Silicon Valley technology firm Venture Law Group (VLG) has been forced to make a capital call to pay its way out of a property lease
As revealed in The Lawyer (14 October), VLG closed its San Francisco office, which was being occupied by just 12 lawyers despite having space for 40. VLG asked each of its 25 directors for money to buy out the 10-year lease, due to the lack of demand for commercial real estate on the West Coast. It is understood that the directors were each asked to stump up $100,000 (£64,500) from an equity pool that holds VLG's shares in start-up companies. Sources indicate that the majority of the $3m (£1.9m) raised through the sale of shares in internet payment group PayPal was used to pay off the lease. VLG, unlike traditional law firms that have a pool of equity into which lawyers invest on reaching partnership, uses revenues to pay for the day-to-day running of the practice. In this case, the firm opted for a capital call due to the immediacy of the problem. Donald Keller, a director at VLG, said: "We could have used the revenues, but we decided to fund it because we have an available pool of capital."