[0:00] what does the law firm doHello, the guests today are Mehak and Neil. They were both the JD MB A class of 2016 and they started a law firm together, the best finance law firm in America. Hi Mehak. Hi, Neil, What does your law firm do? So legal scale, it's a corporate law boutique. We think that we're among the best and receive the best education at Cornell Law School. Mac and I also went to Johnson Cornell's Business School as well. We are focused on all manner of corporate transactions. Mac and I work out of the New York office, but we have offices in Boston. We have offices across the country. We have a few team members in Israel as well. We're focused on taking money into businesses, taking money into funds, and doing mission critical financing transactions. From there, I lead the equity practice as well as the funds practice. Mac, why don't you talk about everything you do? Yeah, absolutely. So I had the debt finance practice as well as the M and A practice. Basically our focus is, like Neil said, mission critical financings for companies. So whether money's going out or money's coming in, we want to be there for that milestone for these companies and the funds themselves. We represent both on the fun side for private credit funds, private equity funds, as well as on the company side for companies that are getting their Series A, Series B or are getting their first step financing facility or are selling their company. So we try to be there for all these critical points of inflection for the companies overall. What are specific examples? Like is it like when a company is raising debt to buy another company? So one example I'll use is a company that was going to purchase another company, but they had to do it in two different ways. In the back end, we represented them on the buy side in the M and A process we helped set up a fund to get capital from various investors for purchase and to supplement that capital we help them set up a debt facility for acquisition financing. So we did all three different parts of their capital allocation for this M and A process. But that's pretty typical where we work with companies that need debt financing to fund an acquisition as well as perhaps equity raise or investor raise. So that's not a typical in any way. My child. So in that example, it's helpful to have one law firm for all three of those parts because then they cannot talk to each other. Tony, you hit the nail on the head. The reason why it's so helpful to have it all in house is you're not paying crazy amount of legal dollars for law firms to talk to each other, right? We have excellent communication within our firms. We can streamline these processes where we have all the knowledge in house and can make it as quick and easy as possible for us to get the deal done for the quiet. And then like it sounded very complex that there's so much complexity to all the different pieces moving. Is all the complexity necessary or did the client request it all? What was the reason behind the complexity? Yeah. I think that, well, First off, things can be quite complex, but our goal seek primarily is to keep things as simple as possible. Now it applies whether we're on the borrower side or the longer side or whether on the investor side or the fun side. For me, complexity arises because of the nature of financial modeling and achieving our clients goal seek. In some ways, the smaller facilities or the smaller funds can actually be even more complex. And there's a variety of reasons for that. The Long story short is that we always want to focus on the few mission critical items that matter. But within my practice of funds work, that's getting dollars into the funds from investors that understand what the fund is trying to achieve and have consistent expectations with what the fund is trying to achieve. Warren Buffett says. And it certainly resonates with us. Don't have the ballet fan go to the rock concert, right? And so we want to have them write market segmentation. And that is it's better to be simple and candid with respect to your funding expectations. If you're investing in distressed debt, that could be a lot like a rock concert. And then people that want to go to a much more regular way ballet would feel at odds with what's going on within the fund on a day-to-day basis. Even if the returns are phenomenal, there could be just a lack of intestinal fortitude for what that involves. And so I think that what we're trying to keep things as simple as possible, complexity arises because of the nature of allocating dollars to complex deals and needing clients goal seek. But even there, we're trying to find the simplicity on the other side of complexity. So like is the goal seek, like is it like the most money coming in, the most profit, the most return?

[5:00] goal seek of clientsLike what are the different goals that people go for you? Sometimes, I mean certainly like raising more dollars or getting a larger facility is often the goal. I really think it's again, I think it's about like the right capital and the right clients versus anything else in the heck. Do you want to speak to it on your side with that partnership between borrow and lender? Yeah, it's really important. And what I always say to my clients is especially when it comes to that financing facility, a loan agreement, you have what I like to call a living document because it's a relationship that's going to be ongoing for 23457 years. It it's really important to make sure that you get in with the right people. That is something that comes across at the term sheet stage but then lasts for a long time to make sure that you have that good relationship. All contrasted with an M and a agreement where perhaps you buy the company and that's it. You may have other small lasting relationship with like a services agreement or people that were in the business previously assisting on the management of the transition, but it's not an ongoing relationship like it is on the debt side. So it is really important to make sure that you have a good relationship with people that you can trust and people that you want to work like going forward. Because like a debt, for example, it could be like over 30 years, the payback period. So then that's. Why it's That's more like a mortgage Where you know you have your mortgage lender last for 30 years. Typically our debt financing facilities last anywhere from like three to seven years and that it's still a very long time for especially for younger companies that may when we have started let's say three years ago. So seven years is double the time that they've already been in place. That's why you have to find like the right partners on both sides. Exactly. That's right. So as the law firm, do you help match them so that the ballet people go with ballet and the rock people go with rock, or do you more try to have the document reflect that? It's probably the latter. There are times which is based upon the negotiation, it becomes clear to us that somebody has the wrong ticket to the valley or set a rock concert type thing. But I think what we're trying to do is provide that clear sign at the outset that like here's what we're trying to do, here's what we're trying to achieve. And so from a hack of covenants, the representations, everything in the credit facility goes towards and supports those expectations. And then maybe even more so on the fun side, it's risk factors. So the people know what they're getting into, what the risks are of the funds. Here's a summary box which will summarize all of the key terms of the fund and is often what investors focus on when they're making a capital allocation decisions. And then in support of that, one of the things about legal scale, once those funds are formed, they might work with a hacker, another team member in order to deploy those funds into different deals. I think that holistic sense of Neil put out the documentation that reflects this and now let's execute on that within our own documentation results in a hand in glove approach which is helpful for legal scales clients. Gotcha. So it's not just the the borrower and the lender are both rock and rock, but the law firm has to be a rock as well. I think the law firm should know what's going on when people bring in too many different legal counsels. Given the nature of turnover on those teams, people being different silos, what we try to do is delete and remove those silos and provide a consolidated and holistic approach to a client's needs. I think the legal scale advantage is that the Heck and I are constantly in communication. We're both in 2 Park Ave. right now. But second, and even more important, it's an entire team that's focused, dedicated and communicating those clients needs to one another so that people are passing the baton and getting something done. Gotcha. Back to the rock counselor in the ballet, how different are the borrowers and lenders in rock concert versus the ballet? Like is it the terms of like how aggressive they are or like how risk averse they are? Like what are the differences between? I'll let the heck speak to a first date does the loan side, but from my perspective, every product that we work on, whether

[9:08] how to find the right fit between borrowers and lendersit's a funds or the deployments of capital underneath that funds aggressiveness, interesting things that can really matter, but sometimes people focus overly on interest rate or pure economic terms versus duration. When do you want your money back? What do you want your capital used for? So a use of proceeds or use of capital provision. What type of buyout fund are you buying and where are they situated with geography? Are they going to be buying businesses that are just based in, you know, Poughkeepsie, NY is going to be a lot bigger of the scope to not will be international will be different currencies. There's a huge number of criterion in which people are making different decisions and our goal overall is to make sure that people are really think about those in a rank sorted way. Geography matters first and foremost, maybe currency, maybe something else, but every feature that we think about for a product, some of those might be not that important to one client and incredibly important to another. And the heck you want to speak to it more as dedicated to loans your expertise. Yeah, I think that's right. So a lot of it does differentiate and I would say it's largely based on the market at the time, right. So it depends on what the interest rates are at any given point, whether we're expecting a raise or a stop or decline, which hasn't happened in recent times. But that informs a lot of the activity. And what I like to tell my borrower side clients is get 3-4 term sheets before you sign on to 1. And that way you can get an idea of what the market looks like and also get an idea of what kind of lender you want to work with. That helps a lot in order to facilitate narrowing down the exact facility that you want to go with. Because once you sign a term sheet, you're really locked. Even though they're non binding term sheets mostly that we signed, you're still kind of locked in to proceeding with that process. So it's great to surveying the market, understand what it is and you know, at legal scale, what we have the benefit of is seeing a thousand term sheets a week because we have so many clients that get all these 3-4 term sheets that come to us. And so we're able to see exactly what's out in the market and able to advise clients in respect of, hey, take this, no, don't take this. We're able to provide that level of expertise. They might only see a couple per year, but. You see? That that's exactly it or analogy there is that pack and I are the actors in movies and or clients are the directors. So if you take Quentin Tarantino career, he's going to do 10 or 11 movies in his entire career and his dedication devotion to those make this happen. That's like our clients thinking about things from inception. There's a pipeline. We totally appreciate their experience. Heck and I are the actors in movies and Heck is Samuel L Jackson. She works with Quinton a lot, but she's also in 200 movies versus 11. So we have a different sense and different cross section for the market that I think provides. And so we're sharing things back and forth that help inform and create a consolidated view for the things that we should be working on together. And you're also across the America and global. Too. Exactly. Yeah, and. What are the other different pieces? Like Israel, also a banker as well. Like what are the different parts of them? So it really varies. The ecosystem that we encounter varies per transaction. So for funds, what we're really speaking to is there's investors

[12:36] how the law firm fits into the finance ecosystemand funds and those are various shapes and sizes and funds could be large family offices, could be Jeff Bezos family office. It could also be an individual investor that wants to sit alongside of a manager and people were college roommates or something that provided for that. Seen that exact scenario play out before. So investors and investment managers that are putting together their funds are the key parts in the ecosystem. The support for that ecosystem comes down to attorneys. It also comes down to police and agents, people that are looking to match up interested investors with funds. There are fund admins that put together the fund documentation, put together key ones, make sure that the funds are investing in the right things and are administrator, custodian, capital, and the point cap on behalf of the fund. There's accountants, there's auditors, there's a slew of other items that could be very fun specific. And for some, the VC funds and the private equity funds and the private credit funds can all need difference administrators and different support. That in mind, it really varies. Imagine maybe talk about your ecosystem and the key players there. It does really matter as to who you're looking at. So if our company's early stage, we have a great slew of folks that like to invest in that on the debt side for early stage financings. I know that SBB, Silicon Valley Bank is great for providing early stage capital and then there are a bunch of private credit funds that do that as well. But then when company graduates and starts to require more capital or more complex capital, we start to get into the private credit fund area or more complex bank area as well. So the goal being to make sure that the capital funding for the company is growing along with the growth of the company as well. Gotcha. That makes sense. So it sounds like the firm covers all kinds of different things, but the common point is there's some general counsel somewhere who needs all these different services. And we endeavor to be a general counsel's best friend. Sometimes it's business people that we've worked with in the past too that are looking to undertake a transaction. We have principals that are looking to engage us in order to put together documentation so they both feel comfortable engaging A transaction. There's a mutual win if that transaction proceeds, right? The lenders get paid interest, the borrower grows because they have capital that comes in that doesn't dilute their own equity, right? Or if we're doing AVC transaction, the investors get to participate in the upside of Entropic or some other company and then Entropic gets more capital on the equity side that gives it substantial flexibility to grow the business exponentially. Like how do you differentiate from other law firms? Well, I think differentiation for us is relatively easy

[15:18] how to differentiate from other law firmsbecause so many large law firms look relatively similar. When you go to a large law firm, you know you're going to get an excellent team. There will be a hierarchy of course, because there is the senior partner or the other partner working on a matter of council. For legal scale, we only hire senior attorneys so that hierarchy is much less embedded in our DNA than others. We knew that adding an 8th or 9th or 12th year counsel or associate would really help our process, which is very AI driven. And so our goal sink is to take the best and hardest working minds in the profession, couple that with corporate and enterprise grade AI that has all safeties and protocols, and then be able to leverage that within transactions with an incredible bench of paralegals. And So what we're trying to do is create a dedicated team. I think the other thing you get from us and you might not get from other law firms is connectivity and hack and I, for our best clients, have economies of scope as well as scale. So what we're looking for is to make sure that we have the hall pass. Not only are we talking to that team member, but we might go around and then talk to and I think that's the goal seek in addition to giving those guys Donuts or whatever else, we want to be front of mind and to know exactly what the whole team is working on so we can help them deliver. Got you. So you're able to cover a lot more than just one partner. A big law firm. That's right. Yeah. I think we it's scope. It's a really bad scope. Go on. The heck? Sorry. Yeah, that's exactly right. And So what ends up happening and this has happened for our clients where we come in for a particular project. So let's say that they have a debt financing facility that we're coming in for. At that point we do a fantastic job with that and then they use us for everything else. So that's really our goal is to be the go to for our clients, even if it's something that let's say legal scale does not do, we still quarterback and make referrals and we have a vast network of professionals that we can refer people out to. So like earlier, Neil said that it was very AI driven. Like how does it become more AI driven over time? I do have to run to a flight, but I think the heck, and I would be remiss if we didn't mention Tony, you're doing an amazing job with this podcast. But you know, and I would say 2nd and as important, Tony, just for everyone that knows that listens to this podcast is an amazing resource for Cornell. Since he graduated in 2012, I've met nobody that that is a bigger fan of Big Red than Tony. And the heck and I are very big fans of Big Red. So one thing Tony drew, a remarkable athlete for Cornell and Cornellians, you put Cornellians together in ways that have uniquely impacted my own life as well as my hacks. And so we were just an enormous advocate for what you do. I wish I could say for the entire pod that this is part and parcel of what you're doing. And I would say your podcast with Professor Silverstein and others have been great for how can I listen to too or big fans of the pod and what you're working on? Thanks so much, Neil. Of course, I'll talk to you guys soon.

[18:10] how the law firm uses AISo I think that that is a great question. And how are we using AI? So we have integrated AI into our systems. We're using Gemini for enterprise within legal scale to ensure that we can make things more efficient, but also get more detailed results when we are going through our research and going through our application of drafting. On top of that, we've also enveloped Practical Law and West Law and their AI tools as well. Our team is fantastic in respect of adopting the new technology that we have, as well as using it to our benefit. Everyone knows about AI hallucinations, so we currently vet everything that we are getting when it comes from our AI tool. However, it does make things a lot faster and more efficient, and that's exactly what our clients are looking for. Well, like I'm trying to picture whether like you did the borrow lender as a lender like like for does it help you come up with the new covenants? Does it come up with like other scenarios that you didn't think about that you have to cover in the legal document? Like what are examples of how it helps? So just the other day, you know, I was looking up something where I had already one scenario 2 down and in my head I was like that's those are the two scenarios. But it did give me a scenario 3, really helpful for me to think through and then understand exactly how that might be implicated with the fact set that I had. While we didn't end up going with scenario 3, it's always good to have that alternative and to understand what could happen. So what AI does is unlock the tools for us to use our own thinking further. Where I might be limited to 1 and 2, now I'm thinking about 3 as well and it allows me to use that as a tool to understand whether what potential outcomes there could be. Like how different were scenarios one and two and how different was 3 from those? Is it like in the difference in duration of the loan or was it in the difference in the covenant? Like which covenant to put in place? Like how different were the scenarios from each other? So in that example it was more like what could be legal outcomes for this potential problem. So the problem itself was, hey,

[20:48] example of a specific issuethis borrower might have a regulatory issue and how can I understand this regulatory issue? So it was on usury laws, for example, where they were trying to put together an exit fee on top of their regular interest rate and default rate and prepayment fees. So it was an addition thing where we're going to add on an exit fee. The question was can we add on an exit fee when we already have these other fees and would that violate usury laws? So we had to go through all the usury laws based on New York law because that's what the loan of Rimmel was based on. And to understand, all right, scenario one, we enforced this loan agreement in the case that there's a default, when the defaults on the obligations under the loan agreement, we have to enforce it. Do we take it to court? Do we settle it out of court? Or is anything going to be enforceable itself? So I went through those scenarios myself, plus with AI, and I was able to understand more about what potential outcomes there could be based on case law, which was very helpful. Actually, I was able to come up with a whole different scenario whether you enforce the interesting. Yeah, exactly. So that was helpful for me to go through all the case law without doing a 40 minute deep dive into all the case law. So we got summaries and we have it linked to our research tool as well on Westlaw. So that definitely cut down the time. There was also this like incredible bench of paralegals as well. But how do you work between the AI part and then also the paralegal part? What's the ratio of work like now? The great thing is that all of our paralegals are powered by AI as well. So can they have that tool like we do across the entire firm and they're able to produce documents way faster than we could before, which includes, for example, when you're looking for a particular provision within any sort of agreement. You can quickly just news Gemini for hey, can you draft this for of provision that I need for XYZ reasons? It drafts it. We compared against our own precedents to ensure compatibility and ensure correctness. Once we do that, it saves many, many minutes for having this draft. Our paralegal team is fantastic. They are able to do a ton or attorney attorneys are all senior attorneys. So our paralegals act like associates. It's as hierarchical as a big law firm, so apparently. Exactly. So as the paralegals get more empowered by the AI, are you able to take on more cases over time because of that so you're able to solve the cases faster? So our transactions, we definitely take on more and more transactions because we have a fantastic team, but our attorneys are more senior attorneys. So they're able to take on a lot of transactions on their own long will and support for more other senior attorneys. Our schemes are always built with people that actually know what they're doing, as opposed to fresh out of law school that may just be on the learning process, which is great. I was there myself. This way, our clients are getting grade A advice from day one and Grade A support from our paralegal team as well. So we tried to make transactions as efficient as possible, being being able to take on more and being able to work on more given the distribution throughout the team. Yeah. That makes sense. And then how does it affect like the the fees that you charge to the clients, are you are they based on billable hours still or whether?

[25:11] billable hours and transparencyThe yeah, we still build based on billable hours. However, what we try to do more than other law firms is provide transparency. We constantly have updates with our clients as to, hey, we're still on track on the estimate that we provided to you early on or hey, things have gone sideways and here's the reason why and let's talk about it. But our goal is always to be super transparent. But whenever people come to legal scale, they're not going to be paying the Nosebleed rates that have been at large offerings. Well like like as AI gets like chews up more and more tokens overtime, like if it's reading a lot of documents, chews up more tokens. Are you passing that cost on to the client now? Where is it still a small amount that it doesn't have to be passed on yet. Yeah, No, the great thing about legal scale is while we have a fantastic office in New York, we're not paying for A50 story building that a lot of larger laws are paying for. So we keep the cost of our research tools and software on ourselves and what we pass on to the clients is our work product and the fantastic work product that they get from us. We're using as a tool to enhance legal scale but and to provide fantastic billing rates to our clients as well. So from the general counsel perspective, the client side, do you have the portfolio of other law firms they usually work with? Do they try to do some of the work themselves as well? What's the distribution like usually? Agree, counsel. We work with a lot of general counsel, so we'll be basically G CS best friend on a lot of these transactions. So a lot of our clients have G CS already in house, which is great. And that helps us move transactions along because what we like to do is separate out the business part from the legal part on transactions. It streams lines things where if there's something purely legal, I don't need to bother the CEO. That's something I can handle with opposing household or I'll consult with the GC. And then there are business points like economics on transactions and other things that would affect the day-to-day of the business that I know the CEOCFOCEO will need to hear. So I what I like to do is separate those two things out so that they have a focus list of 10 things that they need to focus on. And then I have 10 things for the GC to work on. But it's always a great sign whenever a company does have AGC in place because not only can I work directly with that person, but also that shows growth in the company itself. Because when the first starts out, they might not even have AG and over time and they might have AGC. So the obvious companies are very lean. It's just like a couple funds and then they just allocate money from there. They don't have the infrastructure a lot of times. And you know, that's what I've noticed a lot is one of the last hires is AGC. They definitely want to have obviously the CEO and founder, CFO, the COOCTO, depending on the type of company, they need all those positions in place. Then you definitely need something like a Comptroller, anyone that's handling the finances of the company. And then of course, you need associates and anyone else doing the business in the sales part of the business. But one of the last things that I've noticed being hired is in GC. Wow. So you have to be. Like the GC for them then. That's why it's important. Yeah, often. What happens is we'll come in for a particular transaction. So let's say the company is doing like a debt raise and we'll work with them on the debt raise. And then they kind of come to us for everything else including like employment agreements or vendor contracts, supplier agreements. And we end up doing all that for the company because we know the company intimately at that point. Yeah, that makes sense. So is there usually like common entry point and then once they get in the rest of the comes in? Fun formation is usually a big one, right? Because once you have a fun then it makes sense to do all the other work as well. I think fun. Formation is the fantastic point is that, you know, let's say

[29:46] client acquisitionNeil and his group would raise the fund itself and we get investors in, we do all the documentation and disclosures that we need and then from there they need to deploy the capital somewhere. So whether that is a fund where it's investing in equity of companies or it's a fund that's investing in providing debt to other companies or providing capital for an acquisition, all of that we can do in house, which is fantastic because you then get the synergy of working across these groups. So there may be some restrictions within the fund documents when it comes to the deployment of capital that now my funds team would know very well when I'm putting together our debt financing facility. So it does save a lot on legal dollars and way more importantly it's fine. Gotcha that. Makes sense. And then for the the fund work too, it's a continuous thing where you have to do the K ones, you have to file that. So then it's always continuous. So you're able to sticky more sticky relationship exactly and. That's definitely the case where the funds may have multiple investment periods where it's not the final close of the fund, but you have first close, second close, then a final close. So investors may come in on a staggered basis, which obviously along is the close of the fund, but then the fund itself lives for a number of years. There's repayments that you need to make to the investors themselves. There may be buyouts of stakes within the fund for the particular investors. There's always ongoing work that comes along with it. So when you first started the law firm, we were like a couple like tempos. They were focused on starting initially, like immediately. So you get like an initial stream of business and over time you build up the rest of the tents, the tent, like what were the like the first two things that you put up? Yeah. So I think. What part of the legal scale which was?

[32:00] the earliest clientsThere were a number of. Folks that were just either overcharged or getting bad advice from other law firms and we were able to assist that in respectful of providing good advice and providing it at our rate that was digestible by a lot of people. We started working for different clients. We were adding the one to two clients a month and then it took off where now we're adding 10 to 15 clients a month. But the growth came from working with companies at an earlier stage, whether that's on the fund side or the company side. So as an example, one fund that we started working with was at 100 million AUM and now they're more than 2 billion. So we've grown a lot of our clients and that's also helped us procure more clients. I think what's the most important thing is the market knowledge that we've gotten by working within this market, within this group of folks is understanding exactly what is in the market on the borrower slash company side or the investor slash lender side. We really know what is passing muster these days in terms of transactions and what's getting done so we can advise our clients appropriately because you see so many. Of the transactions, they may only see like 10. Words so so. You see a lot more exactly. Like how do you break down the? Landscape of the different transactions, like do you see like one person of all the transactions now do you see maybe a portion but then you also get ears into a lot more because of all the work that you do. Like how do you see the penetration to the market? Yeah, I think. They see it really well and I think it's on both sides of the coin. So on the company side, whenever they get term sheets, whether it's for equity investment or a debt financing facility, we tend to get rid of four term sheets on any given time so we can see exactly what they're receiving from investors or letting. On the flip side, when it's an investor or lender, we'll see what they're putting out into the market. And when deals die, why do these deals die? Maybe the returns were too juicy, maybe the interest was too high, maybe the fees were too high, or there wasn't an ability for the company to get out of that facility if there is a prepayment, for example. What would actually thread the needle on these sorts of transactions? Gotcha. Let me see so many more. Once you have all that knowledge, are you able to create a whole new structure that's never existed before? Are you able to create one standardized structure that will work for like 90% of all the transactions? And you just push that one out and everybody gets familiar with that one? Like, is there anything that you do after you get all that knowledge? So we actually do. Both. I'll use the first example as something that we've done a ton of times where we listen to exactly what is being expressed by both sides of the commercial plane. So whether it's the borrower and the lender, you're in company, try to understand exactly what their goal seeking is. We may end up coming up with a novel structure which we've done a number of times where essentially we say, OK, this cookie clutter thing doesn't work for you guys. We need to figure out something else that has the proper treatment, has the proper structure for investment and the proper protections that you might need for the actual investment that you're making. So we've done spoke structuring previously. And then on the other hand, what we've done as well is create form documents for our investor, our lender side clients where we have created, OK, so this is what the credit agreement looks like, this is what the guarantee looks like, part agreement, resolutions, docs, this is our package. It's a great exercise for us because then we can make sure that the docs are uniform and the lender thoroughly understands what generally they're not look like when they're putting out this capital. Of course, everything's tailored to any particular transaction, but that helps to uniform it. And on the back end, what I really like about that too is let's say that the lender itself is getting a warehouse facility, meaning that they're having back leverage or providing leverage to their own clients, having uniform documents that way. We're really happy with that to get that back leverage so that the facility provider understands that everything is uniform as well. This is interesting. You're able to structure it all just to Buddy's expectations. Is it, is it the clients? I guess the client themselves, they also have this level of sophistication around these products that they also expect this kind of thing too then I think. Part of it too is especially on the lender side, they've done this a number of times. Sometimes on the borrower side, it's the first time they're getting a debt facility or the first time they're raising. So sometimes it's for us to help them understand exactly what is going into it, what their protections are, what might be situations that they need to take into mind when going forward, potential work seats that are awarded to lenders, potential or observer seats, things like that, that might encroach on the business itself. So we apprise our clients of all of those potentials so that they understand exactly what they're getting into. But you're right, Tony, in that sense, like a lot of lenders already know what they're doing. A lot of investors know what they're doing because they've done it a number of times previously. Like who else speaks this language? Of like they're like, also like judges in the, like the like Delaware Chancery Court. Do they this language as well? Like who understands this language? I think what we do at legal scale. Is more on the business side of things, less on the court side that we do corporate work where we're really dealing with contracts. So we'll draft the contract itself, but then if it gets adjudicated, of course there is an exercise of remedies then if it goes to Delaware Transfer Corps or wherever else it might be scrutinized. So we try to keep the document as tight as possible so that if it is adjudicated in any way, then whomever our client is, is protected. So to use an example, we had a client that a couple years ago filed for bankruptcy. So we were borrowed aside, they filed for bankruptcy, we helped review and mark up the credit agreement that they ended up entering into. We made it airtight where the lender wasn't able to take total control of the company, but rather the founders were able to file for bankruptcy, get whatever they could recoup from the assets that they had at that time and not come out in a bad way from that bankruptcy filing. And they've actually gone on to start a new business since then. Exactly. So that's the goal is like whomever we're representing to make sure that is airtight for that client. Interesting. Is it airtight because you came of all? The scenarios beforehand, so you know, like this was a scenario

[40:16] airtight contracts and stress testingyou prepared for. Is that what airtight means? Yeah, so I was saying. 99% of my time I've been thinking about the 1% risk. That's really what lawyers do. And what good lawyers really focus on is how could this go wrong? So anytime I'm looking at a document, it's great. If everything is hunky Dory and everyone's happy and there's no issues whatsoever, fantastic. No one will look at a document in that scenario when they do. Look at a document is. When everything went well. So in that scenario, I need to stress test everything that I've put into this document to make sure will it hold up under scrutiny of a bad scenario. So what is that bad scenario? I go through every single covenant, or every single event of the fault, or every single trigger that might cause any problems and stress test. Gotcha. And you did this JD, MB A. Does that make you better prepared to come up with these scenarios? Like, how does the MBA help with this? Yeah, I think so. What helps me? Is not just be somebody that clicks and clacks on a keyboard. I am able to understand from the business perspective as to what matters to people. And I think not only my MBA helps with that, but also the fact that I'm a founder and managing partner of legal scale. I'm an entrepreneur. So I understand the headaches that come with being an entrepreneur and also with running a business. That really does help me understand exactly what might be an issue to the folks that have poured their hearts and souls into starting a business that makes sense. And then like we're choosing the programs to study. How did you choose the Cornells? Like the how did you choose to do the JD? MB? AA lot of people just do the JD or just do the MBA. How did you choose to do both? Yeah, well, I always. Wanted to be a lawyer and I always wanted to be a corporate

[42:26] choosing to do JD/MBAlawyer, which is not typical for most people. They always watch these TV shows where everyone's at court and it's like, that's what I want to do. But for me, I was like, no, I want to do deals. So I was always interested in that. I was also a math major in undergrad, so I have a little bit of a nerdy streak to me. And I think that's what brought me towards the MBA. This is a fantastic school. I really want to use all of its resources. So why wouldn't I also get my MBA? And what that's done for me is bring that business mindset to every deal that I do. I don't just look at it as a lot of my counterparts in other law firms do, is just like, well, I don't do the math. I only do the legal and that's it. It's like, well, get me into the Excel spreadsheets, get me involved. So I enjoy that because our clients respond to that very well. Is there also like the loans? Is there also more creativity in this practice area compared to

[43:30] creativity in debt finance practiceother areas too? I 100% agree there. Is so the reason why I would say that too is that is less regulated than other practice areas. So for example, for capital markets, if you're doing an IPO, there's the SEC rules, there is filings that you need to make and you have to do it appropriately. There's disclosures to clients and disclosure to potential investors that you need to make correctly. And as anybody at Cornell taking Sacre in the law school can tell you, there's 1000 different rules that you need to follow. What I like about the net finance practice is that there are way fewer actual regulations. There's a few that we need to follow, but what that allows for is the business minds meeting together and making a deal that works for both of them and not being totally regulated by outside factors so we're able to create bespoke credit agreements and facilities that tie to the underlying receivables. Let's say or. Other items that we're financing for the borrower itself, whatever it is, receivables, equipment, just general working capital, whatever it is, it's always tied to the company itself and we can make it bespoke to that while also protecting the lenders interests where maybe we have different financial covenants that are testing. I think there's a ton of creativity, and I like that because that brings out my artistic nature as well as my mathematical nature. Yeah, that's so. Interesting. And then also like because you're a cofounder of this law firm, you have less bureaucracy than like a large law firm. Does that let you be the more creative? Does a big law firm stifle because there's so many other partners I have to agree on. So yeah, it depends on the. Transaction itself or large law firms, there's still only one or two partners on a transaction and then other folks. But it does allow me to work directly with clients where I'll just call a client and say hey, what you're talking about doesn't work whatsoever. But here are two alternatives that we can think about or on the flip side say hey, you had a great idea, this is fantastic here's how we can make it work within our documents. So it does allow us to be more creative. And I think what helps is that our clients themselves are very creative as well, very interested in needs and view types of ideas. If you're at a huge bank and you've done this transaction 10 times, you're not going to take the niche way to do it. You're going to just do the same thing that you've done 1000 times. As our clients are more receptive, more interesting solutions, are they more creative because there's. More emerging small niche areas that you could be creative in, but then as it grows bigger, it'll get bigger and then they can expand with that. Is that why they're more creative? They're definitely more creative because I think they're taking. More risks, right? They're investing. In companies that are in. Earlier stage than these larger banks would and in that sense they're able to work with the company and make sure that it is tailored to them as opposed to just providing them with a basic level term loan facility or you know, series D raise whatever else that people have done before a glass of the house. But they're what these larger firms do is they try to race, they want to be the first to be second. They don't want to be the first. They want to be the first to be second. So what our clients tend to do is to be the first to be first where they're coming in and they're able to tailor something for the company and help them grow. It's critical because if no one takes a chance on these early stage companies, we wouldn't have all the fantastic huge companies that we do know. And for the closing question, I always ask the. Guest, what's the kindest thing anyone's ever done for you? I would say at the very.

[48:01] closing questionBeginning of one of our clients, I thought that I might have overdone a term sheet. I, I basically received a term sheet from one of our clients that was going to go out and I rewrote the whole thing and I sent it out and I was like I don't know if they're going to be happy about this because I did end up rewriting it. People are they're, they're more stuck to what they've drafted. So I took that and then I got an e-mail back saying, the heck, this is a gem. This is one of the best things that I've ever seen. And that really put me in a great mood and help helped me understand that we need to help our clients. We need to do this, war them, and I should be able to rewrite things and I shouldn't worry about it because nobody has pride of authorship. And that was a great thing in my career, to catapult me and to take chances, help people and make it work. Thanks for sharing.