NEW YORK — At the Galvanize event space, legal tech community EvolveLaw held its first invitation-only EvolveLaw Summit on Tuesday, bringing a strong contingent of legal tech start-ups together with some of the funders and partners that represent paths to success for many of them.
The core of the program was two panel discussions focused on helping legal tech startups navigate the world of funding and strategic partnerships, followed by an afternoon of one-on-one meetings that were facilitated by a mobile app.
The first panel, on Venture Capital and Angel Investment, featured Edward Wilson of Anthos Capital; David Rose of GUST; Lorine Pendleton of Portfolia Funds; Mike Suchsland of Joplin Consulting LLC; and Jeroen Plink, an independent advisor and board member.
Some of the insights shared by that panel include:
- All panelists stressed the importance of start-ups understanding the problem they are trying to solve, having a good product and a good team. But they particularly emphasized the importance of having a good sales plan and process. This is especially important when selling into the “locked down” nature of a law firm, as Rose put it, where contacts with the outside are often limited and restricted.
- Panelists also discussed the relatively small importance of market size. “Market size is way down on my list of criteria,” said Suchsland. Rather, while it is important to understand the market a company is targeting, it’s much more important to have specific plans for reaching realistic revenue targets.
- Legal start-up founders who are lawyers themselves can sometimes set up barriers, panelists said. By nature, lawyers are rule-followers who sometimes lack the flexibility to redefine the rules or to pivot to new markets or unique approaches.
- All of the panelists offered a vision of a legal industry of the future that is very different from today, predicting that as much as 80% of legal activity today can be replaced by automation and artificial intelligence. But the future also holds new paths to growth; Rose noted that most legal start-ups offer point solutions that will be acquired and absorbed into larger companies, but that there is a relatively unexploited segment of growth at the boundary of where law fits into business and society. This provides an opportunity to support legal work not necessarily delivered through the current law firm paradigm.
The second panel, on Strategic Partnerships, features those individuals who work with legal tech start-ups, including Michael Frankel of the Deloitte New Venture accelerator; Carlos Gamez of Thomson Reuters; David Coffey of LegalShield; Dean Sonderegger of Wolters Kluwer; and Bill O’Boyle of NorthState Consulting.
Highlights from this group included:
- All of the panelists, particularly Gamez and Sonderegger, stressed the importance of entrepreneurs showing patience and persistence in dealing with larger players. Priorities and personnel can shift over time, so flexibility is also important. Gamez suggested finding people like him — those who play a role in innovation initiatives and can serve as connectors between different parts of a large organization.
- As larger companies tend to know what they are best at, the “build or buy” question is important. Partnerships will succeed where the outside partner has some capability not duplicated on the inside.
- The panelists had lots of good tips for penetrating larger organizations, most of which revolve around personal relationships. “It helps if I’ve met you,” Sonderegger commented, adding that initial contacts via email or by phone are less successful. Personal contacts at events like EvolveLaw go a long way toward motivating him to take the effort to find the right contacts within his organization. O’Boyle added that it was important to prepare for face-to-face meetings in forums such as trade shows, in order to leave less to chance and to maximize the face-time available.
- Gamez noted that there are various flavors of partnerships. Some consist of co-experimentation, where both the larger partner and the smaller outsider might want to test new concepts. But in other cases, the outside partner might have a well-tested product and plan, and the partnership becomes all about building out scale. It’s important for potential partners to really understand the nature of the partnership and to understand each other’s expectations.
- Finally, Sonderegger reminded the startup executives present of what their goal should be. The goal is not the partnership — the goal is revenue. Putting the effort into building a partnership can go for naught if there’s not a clear plan and a commitment from both sides to increasing revenue.
In an earlier post on the Legal Executive Institute blog, EvolveLaw co-founder Mary Juetten laid out some of the challenges (many of them self-imposed) facing the legal tech sector. The panel presentations at this EvolveLaw event, and presumably some of the one-on-one meetings that followed, should help the sector address some of those challenges.