Theranos Headquarters. Jason Doiy / The Recorder

It's a new year and a new career for former Theranos Inc. general counsel and chief executive officer David Taylor.

On Jan. 1, Taylor launched a website for his new crisis management firm, Taylor Strategic. The San Mateo, California-based firm, which currently consists of only Taylor, will “help companies … that have real potential but also have real challenges,” he said.

“I loved the experience at Theranos. So despite all the headlines, dealing with thorny issues that really matter to the company, it's exciting, it's challenging, and there's sort of an adrenaline to it that I would love to continue,” Taylor said.

Taylor got hands-on experience with corporate crises at Theranos. The blood testing startup was in the middle of one of Silicon Valley's biggest scandals when he joined, following reports from the Wall Street Journal that it usually didn't use its own lab to test blood samples and that its technology, when used, was often inaccurate.

Taylor started as senior litigation counsel and acting general counsel in May 2016, after predecessor Heather King returned to Boies Schiller Flexner as partner. He officially became GC in December 2016, his first in-house role. The company had seven active in-house counsel at the time.

Prior to joining Theranos, Taylor was an associate at Munger, Tolles & Olson.

“I had led teams in private practice, but not teams this large and not with stakes probably this high. I certainly learned from that. I think I learned that communication is critical,” he said. “Things move quickly in a crisis, and so keeping all team members abreast of the facts as they happen, so they're all working in coordination, is critical. When that doesn't happen it shows.”

Taylor also said his definition of “winning” a legal battle changed while in the GC role to seeking settlements rather than resorting to high-cost litigation.

Under Taylor, Theranos reached its global settlement agreement with the Centers for Medicare and Medicaid Services. The federal agency withdrew its revocation of Theranos' Clinical Laboratory Improvement Amendments operating certificates and reduced the monetary penalty to $30,000, with a promise the company wouldn't own or operate a clinic laboratory until 2019.

Theranos also settled with Arizona Attorney General's Office while Taylor was GC. The company agreed to reimburse state residents who paid for Theranos blood-testing services between 2013 and 2016, for a total of approximately $4.65 million. In March 2018, Theranos and founder Elizabeth Holmes settled charges of massive fraud with the U.S. Securities and Exchange Commission.

“A settlement that cuts the cost of litigation and extinguishes exposure and leaves you with enough resources to fight another day is a wonderful thing as in-house counsel,” Taylor said. “I can recall as outside counsel in litigation often feeling kind of disappointed and not satisfied with a settlement, because we're here, we want to take this case all the way, we want to win.”

In June 2018, Taylor was appointed CEO, a role that provided him an even broader view of the business. Three months later he announced the company would dissolve rather than file bankruptcy.

He told stakeholders in a letter obtained by the Wall Street Journal that “no material assets would be available for distribution to creditors” if Theranos filed bankruptcy, making dissolution the best option.

“With that closing statement, I always try to place a premium on being direct and factual, and, of course, defending the company where I think it ought to be defended,” he said.

Taylor began thinking of a future in crisis management as Theranos came to an end. He spent 90 days calling people in his network and throughout the legal industry to research what he needed to launch a successful firm.

The firm will likely focus on smaller companies, including those that may not have lawyers in-house, Taylor said, and offer counsel during crises and before them. Taylor said his greatest lesson at Theranos was the importance of putting risk management systems in place before an issue turns into a full-blown crisis.

“The risk management side, the ounce of prevention side, is really, really important,” he said. “Taking the time to get your risk management system in place, on the front end. You'll reap the benefits of that…not having that in place really is costly.”