creators to build awesome things in virtual reality, sell their creations to others and earn real money - which I am actively involved in.  To me, it’s the most exciting thing we’re building at VRChat, but it’s a big-time project with lots of moving parts.  I spend a lot of my time doing research to understand the relevant regulations, our competitors’ approaches and really anything that touches on the “metaverse” or virtual economies.  Fortunately, I find this one as rewarding as it is challenging.

In terms of managing all of this, my law firm had made a serious push to get us to use project management tools and, as someone actively involved in those projects, I was already predisposed to using them.  Given my job is a combination of longer-term projects and putting out fires as they come up, I am constantly analyzing what our top priorities are, knowing that other matters will likely come up on an as-needed basis, and attacking things accordingly.  I find this is an art not a science, so I’m still finessing my approach all of the time.

I absolutely engage with my peers for guidance.  I attended a recent TechGC conference in San Francisco which was a highlight of my year.  It was inspiring to hear from successful in-house attorneys at amazing companies who started in similar positions to mine now.  Whether it’s someone who is also the only lawyer at their start-up, someone who built a legal team from one to 30 or simply re-connecting with other Wilson Sonsini alumni who are experts in particular areas of the law, communities like TechGC let you tap into the knowledgebase of some of the smartest lawyers in the world   It’s like our own decentralized law firm, and I look forward to continuing to build those relationships.

What are the personal & professional impacts of moving in-house from a law firm?  Why do you think in-house suits you well?

In short, I’m really excited.  My decision to go to law school was based on a loose plan to develop a hybrid business-legal skill set, join a start-up and make an impact on the future (I know a lot of the Silicon Valley mantras have become a bit cliche, but I stand by this one at least).  As we all know, plans don’t always work out exactly as intended, especially when they’re over a long time horizon.  While I was fortunate enough to work with start-ups throughout my time in law school and at a law firm, joining VRChat was a result that took about a decade to come to fruition.

It won’t come as a surprise to say I’m far more fulfilled in my current role, but the in-house vs. outside counsel comparison is a tough one that comes down to personal preference.  Law firms provide top-notch job security, prestige and compensation.  Even in a global pandemic, many law firms saw more business than ever and revised compensation structures accordingly.  On the contrary, most start-ups fail and, at the least, lack the same level of name recognition.  Law firms are also essential partners for us, and we couldn’t build what we’re building without their support.  

For me, though, it’s a fundamental change that better aligns with me on both a micro and macro level.  Day to day, this job requires you to be scrappy and wear all sorts of different hats.  There isn’t an instruction manual, so I’m given the opportunity to be creative and innovative and figure things out by doing them.  I am at my best when I can be dynamic, which this role certainly allows.  In the longer term, I get to help build something amazing that I’m passionate about.  I love getting to work with our team on a shared vision, learn new things each day and be on the forefront of an emerging industry.  Lawyers and entrepreneurs may seem pretty different, but if you find the right place to do it, there’s a way to be a bit of both.

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Jeremy Muhlfelder
Jeremy Muhlfelder is a passionate and future-focused technology attorney serving as Lead Counsel at VRChat, a leading social VR platform. He joined VRChat after starting his legal career at Wilson Sonsini Goodrich & Rosati in the Bay Area.