The Growth of Legal Tech Entrepreneurship

Episode Notes

Transcript

Law Technology Now

The Growth of Legal Tech Entrepreneurship

10/06/2016

Intro: You are listening to the Legal Talk Network.

[Music]

Bob Ambrogi: Hello. I am Bob Ambrogi.

Monica Bay: And I am Monica Bay.

Bob Ambrogi: We have been writing about law and technology for more than 30 years.

Monica Bay: That’s right. During that time we have witnessed many changes and innovations.

Bob Ambrogi: Technology is improving the practice of law, helping lawyers deliver their services faster and cheaper.

Monica Bay: Which benefits not only lawyers and their clients, but everyone.

Bob Ambrogi: And moves us closer to the goal of access to justice for all.

Monica Bay: Tune in every month as we explore the new legal technology and the people behind the tech.

Bob Ambrogi: Here on Law Technology Now.

[Music]

Monica Bay: Hi. I am Monica Bay. And this is a special edition of Law Technology Now. We’re going to preview the upcoming Above the Law Academy of private practice, which will be held on the 27th and 28th in Philadelphia.

We have two speakers today Gary Sangha and Joe Patrice, and all three of us are going to talk about this great program. I am going to start off by turning the mic over to Gary, tell us a little bit about yourself and how you got involved.

Gary Sangha: Sure. So just a quick background, I am a former attorney, who switched into the business side. I’m a serial legal tech entrepreneur. My first startup Intelligize started out at my apartment in `07 just to make the process of researching SEC filings a little bit easier. I just found the process incredibly tedious. Luckily for me it fretted a lot of other people and that formed a foundation for Intelligize too. I raised a couple round of venture financing, got the company to break even and long story short, I ended up being one of the most successful legal tech place of the last 10 years.

And a couple of weeks ago it just got acquired; it was bought by LexisNexis.

Monica Bay: Congratulations.

Gary Sangha: Thank you.

Monica Bay: Who retired you?

Gary Sangha: The LexisNexis Group.

Monica Bay: Ah! That seems to be a trend; congratulations, that’s absolutely great. Joe, tell us a little bit about yourself.

Joe Patrice: Yeah, so I’ve been an editor here at Above the Law for the last three-and-a-half years or so. Before that I was an attorney for various places in New York, but litigator, specializing mostly in white-collar criminal defense. But with time I got the opportunity to change my talents over to writing and I’ve been doing that here since then and I also am a fellow host of a Legal Talk Network show, Thinking like a Lawyer, which people can listen to through the same means that they listen to this.

Monica Bay: Terrific. And for those of you who might not be familiar with me, I also am a lawyer who doesn’t practice. I was at ALM as the editor-in-chief for the Law Technology News for a very long time and I’m now a fellow at Stanford in their CodeX unit and I do freelance.

So all three of us are going to be at this conference and I think we’re all equally excited about it. It’s the second year for the Above the Law’s Academy of private practice. And on our second year we’re launching something new and I’m very, very excited about it and I will be participating in it. And Gary, tell us a little bit about what we’re going to do on the Thursday session which will be held on October 27th in Philadelphia.

Gary Sangha: Sure. Well I will be the keynote speaker for the session. And again, we have a ton of great speakers. For my session, I’m going to focus really on just the latest in Legal Tech Entrepreneurship and Legal Tech Startups between my two startups; Intelligize and Lit IQ. I had tremendous amount of learnings and I just want to share with everyone the lessons I’ve learned to successes and the setbacks in order to help people out if they were to venture out and join a legal tech startup or start a legal tech startup.

Monica Bay: And that’s going to be the keynote on the Friday program, correct, the first thing in the morning on the 28th?

Gary Sangha: Correct. I am sorry, that’s the Friday not the Thursday.

Monica Bay:  But you’re also very involved on the 27th which is the preview afternoon show. Tell us more about what you’re going to talk about at the keynote, but then I’d love to have you talk about because you’ve been the organizer on the pre-conference if we would call it on Thursday.

(00:04:50)

Gary Sangha: Absolutely. So in terms of what I want to talk about, again, there’s been enough successful legal tech startups now that there are patterns that can be green from the various experiences. You know, the first thing that I’ve learned and I think people will concur it, legal tech is just a different animal than other sectors, say Fintech or Sales Tech or indefinitely Consumer Tech. Just because it’s what is a million lawyers to the big market, 300 billion, this is very, very bifurcated between small law, the Am Law 100 in-house government.

And each of these markets is very discreet and very different, which just means that it’s — on the top line it’s a big sector, once you get below the surface it becomes a lot more bespoke, right, and you need dedicated strategies to attack these sectors.  So that’s the first lesson I really learned.

The second lesson I learnt is that because selling to legal can be tedious, right, because lawyers in general purchase based on consensus. There isn’t a dedicated procurement process. Unfortunately, the sales cycle can be very challenging. And so what that means is you’re not going to get those hockey stick growth curves that you could get in other startups, which means that getting venture financing in legal tech is a challenge. As a result what you have to do is you have to get Angel Financing and you need to have a pathway to break-even very quickly.

Monica Bay: For people who might not know what Angels is, can you explain that to someone who may not be familiar with the rounds that go through?

Gary Sangha: Sure. Angel Financing is typically your first round of external funding, so typically called friends and family round. It’s the first non-institution so you don’t have the venture capital fund investing and we call them Angels because literally they come out of heaven and to give you money. So these are typically high-net-worth individuals or people that are just interested in your solutions.

So for me, for Intelligize, my initial angel investors are actually my co-workers and my firm White & Case. And for my second startup Lit IQ, it has typically been high-net-worth individuals. So again, typically individuals that are just investing their private capital.

Monica Bay: So anything else you want to tell us about the keynote in the morning on Friday, the 28th of October?

Gary Sangha: Sure. The other thing we want to emphasize, I will talk about this in the chat is that in legal tech you really have to go into realizing you have to build a legitimate business. Legal tech does not have those scenarios in other startups like Instagram or whatnot where people will buy you 7:46; it just doesn’t work that way. So the idea of flipping startups and whatnot doesn’t work out, that doesn’t happen in our sector.

In our sector you literally need to have a plan to get your company to break even and profitable and be a legit business. And if you don’t want to do that, legal tech is probably not the sector that you want to enter.

Monica Bay: So let’s shift briefly to the pre-event. There’s going to be a media training and storytelling program for an hour that starts at 4:30 and I’m very honored to be in there, and I want to turn over if we can to Joe. Can you tell us a little bit about what’s going on at the media training portion?

Joe Patrice: You know, I haven’t really spent a lot of time finding out what everybody wants to say, but I think the key to that session is going to be just — it’s a new move for us with this particular conference. So last year, as you said this is a two-year-old conference. Last year we focused a lot more on small private practice work and this year we’re doing a little bit more to expand that and it’s still about small practice, but the more areas of it, rather than just being how to get your complaint from point A to point B. We now have a broader discussion of legal technology which is what Gary is bringing here. We also are bringing in this kind of media training discussion to go into different perspectives of people who like you being on this panel, people who have different perspectives on telling the story of law and telling your firm get your firm name out there, get — know what’s happening in the industry et cetera. So we’re going to have a broad-based discussion of how to kind of deal with media.

Monica Bay: I think that’s really, really important and ironically especially for the folks who are doing startups in addition to lawyers who are just going up the ladder there, because in my experience I found that when vendors use lots of jargon, solution this, and words that lawyers don’t understand, they just get completely turned off and it becomes a moat rather than a bridge. So I spend a lot of my time really focusing on using plain English so that everyone can understand and I think that’s an important tool for media training, because you just never know who your user is going to be. But anything more you want to say on the media training.

(00:10:14)

Joe Patrice: On that specifically no. I just thought that it’s worth adding a discussion of just kind of where we think we are, just generally. And I mean that’s one component of it. As I said we’re doing a lot of discussion about how legal tech operates, we’re doing some talk and training for people who are in small practices on how to manage their practice, how to select products that can maximize what they’re doing.

A couple weeks ago I heard Melanie Heller from Bloomberg Law, actually made a statement that I thought kind of rang true for me, which was that this is the best time to ever be a small firm. And the reason for that of course is that there’s now these products that can help you actually succeed.

Monica Bay: I absolutely agree with you on that and I’m sure Gary you do too, because now you can, in fact, I think a lot of the problems facing Big Law is that they can’t act like a small firm and that they need to act like small firms and the electrical and wonderful things that are coming out of technology is really dramatically changing. And I think a lot of people are actually leaving Big Law to do startups because they don’t have to be in a big place with tons and tons of people, they can use even the most basic tools like a phone, you can work from anywhere.

I’m looking at our upcoming panel and there are some sessions that are going to be general sessions. One of them is a level playing field, how do boutiques compete, exactly what we’re talking about now, but there’s also workshops that are going to be offered. And again, if I can turn to you Joe, what can you tell our listeners what they might expect in some of the various programs that are going to be on, on the main program on Friday.

Joe Patrice: Sure. So after Gary’s initial speech we have some general session where we’re going to have Andrew Dick, Carolyn Elefant, Gaston Group, they’re going to come out and speak about leveling the playing field, literally how boutiques can compete in this world where there are these big players, these mid-sized players and increasingly these kind of uber players who are out there helping take business and how you can utilize technology and different structures to compete in that world, kind of exactly on the point that we were talking about a second ago.

As time goes on we’re going to look at some specific technologies, how to write contracts well, how to choose like a practice management platform, those are going to be our later training sessions that can help out. I am going to have a couple of workshops to talk about just legal tech generally. We’re also going to have one that talks about LegalZoom, speaking of the ubers of the legal industry and how to deal with that 800 pound gorilla in the room? How do you not necessarily — how do you beat them, but how do you work with them, use them to enhance your own practice?

Monica Bay: And I think you just hit the nail with using the biggest secret that no one seems to realize is that LegalZoom Rocket Lawyer, Avvo and I’m probably missing someone on this, they’re not just helping the folks who don’t know that 80% of Americans who neither know how to find a lawyer or afford a lawyer, but actually the dirty little secret is that the lawyers themselves are going to benefit because a lot of these solo practitioners and small firm practitioners, they will come right out and say I can’t even afford my own rates on things. And for them to be able to build their practices by starting folks on that and if the folks who are using it become comfortable with it, that can grow both, the folks who are the clients are going to get good lawyering and the lawyers themselves are going to expand and build their practices.

So I’ve been a huge promoter of those folks from a very long time and I’m really excited about that panel. I think its Dan Lear from Avvo is just incredible. And I think I’ve also heard Chad and he’s really, really good too. Any other thoughts from either one of you on the workshops?

Joe Patrice: No, I was just going to follow up on the Chad point. I actually the most recent episode of my podcast I co-hosted with him, so it was, yeah, it was a lot of fun.

Monica Bay: And Larry Port is one of the funniest people in the world. He wrote an article while I was at ALM; that is my all-time favorite, I should probably print it out

and bring it to people. Joe, tell us a little bit about the afternoon programs.

Joe Patrice: Oh yeah, just more along the lines of these workshops, we now move in the afternoon, we’re going to have some choices between learning about well, what we’re doing right here, learning about how podcasts can be used to help out a practice. Some firms aren’t yet in that space, but it’s a growing way in which people get information, and a good way to market who you are. Some firms aren’t yet in that space, but it’s a growing way in which people get information, and a good way to market who you are.

(00:15:11)

We talk about — again, I have already kind of previewed the practice management platform, which is an essential decision in any small firm what you are going to do for your practice management.

We have Bob Ambrogi walking us through what to do, what’s out there, what you need, what might not be necessary for you when it comes to your practice management platform.

We also have a panel on getting paid and how you get your fees paid, which is somewhat important I would suppose as a lawyer, if you are trying to eat. And then we have a general session about cyber security in the cloud, which is obviously on everyone’s mind in a world of hacking, how do you protect yourself, how do you protect your clients in a world where people are out there trying to get that data.

Monica Bay: Gary, any last words from you, we will wrap it up pretty quickly. Tell us a little bit about how folks might be able to attend the Friday session?

Gary Sangha: Sure. So you can just go to  HYPERLINK “http://www.events.abovethelaw.com/app” events.abovethelaw.com/app and you can take a look at the agenda and you can register there as well.

And I just want to, again, follow up on what both of you guys have been talking about, where frankly technology has really democratized the practice of the law. It used to be you had to go to big firms because they had — they were the only ones with that type of knowledge, and now with all these great software products that can do some of the work for you, show you what’s market, it’s really, again, that information is no longer the purview of these elite handful of firms anymore. And I think that’s probably one of the most disruptive things to happen to the legal services sector over the last ten years.

Monica Bay: Joe, how about you, what’s your —

Joe Patrice: Well, the one other thing I would say is, which doesn’t relate directly to any of the content, but last year we did this in New York City; this year we are taking it on the road and going to Philadelphia. And I think the argument for that was to start, in the spirit of democratizing to start moving this to places around the country where small practitioners are that aren’t necessarily just New York City, where we are based, and putting this out there for more people to consume.

Monica Bay: And the Thursday program will start at 4:30, it’s going to be held at the University of Pennsylvania’s Law School at Geddes Hall, did I pronounce that right, Gary?

Gary Sangha: I did not go to Penn.

Monica Bay: And the address there is 3501 Sansom Street, Philadelphia. If you want the ZIP Code it’s 19104. And on Friday, October 28, it will be at the Monaco Hotel, also in Philly. It’s going to be an exciting event. I went last year for the first one and was just blown away at how good it was.

So once again to give you the address, it’s  HYPERLINK “http://www.events.abovethelaw.com/app” events.abovethelaw.com/app. It will give you the agenda, the speakers, the advisory board, sponsors, venue, contact and register. So everything is right there at  HYPERLINK “http://www.events.abovethelaw.com/app” events.abovethelaw.com/app.

So I really want to thank the two wonderful guests today, Joe Patrice and Gary Sangha for joining me today on this special edition of Law Technology Now and we hope to see all of you in Philly.

I am Monica Bay. We will see you next time.

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