Q&A with an OC Ventures Lawyer: Rhiannon Jones, Associate Director in our Incentives practice

Adam Turner, one of OC Venture's senior corporate lawyers, sat down with Rhiannon Jones, an Associate Director in our Incentives practice, to get an inside view of her work for venture capital-backed clients.

What drew you to Osborne Clarke  as a law firm to work at?

Where to start? Osborne Clarke is a great place to work. We're lucky enough to have exciting clients, a wide variety of work types and some amazing people to work with and learn from. I've made some wonderful friends here. It's also got a great café.

What led you to specialise as a lawyer in employment incentives?

I led a secret life as a wills and probate lawyer for 12 months when I first qualified. I then decided to relocate to Bristol from the Midlands – which some people think is the North! – and that was when I saw an opportunity to be an incentives lawyer at Osborne Clarke. I never in a million years thought I'd get the role as it was different to my previous experience, but I was lucky enough to get the opportunity. 

For me, it's a brilliant area of law as it's all about finding ways to reward and incentivise people, which, in turn, helps companies to grow.
 

What are the most common issues or challenges you encounter with VC-backed clients?  

The most common challenge we encounter is companies not fully understanding how to operate their employee incentive arrangements or being aware of their ongoing filing obligations. This is so important for companies as certain incentive arrangements offer tax advantages to both the employees and the company and it's, therefore, vital to comply with the legislation to maintain these tax advantages. It's an area that often goes wrong and it can be tricky (if at all possible) to fix at a later date – it's definitely worth getting advice and support from the outset to get these things right!

Employee incentive arrangements for VC-backed companies typically also have very generous leaver provisions. This can be necessary to ensure that the company is able to recruit the best talent but it can sometimes make it tricky to retain employees as they still get to keep the option or award even if they leave – it often means companies can end up with lots of former employees holding options or shares and a complex cap table!

What tips would  you give to VC-backed companies that are considering their employee incentives arrangements?

My three top tips would be to make sure: you have designed a scheme that meets the company's commercial objectives; you understand how the scheme operates and the processes to follow in order to grant options and make awards to employees; and you are aware of any ongoing company filing obligations once a scheme has been set up. 

It's so important to get these things right, particularly for VC-backed companies where the employee incentive arrangements could, in time, deliver significant growth. It's definitely worth spending the time getting this right from the outset.

Are there any upcoming changes to regulation in your area that you have an eye on? 

With the upcoming election, we're waiting to see what impact, if any, the result will have on tax-advantaged share schemes.

The start of this current tax year brought changes for enterprise management incentives (EMI) options and companies now have until 6 July following the tax year in which EMI options were granted to notify HMRC (that is, aligning the notification deadline with the annual return filing deadline). While this is helpful for companies to have a longer period to notify the grant of EMI options, we'd still recommend that it is completed as soon as possible.