New England Biz Law Update
Brian R. Elworthy didn’t need to do a whole lot of soul-searching to know the partner track wasn’t for him. So after six years as an associate at Ropes & Gray, the Boston lawyer set out to find the right fit in an in-house role, starting first at inVentiv Health in Burlington.
But it was a stint waiting tables back when he was in college that would help point the way for Elworthy, now general counsel at Toast, the maker of cloud-based restaurant management and point-of-sale software he calls “the heart and soul” of the modern restaurant.
The company’s platform provides restauranteurs — from sole proprietors of pizza shops to large chains such as Jamba Juice — the tools to process orders and payments, track inventory, manage personnel, offer loyalty programs, and more.
Founded in 2012 in Cambridge, Toast has grown rapidly since Elworthy’s arrival in 2016, topping 1,000 employees worldwide this year and extending its reach to all 50 U.S. states.
In June, the company closed a Series D funding round in which it was valued at $1.4 billion.
The swift expansion has meant a full plate for Elworthy and his department, which he’s built from a solo operation upon his arrival into a five-member unit that he expects will grow this year and next.
On any given day, his responsibilities can run the gamut from helping the finance department prepare for a new investment round to reviewing Toast’s compliance with upcoming regulations to documenting a partnership agreement with one of its outside partners such as GrubHub and TripAdvisor.
Elworthy recently sat down with New England In-House’s Matthew Cove.
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Q. Professionally speaking, what keeps you awake at night?
A. With things moving so quickly, making sure that we are thinking through everything properly from a legal perspective. When I joined, there were 300 people and I was the first lawyer at the company. A lot of people weren’t sure if they should only go to legal when there was a problem. Now, everyone realizes that legal can actually help them bring to fruition a lot of the ideas that they’re working on.
So ensuring that we are providing quick service and good service to our employees while staying on top of everything is one of the first things. And keeping an eye on what’s happening right now in terms of regulation for privacy legislation. The trend is moving in a way that probably as a consumer is something I would like, but as a company in the software space it’s not necessarily favorable. Seeing where that ends up and what effect it has on software companies like Toast is something that I’m certainly watching.
Q. What are the biggest regulatory challenges for Toast as the provider of a restaurant management platform?
A. We’re a company that plays in a number of different spaces. We’re a SaaS [Software as a Service] company. We have Irish-based employees, so GDPR applies to those employees. On a local level, our product is subject to many local regulations with respect to how the product is working and interfacing with the end-user, the consumer. We’re processing payments as well, so we have a myriad of regulations we’re subject to in that area; PCI [the Payment Card Industry Data Security Standard] is one of those. It’s a pretty regulated space.
Q. What adjustments did you have to make to comply with GDPR?
A. Though we have employees based in Ireland, we do not have any European customers yet. It did require putting in place a number of data processing agreements and disclosures with our employees. But right now, because we’re not offering our services to the entire EU, we don’t yet have to put in place a fully compliant program.
Q. Has the company’s growth created a need to hire more outside counsel?
A. The workload grows as the company gets bigger, but we continue to be pretty self-reliant and we can do a lot of the work in-house. The frequency of using outside counsel does increase for some types of projects — for instance, financing or putting in place a credit facility. Those are the types of things where you really do use a specialist firm.
Even though work is increasing as the company grows, our internal resources are able to deal with many of the issues, and then we continue to use outside counsel as needed. We use a combination of larger firms — Goodwin and Ropes & Gray — and some smaller regional firms as well.
Q. Is it challenging to account for the needs of customers ranging from small shops to national chains?
A. The nice thing is our larger customers, our enterprise customers, have a lot of product requests and feature requests that are unique to them, but those requests actually make our product better for everyone else … because one of our smaller customers may actually need and like those features.
Q. What do you do to keep up with changes in the law and industry developments?
A. I’m involved in the local TechGC community in Boston, which is a great resource. It’s a national organization now with a very large presence in Boston, New York and San Francisco. Every quarter, there is a dinner focused on a topic that’s very germane but also gives you a resource and network of people to reach out to for any recommendations for counsel or questions about issues.
There are a lot of industry websites I’m constantly reading, and I’ll read any sort of news on what’s affecting our space. The nice thing is that our larger outside firms like Goodwin and Ropes will send us client alerts on areas that are affecting the company, which are helpful.
Q. What’s the work-life balance like for in-house counsel at a startup?
A. I tell everyone that I work just as hard now as I did when I was an associate at Ropes & Gray. As an associate at a firm, you’re constantly living in documents. Here, you’re working with people and the business more, and instead of giving a five- or six-page answer on something, you’re giving a five-line response in an email to move the process forward. I think I work smarter here than I did when I was at a firm — you’re forced to by the nature of how quickly things move.
