Why a senior partner at elite law firm Paul Hastings jumped ship to become a VC

• Tom Brown, a former senior partner at Paul Hastings, joined the fintech VC firm Nyca Partners.
• Brown’s entire legal career has revolved around the financial-services industry.
• Despite a pay cut, Brown said, the career shift is worth it.

Tom Brown, a senior partner at the elite law firm Paul Hastings, has jumped to the fintech VC firm Nyca Partners. In Big Law, where equity partnership is traditionally deemed a job for life, a move like Brown’s is fairly uncommon.

The pivot from law to VC comes with a trade-off: money.

“My cash comp is not increasing as a result of this transition, but my wife and I are incredibly fortunate to be in a position to absorb any decrease in cash compensation and focus on the potentially longer-term opportunities,” Brown told Insider in an exclusive interview. He and his wife began making angel investments at fintech companies a decade ago.

Brown, who advised fintechs like Chime and Albert while at Paul Hastings, spent his entire career steeped in the financial-services industry: He defended Visa against antitrust suits and other matters as its general counsel for two years in 2004 before returning to Big Law at O’Melveny & Myers in 2006. Brown also taught a class on modern consumer payments to law students at the University of California.

Brown is keeping one foot in law and the other in fintech

Brown isn’t leaving law entirely. He intends to “keep a foot in both worlds” of law and tech, serving as a fintech and policy advisor at Paul Hastings and an editorial board member of the American Bar Association’s antitrust law journal, he told Insider.

“Fintech’s business environment specifically brings together consumers, merchants, traditional banks, non-banks,” Brown said. “All these different constituents bounce into each other, and there are interesting, substantive legal issues across them.”

Nyca’s portfolio includes fintechs like Affirm, Acorns, and Blend.

Brown said he was scaling back from “the law-firm world” because he wants to devote more time to enabling faster and more reliable financial services without being bogged down by mundane tasks.

“One thing that people don’t necessarily appreciate about life as a senior partner in a firm is the amount of time spent on administrative tasks: opening matters, clearing conflicts, getting bills out, getting them paid,” Brown said. “A lot of that work falls on partners and frankly seems like a distraction from the ability to connect and help move clients and issues forward.”

Brown hopes to use his law background as an investing tool

Brown is betting that his law-and-business expertise will be invaluable to the companies he works with as a VC.

“Small bits of legal advice delivered at the right time can support the creation of enormously valuable businesses,” Brown said, describing when he and a team of lawyers at O’Melveny, where he was at the time, advised Stripe on its decision to build its initial service around the account structure at Wells Fargo.

“Companies that made a different choice about that account structure ultimately went out of business because of regulatory questions, whereas Stripe survived and thrived,” Brown said. “And the conversation that crystallized that decision probably took 15 to 30 minutes — which for the law firm would’ve made just 250 bucks.”

The ambiguity around shifting fintech regulations means greener fields for law and business.

For example, buy-now-pay-later companies like Klarna and Afterpay have been able to use certain favorable definitions of a loan — which vary under state and federal laws — to “create business opportunities” and ultimately “build a multibillion-dollar industry,” Brown said.