How Do You Develop Institutional Maturity?

Veteran counsel Lenny Stein recently stepped into the top job at Splunk. Before landing at the software producer, he handled Overture’s sale to Yahoo, the merger of Preview Travel with Travelocity, and the sale of Buzzsaw to Autodesk. He brings that experience to bear as he builds institutional maturity in the legal department of a still-young company.

Institutional maturity is a journey—not a destination. Process, training, and counseling must evolve with a company as it grows.

Despite the dramatic growth of Splunk’s international business, it still comprises only 25 percent of our total business. Quite frankly, it has had a hard time growing its share because our US business continues to grow so rapidly. We are becoming the go-to, next-generation security solution for government agencies, universities, and businesses of all sizes. We help organizations run their data centers, networks, applications, and devices more efficiently. We’re now increasingly helping organizations gain real-time insight into massive quantities of data to help them provide more value to their customers.

To support continuing rapid growth, it is critical to put in place efficient, repeatable processes that assure compliance with laws, prudent management of enterprise risk, ease of execution, and fulfillment of customer expectations and legal commitments. Our senior management provides a strong tone from the top: that we will win based on the quality of our products, the integrity of our employees, and our adherence to the highest standards of legal and ethical conduct.

We consistently look several years ahead as we consider the appropriate level of controls and institutional maturity. For example, even when we were a private company, we held ourselves to public company standards. We instituted comprehensive policies, contract provisions, due diligence, technological controls, and training to assure compliance with international anticorruption and export control laws long before most companies did so.

We continuously revisit and improve those programs as we grow. We spend a lot of time thinking about how we secure customer data and our products against the new world of advanced persistent threats. We put in place contract management software early on to ensure we had visibility into our contracting process. We’ve built a world-class patent portfolio of more than 47 issued patents and 100-plus pending patent applications in less than two years.

I’ve been fortunate to serve as both an operating executive and general counsel for private and public companies—from start-up to more than $1 billion in revenue—for an early leader in the online travel business and for the inventor of paid search on the Internet. Those experiences were not only great fun but taught me the importance of a proactive, nimble legal function to manage risk while helping to accelerate the growth of the business.

Focus on hiring the best attorneys who live your mantra; ours is: “Work hard, have fun, and make history.” Splunk is filled with smart people running full speed to capture an enormous market opportunity that also promises great social good. At the same time, it’s important to bring in professionals with expertise in critical domains, such as securities law, licensing, product, privacy, and intellectual property. Hire great people, point them in the right direction, and get out of the way. Be there always as a mentor, sounding board, and unqualified supporter. Trust and verify.