LexTalk World Interviews Mr. Ehsan Alagheband Hosseini. Ehsan is a skilled legal professional with a decade of experience as an in-house lawyer. Ehsan received his LL.M in 2014 from University of Tehran in international trade law. His domain of expertise is principally in the start-up ecosystem of Iran. He is currently working as a senior contract specialist for Divar, an E-commerce website and mobile application. Ehsan has a strong background in corporate, commercial and contract negotiation. With a strong business sense and commitment, he is recognized for providing remarkable legal support and guidance for small to mid-sized businesses. To improve his knowledge and have a better grasp of business, he is currently studying MBA at University of Tehran.
Host: What’s your role as the senior legal specialist in Divar?
Ehsan: As a senior legal specialist in Divar, I worked in a team in close cooperation with the company's senior management. The team handles day-to-day legal issues, mainly focusing on drafting contracts. To put it simply, my rules and responsibilities drop into six categories which include:
Supporting other teams in negotiations, legal wise of course,
Ensuring that sufficient and proper legal terms are applied in the contract,
Understanding a stakeholder’s requirement in a project and preparing agreement accordingly,
Overview of the contract execution process,
Preparing legal reports for presentation to CEO and board members,
Preparing legal documents terms and conditions of the product, Service Level Agreements (SLA) and,
Host: Tell us about a complex legal issue you worked on. Describe the complexity and tell us how you approached it.
Ehsan: My hands are a little tight to answer that question because of the NDA, as you're aware of, but from a general point of view, if I want to pinpoint one issue, I can say the complexity and challenging issues in the start-up ecosystem in Iran is regulations. Most start-ups step in their area that there's no regulation in it. I can give you tons of examples regarding that from online taxi to cryptocurrencies. How do we approach it? How do I approach it? The first step is benchmarking. We review other countries. How they treat those issues? How do they address those issues? And we review their regulations. Then after this part, after benchmarking is complete, we review existing regulations and laws. What Iran law has regarding those issues? Then we try to reconcile the current laws and regulations to that area. And finally, we try to propose a draft regulation to the competent authorities to pass it. To be fair, the approach of the Iranian government has been improved, and they are becoming very supportive in this area. I can give you an example regarding this. The Iranian Stock Exchange Organization recently passed the Sandbox Regulation for the fintech area. With this regulation, you can test your idea in the sandbox environment, and if it's successful, you can negotiate with the government to draft the necessary code in that area.
Host: Why do in-house lawyers need to have business sense? Do they really need that for working as an in-house lawyer?
Ehsan: That's an excellent question. To answer that, let's first talk about what business sense is. The Cambridge dictionary defines it as “understanding of the ways in which business works successfully” so this definition shows how important the business sense is. There is always a gap between the owner of the business views and expectations and lawyers' understanding of the business. The in-house lawyer should try to remove that gap; they should delete it. When negotiation is in process, or a contract needs to be drafted, or a framework or terms and conditions for a product needs to be prepared, the in-house lawyer's first step is to understand what this product and what the service is. What's stakeholder wants from the customers. So, the in-house lawyer needs to be a businessman first and then a lawyer. The in-house lawyer needs to have in-depth knowledge of the product and services, vision and mission of the company, business model of the product, and the company. It's a fair question to ask how to gain and learn such a skill. To understand such a skill, you need to know the business inside out. For example, if you want to draft the contract for digital marketing, you need to know what the CPC contract is. what the cost per click contract is. It would help if you talked to your co-workers. You need to understand what they want, what they do in digital marketing, how they interface with legal issues, understand the business model. And when you gain such skill and such ability, you will understand the requirement of the business owner perfectly. I just read the article regarding this, and the author perfectly said that “it's important to speak to the business in the language of the business”.
Host: In the era of legal technology, how ready is the Iranian start-up & legal ecosystem to use such technology?
Ehsan: Considering the evolution of industries and maturity of the digital era and the Covid-19 situation that we all are dealing with, the tendency of businesses in Iran to use technology-based solutions is increasing, of course, and the legal system in Iran is no exception. Solutions such as digital signature, online identity validations, and smart contracts in the blockchain are trending globally and in Iran. The start-ups' ecosystem in Iran is keener to use such legal technology for their product as they are more secure and agiler. But the country's regulation system has not evolved as fast as the business needs to. I think it's bound to happen sooner or later. Maybe in the near future, we are going to live in Metaverse, and when a community is formed, you need laws and regulations for that community to avoid chaos. The smart contracts are already being made in the blockchain, and maybe in the future, you will need to be present in the court in Metaverse. Probably you heard that the first marriage happened in Metaverse recently, and two people got married in Metaverse. So, the need, the technology, and the willingness already existed, so you cannot close your eyes on it. The government should get adopt to it.
Host: What’s the role of an in-house lawyer in the life cycle of a product?
Ehsan: If we break the product life cycle into four steps: start-up level or forming the idea, the growth period, maturity, and finally failure or decline, which may happen. In each step, the in-house lawyer can play specific and essential rules. In the forming area, from the beginning of the stage and from the time an idea is formed, you need a legal consultancy to consider legislative condition of the country and figure out of alignment of regulation with your idea. It would be best if you recognized gaps and obstacles. Adopt your idea to the situation if required. Then when you want to launch your product/services, the stage that your idea is not only a “what-if idea” and you are ready to launch, you need to raise funds. You need to negotiate with VCs (venture capitals) and angel investors. You need an investment contract. There are lots of questions raised at this stage. How much money do you need? What are the exit plans? What are the rules and responsibility of co-founders? After this stage in the growth period, your product will quickly engage into a large market of customers. You need a contract at this stage. Conflict management plays a key role here and may boost your business if it's in the correct way. It helps you to prevent future litigation. The next step is maturity. When you pass the growth level, and the business is getting matured, the legal needs reach maturity and become a day-to-day need. You will need more contract negotiation in marketing, NDAs, NCAs, data sharing, IPs; the legal concern comes up from board members, as does the creation of the policies and workflows inside the company, as well as the creation of the policies and workflows the compliance and regulation inside the companies. A company is like a baby, it's need caring. You need regulation and compliance for the company to run it smoothly. And the final stage, that maybe you face, is failure. It happens at a good rate, actually. At this stage, you need to close your business. The in-house lawyer can help you to fill out the necessary documents. By legally dissolving your business, you prevent future challenges and even responsibility. The in-house lawyer should help you to cancel all the licenses and permits that you already gained.
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