Sophia Contreras Schwartz became Nextdoor Holding Inc.’s general counsel in May after more than five years overseeing increasingly larger portions of the social network’s legal operations, including its journey to becoming a public company in late 2021. Contreras Schwartz, a California native, joined Nextdoor after a career as a law firm associate and partner, focused on mergers and intellectual property law.
Schwartz’s promotion to general counsel came amid a period of senior leadership changes at the tech company earlier this year. In February, Nextdoor announced that co-founder and former chief executive Nirav Tolia was returning as CEO, replacing Sarah Friar in the second quarter after her five years as chief executive. Nextdoor also added three new directors to its board in May, including former Yahoo Inc. CEO Marissa Mayer, a month after an internal restructuring saw about 40 job cuts.
Nextdoor became publicly traded in November 2021 through a special purpose acquisition company (SPAC) sponsored by Khosla Ventures, the prominent Silicon Valley venture capital firm. It raised $674 million in the offering.
Editor’s note: This conversation has been edited for clarity and length.
LEGAL DIVE: Tell me a little about your career progression at Nextdoor.
SOPHIA CONTRERAS SCHWARTZ: As you can imagine, there's been a lot of really fun stuff that I've gotten to work on in the time that I was a second legal hire. And so I've had the pleasure of being involved in advancing and building out the legal function. I started as senior corporate counsel, and I've moved from that role in the last five and a half years to deputy GC and now GC.
| Role: General Counsel, Nextdoor Holdings Inc. |
|---|
| Prior: Donahue Fitzgerald LLP |
| Education: BA, UC-Berkeley; JD, UC Law San Francisco |
My legal role hasn't changed much between where I was before and where I am now. I've been the functional leader of legal for quite some time, and it's been cool to build out all the major legal tenets of the legal function, from commercial to corporate to employment, then bringing in product and building out our privacy function and working on litigation that comes up and IP issues. So, my team spans all of the major legal areas that you would imagine. So for me now, sitting in the GC role, I have a unique perspective having been at the company for such a long time and playing a huge part in building out the function as we’ve grown as a company.
Now that you’re in the GC role, is there anything you want to change, or already have changed?
No. My primary goal remains the same as it has been. I want my team to provide excellent, world-class legal counsel to the company and align our legal strategies with the objectives of the company. It's an exciting time at Nextdoor. We're going through a pivotal transition, bringing on Nirav Tolia as our CEO. He was the co-founder and prior CEO. So, he has a really unique perspective, having been at the company from the beginning, and then having an opportunity to step away and see it from the outside. Our objective as a company is unchanged. We want to be the definitive consumer internet for local, and my team is there to be a collaborative partner and help the business achieve that objective. So, as time has gone on, we've grown the team, and we continue to refine our legal chops and get up to speed on new issues.
Having a new CEO, especially one that's not just a founder, but intimately aware of how the company works, how is that going to change your role in terms of litigation or the approach that he wants to take versus the prior CEO?
I don't see a change in the overall picture for Nextdoor. Our mission has been the same from the beginning. We are customer obsessed. We want to connect neighbors to their local ecosystem, and at the same time provide value to advertisers, who we also see as a key stakeholder in that local ecosystem. And so, he obviously has new ideas, and he has a very product-centric vision, and I'm excited to work alongside him to implement that vision. But at the end of the day, the main goal is the same.
Nextdoor has talked about a role for predictive and generative AI within many of its products. Do you think that also applies in the legal department as far as the work your team's doing? Have you looked at those tools, and are they helpful?
First, I think it’s helpful to talk about how we as a company use AI. It's been an integral part of the platform for a long time, but obviously there's a lot of new developments in that field, and we have taken the opportunity to bring generative AI into the neighborhood. We're using it in a couple of ways.
On our neighbor side, we're using it to help our neighbors create more engaging content and also to keep conversations more civil, so we've embedded it into our kindness reminder, and we've seen a lot of awesome results from that. I think we have 36% or so of users exposed to that kindness reminder actually using it. And then on the customer side, we're leveraging it, not only via the kindness reminder, which creates a brand-safe environment for our advertisers, but we also have started using it in ad copy. So basically making our goal of reducing advertiser effort, we're using generative AI to do that.
On the legal front, there are a lot of interesting ways we can leverage AI to reduce our effort as lawyers, but I don't think it is a replacement for having a real person in the room looking at issues and thinking about things. The way I like to use it is really as a starting point. So, if I'm staring at a blank page and I need to organize my thoughts, it's a wonderful tool to help do that. The other way I like to use it is in data analysis. That can be really helpful. And if you have a bunch of notes on something and you want to synthesize them quickly, ChatGPT is an awesome way to do that. Again, you still need a real brain looking at it and going, “OK, does this make sense?” And asking the questions that the computer can't ask for you.
What's been the biggest challenge that you’ve found in having a legal career?
I think it was making the switch from being a firm attorney to going in-house. I did the classic: Internship during law school, get my offer, graduate, take the bar, start at my firm, go from being an associate to a partner — seeing my life laid out in front of me. And when I got the opportunity to go to Nextdoor, I had to ask a lot of hard questions of myself, like, you're going into the unknown. You know, you can see one path here and you have it all laid out like this. The other path is really unclear. But I was super excited for the opportunity to work in a company that had so much potential, that had a mission and purpose that I could align myself with and that has an application that I use personally. That was really important to me.
I do remember my very first day at the job, hearing all these acronyms, like, WAU (weekly average users) and going, “What have I done?” I will never understand. There are all of these engineers and product people and I don’t know what they're talking about. How do I be a lawyer in this situation? Because I was used to being around attorneys full-time, every day. You all talk the same talk and understand the same things. That transition was a big challenge, but also really exciting. I think being in-house for me is so much more fulfilling in my job, because I get to be a part of the company on a daily basis. I get to see things from start to finish. It can be challenging in different ways than being an outside attorney, but also a lot more rewarding.
How much do you use outside counsel versus in-house?
We use outside counsel in ways that you may expect from a public company. We have a corporate counsel. We use them for litigation. I think both types of attorneys play a critical role. For in-house counsel, we are integrated in the company. We have a deep understanding of the business so we can provide legal advice that's closely aligned to business objectives, and we're there so we can be proactive and identify issues ahead of them coming up. And we're more cost efficient, even though we're a cost center — as my finance team likes to remind me. At least we don't bill $2,000 an hour and we can provide real-time advice.
One of my biggest relationships is with our outside corporate counsel who works hand-in-hand with us on our Securities and Exchange Commission reporting and all that public company stuff. You have litigation, you have M&A. We're a lean team. We don't staff that in-house. And then outside counsel can also give that objective perspective that can be hard for us to give. So, I think my team does a great job at being impartial, but then you have the pull of the business. Much more biased. Like I said, we're small. So outside counsel can help. We can leverage them on the resource side. If we have something really big going on, we'll use them to help us push that forward. So it's an important relationship and I really value it and I have great relationships with my outside counsel. I also love that I don't have to talk to them every day.
In terms of that transition you made from outside to in-house, what would you say to a lawyer considering that jump? What are the main issues you think are important to consider before you leave a firm?
I think that it's important for people to stay curious and not be scared of the unknown. Like I said, my first day on the job, I was like, “Oh god, I've made this horrible mistake. I don't know what WAU is. I don't speak that talk.” But guess what? I just dug in. I wasn't afraid to ask questions. I'm the one who will be in a meeting that says, “I don't understand how that technology works. Can you explain it to me?” And no one has ever said, “Oh god, I can't believe she asked that question.” Because guess what? If I don't know, there's probably someone else in the room who also doesn't know, right?
So, it’s important to just be curious, ask questions and not be afraid to try new things. I came in having a solid background in corporate transactions, lots of M&A in my background, and now as a GC, I'm dangerous in the sense that I know a little bit about a lot of things. But I've had to learn.
I'm working on my team, developing them and expanding their scope, and getting them outside of their comfort zone, and encouraging them to take on new stuff.
Sophia Contreras Schwartz
General Counsel, Nextdoor
And I think that also opens up a lot of opportunities for them as they advance in their careers. One thing that moved me into in-house was that I didn't necessarily want to be an expert in one thing and be the person who knows everything about indemnification provisions. There’s more to law than that. There's more to my work life than that.
What are some of the things that people in your GC role are thinking about now? What are some topics beyond AI that you think are emerging?
I think it depends on the type of company you're at. Not all companies have the same types of issues. One thing that has really come out of the last few years for me has been how we work. There's a lot of discussion around dispersed workforces, and it's hard to manage people in different states and different countries. There are a lot of considerations there. It's all exciting when you think about it from an individual standpoint, but it adds a lot of administrative work and a lot of questions from an internet platform perspective.
There are some basic things that we're all thinking about. It's content moderation. There are a lot of platform laws being proposed across the world, and a lot of them around children's safety, if you think about TikTok and that sort of thing. So, in the U.S. there are a lot of rules around children's safety in the media. In Europe and the UK, you're looking at a lot of privacy things. In the U.S., I think we're up to around 20 state laws that have been proposed on privacy. We have a committed regulatory compliance team that monitors the space and keeps us apprised of developments in that platform law area across the world. It certainly keeps us on our toes and it's also interesting just to see how different jurisdictions are dealing with different things.
Editor’s note. A previous version of this interview quoted Contreras Schwartz referring to identification practices. It’s been updated to refer to indeminification practices.
