Small is the new big in legal technology companies

September 25, 2014

Big used to matter in companies providing legal support, research, and technology based solutions to law firms.

Lots of money, broad distribution networks, seasoned executives, elaborate conference booths, and fancy marketing collateral.

Big was the safe choice. You didn’t get fired for buying from the big company from which every other law firm was buying.

No longer. Small startups are becoming the providers of choice for law firms across the country — and the world.

Larger legal solutions companies are struggling. They are laying off people. They’re have trouble bringing innovation to the marketplace. Will they even be around for the long haul?

Law firms also like small companies.

Founders and company leaders interact directly with customers.
Founders are close to decisions that matter for customers, and make decisions quickly.
Founders and team members personally know the pain and struggles of building businesses, just as lawyers do.
Founders know customers by name and have a sincere desire to get to know their customers as people.

Clio is one of these upstarts.

The legal case management platform was created just six years ago, coded by two childhood friends who’d quit their day jobs because they wanted to start a business together. They actually had before, and failed. In the battle for the future of the legal profession, this much-discussed effort to reinvent law, Clio is an underdog.

It just didn’t look like it in Chicago this week.

Music blared and bright lights flashed as co-founder and CEO Jack Newton (@jack_newton) kicked off the annual Clio Cloud Conference on Monday— a celebration of what they’ve accomplished, a look ahead at what Clio plans to do, and an opportunity to bring together those who share a similar passion for doing better in a profession that desperately needs it.

“More of a tech conference vibe here than a stale legal conference,” tweeted Omar Ha-Redeye (@omarharedeye). “Loving it.”

“#ClioCloud9 is a breath of fresh air for legal events,” typed Jabez Labret (@jabezlabret). “This is how it’s done!”

I’ve been to a number of these “stale legal conferences.” Admittedly, clearing the bar that is the standard for such events may not be difficult, but Clio soared over it. We may be seeing the beginnings of a huge legal conference a la Salesforce’s Dreamforce.

Clio is soaring on the cloud-based legal practice management software front as well. While still dwarfed by the big boys with billions of dollars, Clio is bringing innovation and grabbing market share. From 10 users in 2008, Clio has grown to 35,000 users in 50 countries today — from small and solo firms to developing for firms with 50 to 100 lawyers.

Forty members of team Clio and nearly 500 lawyers and other legal professionals were on hand this week in Chicago — and they’re not the only ones who think there’s clearly something here. Earlier this year, Clio raised $18 million in venture capital from Bessemer Venture Partners, an early-stage investor in Skype, LinkedIn, Yelp, Pinterest, and others.

This funding puts Clio among not just the most well-funded legal startups, but all startups. Bessemer’s Trevor Oelschig (@oelschig) said they “see SaaS companies strike gold by providing specialized solutions tailored to a specific vertical rather than going for a ‘one-size-fits-all’ enterprise software” and that “Clio has already shown incredible traction in the legal space and demonstrated a deep understanding of how to tangibly improve the day-to-day workflow for lawyers.”

Clio’s value offering isn’t solely focused on money, on turning as many waking moments as possible into another chance to bump law firm profitability. “We offer our customers one of life’s most precious resources,” says Newton. “Time.”

Clio and its customers have found Clio saves lawyers eight hours a week. In this extra day per week, Newton, the father of three young children, wants lawyers to focus on quality of life, their team, personal matters, and family.

In a profession that ranks among the worst in terms of depression and job satisfaction, Clio’s doing what it can to give lawyers their lives back. And this focus on people, on the day-to-day lives of the lawyers they work with, is paramount in everything they do. And it expands beyond the existing legal workforce, as Clio’s platform is free to law schools; the company donates $7.3 million in value annually to students at more than 130 schools.

Clio understands that, in an era where everything is Yelpified and social media can spread good news just as quickly as it can bad, lawyers — particularly solos and lawyers at small firms — can’t afford to provide bad user experiences. Or, maybe more appropriately, they can set themselves apart from others by focusing on doing exceptional work.

To this point, it’s clear Clio has done it themselves. Like their product does for their clients, Clio is the underdog that’s proving itself every bit as capable as the longstanding giants. And like them, they now have the resources to level the playing field — resources that have enabled them, as announced this week, to launch an Android application, partner with fellow upstart Fastcase, offer Zapier, Quickbooks, Xero, and JurisPage integrations, and launch Clio Next that offers a number of in-app upgrades.

Clio’s doing something here, something big. Their story is an inspiring one. For every lawyer out there looking to make a name for themselves, aiming to put a dent in the world in their chosen area of expertise, there’s a company that’s doing the same — and thriving.

Where do they go from here? It’s hard to say for sure. But before long, we’re going to see this upstart partner with larger law firms that parallel their own upward trajectory. And when they do, Clio will surge past this underdog status, with a very real opportunity to, if not reinvent law, dramatically reshape it.

For more on Clio’s Cloud Conference, check out this curated social coverage from LXBN.

A good portion of this post was originally published in my contributions to Above the Law.

Image courtesy of Flickr by National Zoo

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