Fails and Sales: Lessons in Legal Entrepreneur from Gary Sangha

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Transcript

Law Technology Now

Fails and Sales: Lessons in Legal Entrepreneur from Gary Sangha

11/04/2016

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Monica Bay: And I am Monica Bay.

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Monica Bay: Hi. I am Monica Bay and I am here with some amazing people. We are at the Above The Law’s new Academy for Private Practice. We are in Philadelphia. This is the second program that they have done.

Adam Camras is here with me today. Thank you very much for being here. It’s so much fun when you have the big boss here. And we just finished the keynote speech that was done by Gary Sangha, also a CodeX Fellow, so yay Stanford. It was absolutely amazing and I have dragged him over to — force him to basically say it all over again.

So I am going to put the microphone to you and have you start with number one, but first tell us what you told us about why it was a miracle that you got this.

Gary Sangha: Sure. So as a bit of a background, I am a former securities lawyer turned serial entrepreneur. I have been told I am one of the few serial legal tech entrepreneurs that are out there.

And I will just talk about my story and a bit of a background. My first startup Intelligize, which helps with SEC filings, ended up being a pretty big success. We had 50% year-over-year growth every year. We sold to most of the Am Law 100. I did a significant portion of that selling. We even sold to the SEC. So it was a fantastic experience, and Intelligize was recently acquired by LexisNexis and a fantastic journey as well.

So it sounds great, but I really should have failed. The secret is that if you look at the qualities that make a great entrepreneur, I lacked every one of them. I had no business experience to start with. As a lawyer I saw danger everywhere you look, which is not a good skill set to have when you are taking these types of risks.

I am an extreme introvert, very uncomfortable with public speaking and sales, and to top it off I am Canadian, didn’t even have a work visa in the US.

The sector I entered, SEC filings, was super mature, Thomson Reuters, the 800-pound gorilla had a 100% share, and my timing was perfectly terrible. We launched it at the start of the financial crisis. Yet, we succeeded because I made every mistake in the book, but luckily for me I learned from them, and the talk consists of just the lessons I learned from the trenches.

Monica Bay: And before we go into number one, tell us a little bit more about your background. I know, as I have already bragged, that we are both at Stanford, but what other things are you doing with the law school here?

Gary Sangha: Sure. I teach at the University of Pennsylvania Law School, I teach Business Law, and the class I nicknamed How Not to Get Screwed over in Business is the nickname for my class. I am involved with Stanford CodeX, that’s where I do my research. I think Stanford CodeX is one of the premier legal tech think tanks in the world, so just a great center for legal innovation. I am also the CEO of Lit IQ, which is my second startup.

Monica Bay: Congratulations. So start with number one about sales.

Gary Sangha: I think what I mentioned is that life is sales and sales is marketing — sales is life rather. I just can’t emphasize enough the importance of sales. I think that people in the legal services sector have a pejorative opinion of sales. They think it’s somewhat less than noble. And what I wanted to emphasize is there is a difference between a snake oil salesman and someone that’s trying to offer value and trying to get a client or a customer there. Because the default is people are skeptical and you need to get them there, and offering value is not a bad thing.

The beauty of sales in my opinion is that you can learn it. It’s not something that’s innate. Some of the quick pointers I wanted to emphasize in today’s chat was one, building rapport is important, and to build rapport you have to find commonalities. Surprisingly, one of the best places to find commonalities is right in the beginning when you are doing the small talk. Small talk is critical. I have found that 9 out of 10 times that’s when you build rapport, that’s when you find commonalities.

(00:05:04)

And again, do your homework, find out what school they went to. Look, at the end of the day everyone has family, you can always talk about family, and if that doesn’t work, you can always talk about the weather.

Monica Bay: Adam.

Adam Camras: I found this really interesting on a number of fronts. You are definitely right in terms of the negative stigma when you mention the word sales to a group of legal professionals or professionals in general. As we were mentioning in the pre-dialogue for this interview, we are always selling, everybody is selling, whether it’s in your personal life with your personal interpersonal relationships, whether it’s any transaction you are experiencing, and everybody needs to understand the fundamentals of what sales are to succeed in your personal life as well as your professional. So I thought it was fantastic that you were highlighting it in the keynote presentation.

One question that I had as you were going through that, you mentioned some seminars and books or tools or authors that you had read or followed, and I know that there’s a ton out there, if you wouldn’t mind just sharing some that you have enjoyed or found benefit of consuming their content or reading their books.

Gary Sangha: Sure. Number one, ‘How to Win Friends and Influence People’. I mean, if you haven’t read that, go on Kindle. I think Kindle probably offers it free at this point. That is the Bible. I mean just in terms of building rapport and getting people to like you, that’s where it starts.

After that, Zig Ziglar is pretty good. What I personally do is I go to Amazon and I look at their sales bestsellers, and just the customer feedback, and that’s proven to be very good for me in terms of getting good quality material.

Monica Bay: One of the things that I did when I first joined CodeX and I was so terrified they were going to realize that I was a complete fraud and didn’t know anything about it, so I had a 2.5 hour commute from New York City up to my house in Connecticut, and I have become absolutely addicted to audiobooks. And to me there is nothing more wonderful to calm you down when you get off the deacon and you have someone reading a story to you.

So what I decided to do was when I started reading a couple of these I figured a lot of people, especially lawyers, are in the same boat that I was in, I am also a lawyer, so I started on the Codex blog sort of a tongue-in-cheek thing called the CodeX Book Club, Chapter 1, and I would write — like whatever book I had read I would write a paragraph thing. I had a really silly little 1-5, wonderfully it will change your life, to sucks. And I am encouraging people to participate in that, but it was a great way for me to give myself a crash course on Silicon Valley, VCs, whatever.

So I really resonate with what you are saying. Anything else on that topic or shall we move on to the next one.

Gary Sangha: The other thing I would just add is be careful with marketing. They say that half a marketing spend is valuable, you just don’t know which half. What I have found to be very, very valuable and effective is inbound marketing. What that means is content creation, create those blogs, write those articles, make public those client memos, and make sure that Google can find it. And I will tell you it’s the most effective form of marketing that I have seen.

Monica Bay: Your second point really blew me away and I really resonated to it which is, how do you handle defeat in some ways, and you use the word pivot, which is one of my favorite words now. You told us a little bit about you lost two of your employees, et cetera. Tell us how you survived that crucial period.

Gary Sangha: Sure. I think that people use the word defeat or setbacks way too often. I think that there is a difference between things taking longer than they should and defeat. There is a difference between moving up that learning curve to mastery and defeat.

So I think setbacks, defeat, the terms are just overused. It’s a process and I think people just don’t appreciate that things take longer than they should. You cannot bat a 1,000 from the get-go. So defeats, setbacks, that just means you are pushing yourself and you are learning. It’s a good thing, assuming that you learn from the defeat and setbacks.

Monica Bay: Now, during your conversation on the keynote I had one that seemed like it might be a really ambivalent one, which was saying go early, which everyone preaches and I get that. Is there a danger though when you do that that if the first iteration bombs you are dead versus tweaking and getting the value of being able to change it and listen to your folks who are giving you feedback. Where is that line thinking when is it too early?

(00:09:56)

Gary Sangha: Well, for Intelligize my iterations bombed every year for five years. Every year we’d have to go back to the law firms and they would say, no, and we kept iterating, so we bombed year after year. I think obviously there is a difference between going in front of a thousand people and unveiling your product and getting good feedback. So I am not saying, go present to the world, but I think going to your customers early and getting feedback is always a good thing. You’d be surprised at how patient the market is for your corrections.

Adam Camras: I guess putting that in the perspective of I am a solo or a small firm lawyer or an associated midsize or large firm, how would you apply those same fundamentals in terms of launching your business to or practicing lawyer, akin to garnering your first client or garnering the clients that you want for your firm or winning a case, how would that apply to the practice of law?

Gary Sangha: Sure. That means not waiting till you are a 100% there. Even if your website isn’t perfect, put it up there, even if you don’t have all that many cases under your belt put yourself out there, even if you haven’t written or reviewed at least before you can pick it up, that means pushing yourself to the boundaries of your comfort level even when you may not be there.

Monica Bay: One of the things you said in the keynote really struck me was the concept of, I maybe leaping frog a minute for here, the idea that you have to get your first endorser and I loved your suggestion of, give it to them free if you have to, because you just need that —

Gary Sangha: Logo.

Monica Bay: — logo and am I jumping there, is this a good point for you to talk about?

Gary Sangha: Absolutely. The most powerful incentivizers for lawyers to acquire a product is what I call FOMO (Fear of Missing Out). If a firm like Horváth adopts your product you are off to the races, so how do you get these great firms to make a bet on you especially when it’s early?

Again, there are several strategies between giving away of pennies on the dollar, partnering with them, there are several strategies where you may not make money off that initial customer, but getting that logo can be absolutely incredibly valuable and compelling.

Adam Camras: So I can relate to the concept that there is a lot of reasons people start and build companies and you mentioned the tech must serve a purpose, what do you mean by that?

Gary Sangha: Sure. What I mean is TechnoServe is a forced multiplier, it must let you do things on exponentially better level than you could otherwise do. Fundamentally tech can only do a handful of things, if it’s valuable. In order of priority, one, it has to help you make more money, i.e. it can get you more customers, it can help you be more productive. Two, it helps you cut costs. Cutting costs is good because it increases your profitability.

Now a lot of people say, hey Gary, were lawyers who run a cost-plus business be charged by the hour? Look, I’ve never seen anyone being worse off but be more efficient. In terms of cutting away billables I’ve never met a lawyer that’s had too much time on a particular task. I think work that we used to be spent on stuff that can now be done by technology will be spent in other higher value areas. So again, number one, it can help you make money; number two, help you cut costs; number three, help you reduce risk.

Legal services is again a field where you only get negative reinforcement, no one is going to give you a high five for that great brief, for that great contract, but you will get in trouble if you mess up.

So risk mitigation is an important facet of an attorney’s job and tech can do that. In terms of the value, that’s up for you to decide and for the company to provide.

Monica Bay: One last question from me, if you had it to do over what are the three things you might have done differently?

Gary Sangha: Sure, gosh, how do you pick three between the thousands, I would have done differently. First thing I would have done is, I would have brought in a cofounder, I would have done several academic studies where a team of two is typically has a higher rate of success than a team of one —

Monica Bay: Or three.

Gary Sangha: Or three.

Monica Bay: Three is the worst from what they said.

Gary Sangha: Absolutely. So I think if I had a cofounder I think that would have made my life a lot easier.

Two, I would have brought on mentors earlier, that would have helped me short-circuit some of the hard life lessons I learned, that I had to learn the hard way. So I really would have brought in mentors earlier.

Three, I think I just would have done a lot more preparation. I basically just jumped and I would have loved to have learned more about sales and marketing, just coding technology while I was on payroll for somebody else.

Monica Bay: Well, if you ever want a second person to go for you, a volunteer.

Gary Sangha: Deal, deal.

Monica Bay: We’re going to hand it over to Adam for the last question.

Adam Camras: Yeah, I think it’s — you’re at a really interesting place in your life, personally you’re just coming off of a really nice liquidity event, we don’t have the details about that, but that would also be interesting if at some point we could have some of the play-by-play about how that transaction happened then the acquisition process and really what attracted LexisNexis to — what was their interest in it, because I think it’d be really interesting for the listeners I’d like to know that and hear about it.

But I think, for you personally, what’s out over the horizon for you and this is a two-part question, but also what do you see is the future of legal services, and that’s the real question that everyone is asking and I think a lot of people have an opinion on it. I personally believe it’s — I firmly believe it’s really exciting, the opportunities are out there, but I’d love to hear — what’s your — kind of the next steps for you personally, but what do you see is the global changes that are going to happen?

Gary Sangha: Sure. I think there’s a lot of disruption going on in legal services and I think it’s really, really good for the listeners of this podcast. I think that look — I think there’s so much innovation to be had in legal services. I think that it’s just waiting for efficiency productivity precision enhancements that tech can offer. I think that technology has created an era where solo practitioners and boutique firms can play with the big boy so to speak, they can leverage technology to compete.

I think the era of the big firm is probably coming to an end in the sense that the benefits they provide — loyal clients whatnot, probably don’t exist since the post-financial crisis and that just brings up a lot of opportunities. I think the future is custom services. I think the future is lawyer branding versus firm branding, and I think that just provides a lot of opportunities for all of your listeners.

Monica Bay: And can you tell our listeners how they can reach out to you?

Gary Sangha: Sure. You can reach me at my e-mail, [email protected] or via Twitter @sanghags or you can find me on Linkedin under Gurinder Sangha.

Monica Bay: Well, thank you to you and to Adam, it’s been a wonderful conversation and you did a fantastic keynote, so thank you for being with us. I’m Monica Bay and we’ll see you on the next version of ‘Law Technology Now’.

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