Snap Inc., the parent company of popular social media platform Snapchat, has made considerable expenditures on legal fees in recent years. According to a recent report, it paid a total of $15 million to three outside law firms, Munger, Tolles & Olson, Gibson, Dunn & Crutcher, and Akin Gump Strauss Hauer & Feld. This significant outflow underscores the growing complexities that tech companies, like Snap, face in various operational and regulatory landscapes.
In a notable reflection of this growing legal expenditure, Snap’s General Counsel, Michael O’Sullivan saw his total compensation more than double to almost $9.4 million in 2023, up from $4.6 million in 2022, according to a 10-K filing made by Snap. The package included a stock award valued at nearly $8.5 million in addition to a base salary of around $855,800 and $24,300 in additional benefits.
A detail that deserves attention is that Munger Tolles received $12 million from Snap, a firm where the father of Snap’s co-founder and CEO, Evan Spiegel, is a partner. Furthermore, Gibson, Dunn & Crutcher, another firm tied to the Spiegel family through Debra Wong Yang, a partner and member of the firm’s executive committee who is also Evan Spiegel’s stepmother, received $2.9 million.
The remaining of the $15 million went to Akin Gump Strauss Hauer & Feld, which Snap paid $130,000 to lobby on its behalf at the federal level on issues related to online safety and privacy. Meanwhile, the public strategies department of Cozen O’Connor also received a similar amount from Snap for its advocacy on healthcare matters.
Snap, like many of its tech and social media counterparts, has had to navigate through several disruptions including layoffs and lawsuits. In January, Snap faced a setback when it failed to shield itself against a lawsuit accusing it of facilitating the sale of fentanyl-laced drugs.
The recent financial records and developments signify an unmistakable trend: the legal landscape is becoming an increasingly critical concern for tech companies. The numbers don’t lie; navigating legal complexities and managing risks requires greater resources than ever before.