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Ep 89: From Hackathon to Legal Game-Changer with Hannah Konitshek, Founder, Legal.io
79 Plays1 month ago
How do you build a legal marketplace with more than 75,000 community members? Find the right investors to join you on the journey? And help the business navigate the inevitable pivots that will come along with its growth?
Join Hannah Konitshek, COO and Founder of Legal.io, Business Operations and Strategy, as she dives deep into the business of legal tech, and how a relationship built during a hackathon transformed into the premiere marketplace for in-house legal talent.
Listen as Hannah explains how attending law school in San Francisco guided her legal career, founding and growing a start-up with a legal background, how to balance your convictions with investors, and learning that the biggest risk is not taking a big enough swing.
Read detailed summary: https://www.spotdraft.com/podcast/episode-89
Topics
Introduction: 0:00
Going into legal tech directly from law school: 2:10
Do law schools prepare students for careers outside big law?: 6:25
Getting started with Legal.io: 9:20
Defining yourself as a “second-term founder”: 11:31
Hannah on conviction and experimentation: 14:50
Approaching fundraising: 19:06
Advice to business leaders on pivots: 23:21
How Legal.io works with AI: 28:45
Upcoming trends in the legal hiring market: 30:47
The future of Legal.io: 36:04
Rapid-fire questions: 37:29
Connect with us:
Hannah Konitshek - https://www.linkedin.com/in/hannah-konitshek/
Tyler Finn - https://www.linkedin.com/in/tylerhfinn
SpotDraft - https://www.linkedin.com/company/spotdraft
SpotDraft is a leading contract lifecycle management platform that solves your end-to-end contract management issues.
Visit https://www.spotdraft.com to learn more.
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Transcript
00:00:00
Speaker
But you only get to live once. sure And I think the biggest risk that you can take is not taking a big enough swing at something. right So I think when you talk about risk, it's like, is it a bigger risk to ship something that might look kind of ugly on the first go? or is the bigger risk that no one even knows that you built it ugly or not to begin with? right And I think that's ah that's one thing that I think a lot of founders have to learn a little bit the hard way, whether it's like when you decide to actually ship a product or, for example, where you choose to focus your energy inside of the company. right like There's a lot of people that come up with good ideas.
00:00:38
Speaker
It might not be ah an idea with a big enough like total addressable market to go out and raise venture financing. Right. And so I think it's across the board, you kind of have to think about what swings am I going to take and are they big enough? And I think the biggest risk again is not taking a big enough swing at something.
00:00:54
Speaker
How do a legal marketplace with more than 75,000 community members? Find the right investors join you on the journey. a legal marketplace with more than seventy five thousand community members find the right investors to join you on the journeyry and help the business navigate the inevitable pivots that will come along with its growth.
00:01:17
Speaker
Today, we are joined on the abstract by Hannah Konashek, co-founder and COO at Legal.io, the marketplace for legal talent and technology that in-house legal teams all over the place, including folks in the Fortune 500, rely rely on Hannah started at Legal.io as an intern after graduating from UC San Francisco Law School and has grown with the company over the past decade, a journey that we're going to be talking about today.
00:01:48
Speaker
Before law school, Hannah worked as a consumer advocate for a tech company, which I think informs your very customer-centric, customer-focused approach.
00:01:59
Speaker
Thanks so much for joining me today for this episode here at the Spot Draft Summit in San Francisco. Yeah, thank you so much for having me. The conference has been fantastic. Cool. Okay. Going straight into legal tech out of law school is not a traditional path. um How did legal tech get on your radar when you were at at law school here in San Francisco?
00:02:23
Speaker
Yeah, great question. So my journey really started basically like crash landing into like the heart of San Francisco at San Francisco, formerly UC Hastings. yeah And I think the craziest thing is that when you're in law school, everybody is basically like, well, after law school, you either go into a firm, you do a clerkship, you go work for the government.
00:02:43
Speaker
And at the same time, you're basically in the heart of San Francisco and like within like a three block radius. You could be walking to the Twitter headquarters, the Uber headquarters. I mean, you name it and you're within walking distance.
00:02:55
Speaker
And literally nobody was having that conversation inside of law school. You know what I mean? like You have some of the most innovative legal teams doing some of the most challenging legal work arguably on the planet, right? They're pushing regulatory boundaries left and right. You have these teams trying to w risk manage, not just in the United States, but like globally.
00:03:14
Speaker
And nobody was really having that conversation. And then obviously it's like the epicenter of SaaS, the epicenter of tech. And you have all these companies that are trying to build CLMs, e-billing systems, like you name it, they're trying to build it.
00:03:25
Speaker
And nobody was really having that conversation. And so I was fortunate to basically find a like-minded group of people that were also having that very similar conversation.
00:03:36
Speaker
And so kind of my first foray into legal tech was us deciding to host a hackathon. Really? Yeah, yeah, yeah. it was What were the teams composed of? Like, are is this engineers and lawyers? Is it just lawyers? Like, what does that what does that entail?
00:03:51
Speaker
It honestly, so i think what was super crazy is we kind of came up with this idea over, I think, like a random lunch. that we were all having. And we were like, you know, let's see, let's try and get it off the ground see what happens. And we totally thought that it was going to be like a Saturday in a classroom and it was probably going to be like the five of us with like maybe 10 other people.
00:04:11
Speaker
And it slowly just snowballed. So we had like the DGC that we had randomly emailed at a big company and he was like, oh, I would love to judge this. Right. So you get kind of like that first sort of stakeholder that's bought in.
00:04:24
Speaker
And then at the time, and this is like a super San Francisco story, but one of the people planning the conference was actually friends with one of the people that was sort of high up at Airbnb and at the time. And she was sort of telling them all about this thing we were trying to get off the ground. And they were like, oh, why don't you totally just use the headquarters? That's great. And we were like, that is like so fantastic. And they were like, yeah, we like really love the mission, right? Like, why don't you guys go ahead and use that?
00:04:51
Speaker
And so that like once you get a cool venue, once you get some like stakeholders, right, like that really got the ball rolling. um And it just turned into this kind of like massive event.
00:05:02
Speaker
We had like a a car full of people that drove all the way up from like UCLA's law school to come compete. People literally like slept in like the you know like the headquarters in this like cafeteria we were using to basically hack all weekend.
00:05:16
Speaker
And yeah, I think what was really eye-opening is that there was just this like incredible community of passionate people who were like, oh my god, where are like the other 10 people that are thinking about this? And so yeah, that was like my my real sort of like first foray into legal tech.
00:05:33
Speaker
Do you remember what project you worked on at the time? Or do you happen to remember like who won? what you know what what What sort of ideas were you all experimenting with? Yeah, I think um so. That's a great question. i literally to this day do not remember who ended up winning.
00:05:48
Speaker
I think everybody was just so excited to be there. It's like everybody got like a participation trophy just for having found 50 other like like-minded people. I worked on something, and I guess it kind of aligns a little bit with like spot draft, right? But it was basically like document automation, which Back in the day, like, i don't know, like coming from a non-tech background and then being like circa 2014, it felt like very revolutionary to be like, we're going automate this government form using like, i mean, I don't even know what we cobbled together. But yeah, stuff like that. And so it was very, very nascent, if you will. But um yeah, just super exciting.
00:06:25
Speaker
I mean, that's student organized and maybe maybe things have changed a little bit, but do you feel like law schools are doing enough to educate students about the opportunities that are out there beyond you know government service that you're referencing or big law, that there really is this whole world of other opportunities that that people could be going out and sort of going after?
00:06:47
Speaker
Yeah, I think that's a good question. I think that they could definitely be doing more. um And I think that mainly because I think there's just so many alternative career paths. You know, in Hastings or UC San Francisco, to their credit, they have this really great program called Startup Garage, where they basically get people to come in and sort of be like, okay, so what do what do the deal terms actually look like when you have a startup company that's doing their Series A, their Series B?
00:07:14
Speaker
And so definitely trying to engage, but I don't really remember a lot of people getting like summer internships in-house, right? When like, I mean, that could be like some of the most fun sort of like eye-opening experiences you could have.
00:07:27
Speaker
Not to mention legal operations, right? I mean, outside of basically getting Thrive to go to like Westlaw or like LexisNexis training sessions for free lunch, um nobody's talking about CLM. Nobody's talking about e-billing software.
00:07:43
Speaker
Nobody's talking about like time management software. But the minute you start any one of those jobs, it's like a crash course. I mean, I didn't go to law school and we're going to get to sort of like you getting started with Legal.io in a second.
00:07:54
Speaker
But I do feel like not just UC San Francisco, I mean, it's a top-end law school, right? you know You do have the opportunity to go into big law if you want.
00:08:05
Speaker
I feel like at a lot of other law schools, there's all these other roles, like you reference legal operations, or privacy program management, right, that are supporting legal or working alongside legal. And they don't always require a law degree. yeah But if you have one, it could be really valuable.
00:08:21
Speaker
And it also could be a foot in the door to more senior sort of counsel position or an AGC role. or something that you would otherwise not be able to get. I feel like there's a missed opportunity there, I think, just broadly speaking. Yeah, yeah I think so too. And I think what's, I don't know, I think there's a very narrow focus for like what constitutes the practice of law.
00:08:44
Speaker
And what I mean by that is like inside of these organizations, right, if you're dealing with like a massive data breach or you know, your company is lucky enough to be getting acquired, the first thing that happens is they come to you and they're like, well, where's all the customer agreements for due diligence? who actually signed the privacy policy, right?
00:09:01
Speaker
And those are fun that's like risk management for your organization, right? Or even like sort of strategic engagement around how do we get a massive customer? How do we like get an acquisition over the finish line? um And so, yeah, I think it's really kind of like a rethinking of yeah what it means to actually practice law post law school, that makes sense.
00:09:21
Speaker
When you started with Legal.io, mean, you were sort of like ah an intern or a helper or sort of helping them part time. Tell us how you met the team and and how you got started with them. yeah it's um so it's Yeah, it's a pretty good story. So, I mean, it is like um people are always like, yeah, how did how did you guys all originally meet? And it was basically me, co-founder Peter, and then also Tony Lai.
00:09:43
Speaker
And the most honest way to say it is we were basically just like collaborators. So I think I originally met them basically through the hackathon. um And so they sort of found out that we were doing this hackathon. They had already kind of started a company, and ah at our company, in its previous iteration. um And the focus was just build a community of attorneys, kind of focus on referrals, right?
00:10:05
Speaker
um And so, yeah, they sort of um down working with um Stanford's Codex, which is like their center for legal informatics. They were very, very, very very involved there. And all of those people were like, oh, my gosh, like we have to send a team of people up to this like legal hackathon. Right.
00:10:21
Speaker
So, yeah, I think it was basically just like a shared passion over this like growing subsector. And I'm sure you you know you were a doer, right? I mean, as as soon as you start doing and helping people, you begin to get enmeshed in what they're building. And like pretty soon they probably think like, oh, we definitely couldn't build this without Hannah being a part of our team.
00:10:41
Speaker
Yeah. I mean, I think that's one of the beauties of Silicon Valley is that I think people are looking for to, just as you said, the doers, right? Like people just kind of have this shared vision for like what the world could look like or you're a tiny piece of the world in the legal tech sector.
00:10:58
Speaker
And once you find people that are also like, oh, yeah, like I also I both see that and want to go do that. yeah um I don't know, there's like to an extent you kind of hold on for dear life, right? Because you find so few of those people that are like willing to take that gamble and willing to take that risk and willing to like wake up every day and like, you know, oftentimes grind on like a shared sort of like passion project.
00:11:20
Speaker
So yeah, I don't know, it's, we all have like very complimentary skill sets, but once you find those people who are just like down to try something big, I think you just gotta, you know, go with it.
00:11:31
Speaker
A term that you used when we were prepping for this that you used to describe you and Peter, the CEO and and your fellow co-founder is second time founders and i really like that term what do you mean by that yeah that's like a really good question so as i kind of mentioned right like we started originally working on this idea for kind of this like professional network or like this community of attorneys back circa like 2013 was kind of like the first generation of the company and i think like any good startup you kind of go through like a winding sort of series of pivots
00:12:05
Speaker
Yeah. um And so, you know, the current iteration of the company is basically this professional network. And then we also have like the staffing and sort of like talent placement arm. That's kind of very far away from where we originally started. um So where it originally started was this like community. And we would also basically process referrals. So if you are the Florida Bar Association, you're probably sending out thousands of referrals a month to different people inside of your network. Sure. And building software there.
00:12:33
Speaker
And so you know the current iteration of the company and the old one, i think you learned so many lessons and there's a lot of different adages in Silicon Valley about all of the um battle stories or war stories that you get on the first one. Essentially all the mistakes that you make and all the things that you learn. right I think one of the most popular ones that we sort of ascribe to is first time founders focus on products, second time founders focus on distribution, right? Which is just to say, you know, first time founders are like, oh, it has to be pixel perfect before we ship it and do all these things.
00:13:06
Speaker
Second time founders are like, how do I get this into the hands of as many people as I possibly can? Yeah. And so I think, yeah, the two sort of journeys of the company are the two sort of like, yeah, versions that we've had pre-pivot.
00:13:18
Speaker
I think it really, yeah we learned a lot of those lessons. Do you feel like your risk tolerance has changed a lot over time? I mean, it's one thing to sort of go through the training of law school.
00:13:29
Speaker
But if you're talking about sort of your almost your first iteration of yourself as a founder and your second iteration. I hear we want the product to be perfect versus we just need people to be using this and learning from that. I mean, talk to us a little bit about maybe how your risk tolerance has evolved.
00:13:44
Speaker
Yeah, I think it's a really interesting question, right? So the way that I think about risk, right? And I guess this like generally ascribes to like my sort of life philosophy, right? But you only get to live once, right?
00:13:56
Speaker
And I think the biggest risk that you can take is not taking a big enough swing at something. right so i think when you talk about risk it's like is it a bigger risk to ship something that might look kind of ugly on the first go or is the bigger risk that no one even knows that you built it ugly or not to begin with right and i think that's a that's one thing that i think a lot of founders have to learn a little bit the hard way whether it's like when you decide to actually ship a product or for example where you choose to focus your energy inside of the company. right like There's a lot of people that come up with good ideas.
00:14:33
Speaker
It might not be ah an idea with a big enough like totalable total addressable market to go and raise venture financing. right And so I think it's across the board, you kind of have to think about what swings am I going to take and are they big enough? And I think the biggest risk, again, is not taking a big enough swing at something.
00:14:50
Speaker
I had like two questions here prepared. One of them is sort of around conviction around pivots and the other is around experimentation. But I think maybe they're sort of like, I don't know, they should be combined into one question for you essentially, which is, is conviction important?
00:15:05
Speaker
Is experimentation important? Neither of these things important? Like, how do you think through that as you are either launching a new product offering, taking the business in a meaningfully different direction? yeah Yeah, I think I think conviction, I think, you know, it's always this push and pull between conviction and like sort of ascribing to a belief or like a philosophy you have about like where your product is going, but then also listening to the market.
00:15:33
Speaker
Right. And so those things are always true. And you're always kind of like towing that line, um because I think the reality of being an entrepreneur is you're going to wake up every single day, especially in the early days, and especially in the legal industry.
00:15:46
Speaker
Everybody's going to tell you the hundred reasons why it's not going work or why you're never going to sell to that big company or why no attorney is ever going to take a risk with like XYZ. And so you have to have this underlying conviction about what you're building, right?
00:16:01
Speaker
um And you don't always necessarily know the steps to how you're going to get there. But I think one of the questions and I've you know worked with the venture fund a little bit, so I've kind of been on both sides of the table. One of the questions that are one of the pieces of advice I would always give founders is where do you see the world 10 years from now and how is it different by your company existing? Right? Because there is honestly a lot of different paths for how you get there.
00:16:23
Speaker
And I think you have to have conviction in the ten five, ten year vision. um And you have to be a little bit flexible in the details, right? Because honestly, you're going to roll out features and ones that you thought were going to be super successful, people, it's going to be like crickets.
00:16:37
Speaker
And ones that you're like, oh, that was totally an afterthought. Suddenly you're getting like pings in the Slack channel and other visitors, you know, used it and other visitors used it. yeah, I think it's it's always a push and pull.
00:16:48
Speaker
I'm not skeptical of that, but the world is changing really fast. And we've heard a lot about that today. And 10 years is a long time horizon, right? 10 years is like super meaningfully different from what's going to happen in the next 24 months or 18 months. yeah How do you think about that in the context of Legal.io? How do you think about how you want to change the world?
00:17:12
Speaker
i mean, in like a not in like some huge sense, but in in a sense, like how do you want to change the world over the next decade? Yeah, well, I'm actually announcing my rocket company launch. No, no, no. there's um There's actually a quote by Jeff Bezos that I really like, right? Because obviously he was at the helm of Amazon for so many years.
00:17:29
Speaker
And he basically said, you know, you can ask the question about how is the world going to look different three years from now, right? But he's like, we like to ask another question at Amazon. And the question is basically, what is not going to change in the next 10 years? right Because you can path you you know you can sort of chart out a path based on things that you fundamentally know are going to be true about how your industry buys, what people like really want in their hearts of hearts. right like You can like chart out a path based on that, but there are going to be like obviously short-term headwinds.
00:18:02
Speaker
um So I think a really good example or how we think about it at our company is that there is always going to be this like innate desire to connect with your peers. There's always going to be a need for people to find their next job. yes right There's always going to be a need for people to sort of find other resources or like whether it's like a peer in their industry they can ask a question to or a template. right like None of those things are going to fundamentally change and we can chart a path based on that. um I think the short-term headwinds, and this is where sometimes, especially if you don't have a lot of traction, it can be a little bit, people can sort of get like stars in their eyes where they're like,
00:18:42
Speaker
what if we just pivot to AI or, you know, circa five years ago, was like, well, what if we just launched a token, right? You know, all these different things. But I think oftentimes you end up basing a strategy or or founders can make the, you know, the mistake of basing a strategy ah off of things that are short term and are like maybe possibly only going to be true for like a short period of time, not what they know to be true over the long term.
00:19:06
Speaker
Let's talk about fundraising for a minute. yeah um I know you've got thoughts on this. Legal.io raised your Series A from Tiger Global, obviously a super well-known investment firm.
00:19:19
Speaker
ah How did you approach the fundraising process and try to get attention from the right investors, the investors that you wanted to get attention from? Yeah, that's a really good question.
00:19:30
Speaker
So yeah, i think I think fundraising, right? I think it is honestly, i don't want to say it's a numbers game because it's not, right? like You have to find people who are fundamentally aligned with your thesis.
00:19:42
Speaker
um but you're going to get way more no's than you are yeses, right? yeah I mean, the reality is that you're going to get 99% of the no's, right? Because you're only going to have like one lead investor and then a couple co-investors.
00:19:54
Speaker
And so our fundamental approach to it was we did a lot of different market research about all the big firms, right? Like firms that were big enough to be leading a series A of that size. And we were looking for investors that were very thesis aligned with where we see the market going. um And so our Series A, I don't want to say we got lucky um because we were definitely reaching out to people that like were fundamentally thesis aligned. um But I think we only had probably like 10 to 20 conversations um before we were able to basically move forward with Tiger Global. And the reason for that is because the team was very, very fundamentally aligned with like the thesis and the vision that we have.
00:20:36
Speaker
And so there was no, don't know, like being on the other side of the table, doing a little bit of like the seed and like pre-seed investing that I did If you, if someone doesn't fundamentally buy the thesis, no amount of good metrics or good traction is going to convince them otherwise.
00:20:52
Speaker
yeah Right. Because you have to fundamentally believe in that. Right. Because, you know, metrics can go up and down The market can change. But you need someone that fundamentally believes that the world is going to look the same way that you do.
00:21:04
Speaker
you have to be aligned on that over the long term. Finding investor is also sort of like it's a partnership, I guess, of sorts, right? You're signing up to have potentially these folks join your board, get to help shape the direction of your company, maybe influence the culture of the business.
00:21:23
Speaker
What were the sort of questions that you were asking yourselves internally, almost as you were evaluating the different investors, maybe things that you were looking for there I think the biggest thing or like advice that I would give other founders, I mean, I think obviously um the net worth that they have, that's like super powerful, right? um So I think you sort of see this, like we are not a YC company, but you sort of see that with YC, right? Is they sort of have the YC mafia and they tend to all be um you know very aligned in the way that they like went through the program, some of the beliefs they have about like how you build companies, and then they all obviously buy from one another. right So that's like a fantastic network to have.
00:22:02
Speaker
um We went through StartX, which is basically Stanford's incubator accelerator, which was like a fantastic experience. There's a little bit of that, but I think honestly, you the portfolio of companies that they have, and to the extent that you can be asking each other questions, to the extent that you can be like, hey, can you introduce me to the general counsel of XYZ portfolio company? That's actually like a really, really great thing to have in your arsenal.
00:22:26
Speaker
I think the second thing too is to really think don't go into that relationship thinking too much about how you kind of wish the dynamic between you and your investor would work right it's really important to understand as founders what are you looking to get out of the investors right so one of the things I always said on the other side of the table to founders like trying to raise get like bigger checks is um you're also interviewing the investor Right? Because if you have a company that has a lot of traction, if it's a vision that people believe in, there's going to be competition for that, you know, to to basically have allocation inside of your round, right? yeah So whenever you're going into these meetings, um I think a lot of people can sort of psych themselves out and they're sort of like, oh, I need to be like catering X about the pitch or I need to be like, you know, approaching them about Y. And I'm like, you also need to be asking them these questions, right? Like, can you make introductions to your portfolio companies?
00:23:20
Speaker
Things like that. We've talked a little bit about pivots. Obviously, investors care about pivots. Probably want to have some input around the business is going to go in a different direction.
00:23:33
Speaker
Having been through that, any advice that you would give to, say, business leaders generally about communicating with their investors during a time of change in the most productive way?
00:23:46
Speaker
Mm-hmm. Yeah, I think so. I think one of the things that people can oftentimes lose sight of, especially when they're sort of thinking about investors, right? Almost like it's like the the Wizard of Oz, right? Like the man that you never see in the castle, right?
00:24:01
Speaker
Is um investors are investing in your company because no one knows your thesis and your market better than you. Right. That's why you're there. And so honestly, like I think we've been really lucky in that our investors have always taken.
00:24:16
Speaker
yeah I mean, they basically take like our advice on like where we think we should take the company. yeah um You know, it's always a conversation. Right. But I think they definitely believe that we understand our industry and our be and our business better than anyone.
00:24:28
Speaker
um And so I think it's, you know, radical transparency. Right. I think to an extent and sort of just being honest about what's working and what's not working. um Because I think people oftentimes like they're backing, yes, the company, but also the individual founders as well. And there's a level of trust, not just in like your vision for the future, but in your judgment.
00:24:48
Speaker
um And so, yeah, I think it's really like having those conversations, communicating transparently. And then i I don't think we've ever run into a situation where, our investors or any sort of strategic advisor didn't see the same things we were seeing.
00:25:02
Speaker
Right. Like um and and that's one of the the things um I got this piece of advice from um one of my mentors is they were like, people should never be surprised. Right. So, for example, if you're a startup and you're basically giving your like quarterly or monthly updates to your investors, you should be telling them like what's going well and what's not going well.
00:25:21
Speaker
sure Because if you're sort of glossing over the things where it's like, hey, we launched this and we really hoped it was going to get more traction. You know, if you're coming nine months later and they're like, why are you pivoting? I thought it was fantastic. Right.
00:25:33
Speaker
So, think it's a little bit of just like radical transparency so that no one ah is ever really surprised by those things. um And I think also, you know. Our investors also typically do have industry experience, right? um A lot of them, especially like one of our board members, Man Dang, you know, she she was a d DGC at a very large company for a long time. And so if you're honest with those people, they can oftentimes be like, well, hey, have you thought about it like this?
00:25:58
Speaker
Right. Or have you reached out to this person? And so, yeah, I think in terms of communicating with investors or just other stakeholders, it's actually allowing them to like support you along the journey. hmm. I put this question to our CEO and COO who I did an episode with here.
00:26:14
Speaker
you know, we just raised a series B, you raised a big series A, I mean, not super recently, but right. um And the question is is something to the effect of, I mean, fundraising is obviously important to the business. It helps you grow, you can put that capital to work, but fundraising isn't like an end in and of itself.
00:26:36
Speaker
Yes, yes, Right? Even though it's super exciting to go and share the announcement on LinkedIn, yeah that sort of thing, right? I'm just curious how you think about that and how you sort of set the right tone with Peter and your other co-founders, right? And also with the rest of the company, right? Like, how do you but do you square that and and get that right?
00:26:58
Speaker
Yeah, I think you said it perfectly when you said that capital is basically a tool. Yeah. And that's um I think it's, you know, everybody wants the article in Forbes. Everybody wants the article in TechCrunch, right? Everybody wants the feature in like strictly VC.
00:27:13
Speaker
All of those things are true and it feels very nice. I think one of the quotes I read that um honestly is kind of like a dumb moment and we should sort of know this, but it was basically if every single time you saw a headline about company raises 20, 30 million,
00:27:28
Speaker
If instead the headline read, founders sold 30% of their business for $20 million dollars or whatever the terms were, because you never really know. i didn't go into their pocket directly. Yes, exactly, exactly. No secondary. um you know I think it would be a very, very different conversation, right?
00:27:47
Speaker
Because, yeah, I think people can get like a little bit sort of like starry-eyed when they talk about capital. And don't get me wrong, capital is an incredible tool, obviously. And also there is a level of, um you know, to be able to go from the A to the B to the C, like the number of companies that go on to raise that, it goes down every single time, right? Like I think it's something like, um and I would say, don't quote me on this, but we're on a podcast, right? um But you know, it's something that like only like 10%, I think, of companies that raise a seed round will go on to raise a series A wow or something to that effect.
00:28:21
Speaker
But it's like a small amount, right? So like it is an accomplishment to be able to get like market buy-in. But yeah, if it was really like, you know, you spend your entire life building this company. And if it was, um yeah, you sold off 20% of that or, you know, X company gave you know sold off 20% and gave away a board seat for X dollar amount.
00:28:42
Speaker
I think we would think about fundraising a little bit differently. Yeah. We're talking a lot about AI here at the summit. I know you're thinking a lot about this, of course.
00:28:53
Speaker
How is LegalIO thinking about the role that AI is going to play in your product offerings, the network that you have, the community that you've built?
00:29:06
Speaker
Yeah, I think, so though obviously we're in the business of talent matching, right? um And I think like ah for me personally, one of the most rewarding parts of the job is when you find some of these attorneys who you know went to good schools, have incredible skill sets,
00:29:24
Speaker
but maybe they don't necessarily interview well, or maybe they ended up at kind of like ah you know like a mid-market company or something like that, right? Or they ended up in an industry that maybe isn't the industry they're passionate about, right?
00:29:37
Speaker
And interviewing that person and being like, oh, you can totally do this job. You're fantastic. You have excellent business judgment. um I'm going to go and I'm going to basically like take this resume, I'm going to make sure it looks great and that all of those things actually come forward, and then I'm going to go pitch you to some companies. and like The moment where you get to make that phone call and you're like, you got the job, right like this SaaS company that everybody talks about, we all have the app on your phone, like you got the job and you get to go like be a part of that mission, that is like so deeply rewarding. and so I think how we think about AI is,
00:30:11
Speaker
is um obviously we can only talk to and place a fraction of people, right? But there are like tens of thousands of those people, not just in the United States, but globally.
00:30:22
Speaker
right And to the extent that you can start to use large language models to do things like actually pull in all of the data, whether it be like a cover letter or you know your resume and stuff like that, and actually start to make like more intelligent matching between candidates and jobs at scale,
00:30:39
Speaker
I think that's just like an incredible unlock in addition to just being like, you know, deeply rewarding for people kind of finding worth that they're passionate about. I know you have a lot of enterprise clients actually too that you work with.
00:30:52
Speaker
and the fact that you are are doing so much talent matching across these different organizations probably gives you a pretty good lens in different companies are thinking about AI. I guess, yeah, what are you seeing in in the market, right? Are people nervous? Do people think this is risky? Are is there and more people out there who want to seize the opportunity than maybe we might be giving legal teams credit for?
00:31:20
Speaker
curious what you're seeing in the market. Yeah, I think it's... I think so obviously our company, like one of the things that they do is they start to pull a little bit of spend away from law firms to basically allocate to LSPs. It can be more cost effective. Sure. So I would say the conversation around AI that we end up having with our customers oftentimes is basically about how it's going to impact productivity and where they start to allocate capital. Right. I mean, I think it's a really interesting conversation. Like we have a lot of large enterprise clients that are basically going through like annual
00:31:54
Speaker
panel reviews, right? And they're sort of getting those letters from the big firm that's like, hey, the partner's rate is going from $1,800 an hour to $2,000 an hour. You know, and you have these general counsel who at the same time, their budget is not going up, you know, they're sort of being like, okay, like, how are you going to get more with less, right? That's always the conversation.
00:32:13
Speaker
And so i think a lot of it is just how it's going to allocate resource management. So for example, you know what does it look like um to start putting pressure on outside firms to basically be using some of these tools, right? And that's not necessarily the in-house counsel team doing it, but I know that like Westlaw, for example, just launched a new AI tool, right? So to the extent that that can sort of do a lot of like case research, for example, like stuff that would have taken a junior associate 10 hours that you know companies are just no longer willing to pay for or only willing to pay for like
00:32:47
Speaker
two of the 10 hours. Like, what does that actually look like? um And so, yeah, it's a little bit more that conversation. In addition to, you know, I think all companies and all functions within companies are being asked to do more with less. And they're also being asked now, how is AI going to help you do more with less?
00:33:04
Speaker
Yeah. um And especially in legal, when you're already kind of um coming up against being seen purely as a cost center within these companies. I think a lot of GCs are thinking about how do we use it to, one, support more of the revenue generating teams.
00:33:20
Speaker
So, for example, something like Spot Draft, it's like, OK, well, if you can cut the average deal time down, right? So like if it hits your commercial counsel's desk and it doesn't take 10 days, but it takes five days, that's meaningful to the business, right?
00:33:35
Speaker
And so, yeah, feel I don't know what you guys have seen as well, but that is like a large part of the conversation that we've seen. Yeah. I'm curious. mean, let's, let's pull on this thread around like ALSPs more broadly. Maybe it strikes me that ai is going to be and accelerant. um I think, mean, we heard a panel today that, that Tom moderated.
00:33:58
Speaker
We heard that the types of roles that in-house teams are going to be hiring for are going to be potentially different. One of the GCs in the panel was talking about hiring. more contract managers as opposed to attorneys, but supplementing them with AI and also being able to turn to ALSPs or from time to time to like super high-end law firm partners, right?
00:34:22
Speaker
For the more specialized talent or advice that he needed. So, I mean, I see this as an accelerant for ALSPs. I guess I'm curious what you think about that, like about the general market. And then also if you have a view on how this is gonna affect law firms.
00:34:38
Speaker
And that's a can of worms, I know. Definitely a can of worms, right? Yeah. So I think the way that I personally see the market shaking out, right, because people always ask us this question, they're like, are you guys a stand in for Cooley? Are you a stand in for Wilson Sincini? Right. And the answer is like oftentimes no. Right. Like the the the super valuable, like bet the company litigation, yes mergers and acquisitions, like whatever the case may be, that is probably always going to live with these big firms. And that is what they're incredibly good at. Right.
00:35:09
Speaker
um But I think there's a lot of work that is going to these firms right now simply because people don't know where else to send it. um And I think a lot of that is going to be moved away from the firms. Right.
00:35:21
Speaker
And I think it's going to go two places. So I think it's probably going to be more ALSPs. Right. So you're going to have these resources. that are oftentimes like a fraction of the price. and Then I think people are also going to be using tools, whether it's like Spot Draft or something else, to be allowing people who maybe don't have a JD, for example, to be like sort of self-navigating or like you know using these like very intelligent guided workflows to do more of this work at scale.
00:35:47
Speaker
Whereas like previously you might have needed like a privacy council to handle some of this work. Now you can maybe pass it off to like a privacy analyst or like a privacy program manager. um So yeah, i think I think that's how it's gonna change a little bit, but there's always gonna be a place for like these big wall firms, right?
00:36:04
Speaker
We talked about your 10-year time horizon, i guess, earlier. Before we get to some fun questions that I like to ask all my guests, I mean, what is what is your, you know, 12-month, 18-month, 24-month time horizon look like? You know where do you hope Legal.io is gonna go over the course of the next year or two?
00:36:23
Speaker
Yeah, I think the next year or two. i mean, ah yeah, I think... um So one of the quotes I really like, right, so Steve Jobs, um he he has a quote that's basically, Apple's success, at least when he was at the helm, was the 99% of things they said no to, right?
00:36:42
Speaker
And so I think um that's another thing that I see, a mistake I feel like I see a lot of founders make, is they start to get traction in one area and they're sort of like, well, let's dive into four more things that are like slightly adjacent, right? and so we get that question about like what does the next 18 to 24 months look like looks like? And I think it's a lot of what it currently looks like. right So we're fortunate to have 60% of FANG companies are currently clients.
00:37:08
Speaker
um And the question that we're asking ourselves is not necessarily how do we roll out a new offering, how do we do XYZ? It's how do we use tools like AI? How do we expand our network to go from 75 to 100,000? How do we balloon that?
00:37:23
Speaker
um so that we can do, we can provide more service to them and our existing offerings, but do it better. All right. This is my sort of closing set of questions. i like to ask all my guests these.
00:37:35
Speaker
and The first one is, what's your favorite part of your day to day? um Favorite part of my day-to-day, is honestly probably when I get to interact with like the candidates and the talent that we placed.
00:37:49
Speaker
It's kind of that example that I mentioned before. like There's just nothing more rewarding than someone who you know was at a company that maybe they didn't feel like super mission-oriented with or like whatever the case may be.
00:38:02
Speaker
And you get to make that phone call and you go to be and you get to be like, you know that app that you use on your phone every single day? You get to go be a part of this team, right? um And I think on the flip side, also working with these teams, right? So getting the opportunity to kind of parachute in, right, and see what they're working on. Because, i mean, again, these companies are doing some of the most innovative work out there, right? Whether it's in cryptocurrencies or self-driving cars or like biotech, right? I mean, the work is just super, super inspiring. And so I love just getting to interact with those people in my day to day.
00:38:39
Speaker
I think this one is kind of fun. It's if you have a professional pet peeve. e Professional pet peeve. Yeah, no, that's a good one. I think honestly, so I think i think the last 10 years, right? So I think everybody has like an entrepreneurial spirit, right? Like whatever that looks like.
00:38:58
Speaker
And i think I think one of my pet peeves is, you know, people sort of talking, are not talking about like what next venture they're going to start, right? But I think it's when people kind of underestimate how hard and how long of a journey it's going to be. Right? And that's probably also influenced by us kind of having been fortunate enough in many regards to work over this you know work on this project for like a variety of years.
00:39:21
Speaker
um But yeah, it's like the founder of NVIDIA, right? Like he was on stage and they were sort of like, yeah, so would you do it again? And he was like, no You know what i mean? He's like, I would think twice, right? And i don't know that I would make any other decision, but like the advice that I give founders is like, if you want to go start a company, if you want to go take a big swing at something, make sure it's because like you cannot do anything else, right? Like make sure it's because like you wake up every single day and you're like, I literally feel like I might die if this doesn't exist, right? Because it's going to take that level of passion and commitment to stick it out during all those really difficult moments.
00:39:58
Speaker
So I don't know if it's a pet peeve, but I feel like there's like this um glorification of entrepreneurship. And obviously you see the really high highs, but there's a lot of really low lows too as well. And so I think it's, um yeah, i just want to make sure people truly understand and they wake up and they're like passionate about that problem.
00:40:15
Speaker
Because when you are, i mean, there's nothing better in the world, right? um But you truly have to have that level of like conviction and passion about it. Is there a book? that you would recommend to our audience. Clearly you read a lot about technology, but it doesn't have to be about tech. It could also be something fun as well.
00:40:34
Speaker
Um, books that I recommend about tech. Yeah, that's a good question. Honestly, I'm more of a blogger. I will say I read a lot of blogs. Um, so I feel like one that I'm really into, like Sam Altman has like a really, really fantastic blog.
00:40:49
Speaker
Yeah. And he just talks a lot about, i mean, what I like about that is oftentimes like what I like to read about is not necessarily, um, oh, this is how we think like this industry might change. But I like to really see sort of like the thoughts behind the people leading the company. So but what what did Steve Jobs think when he was building a company, right? Like what does Sam Altman think during the early days of OpenAI? i And I think the crazy thing about that is you can see it because he has a v blog that's been around for years. um Do you actually go back and read the old entries?
00:41:19
Speaker
um occasionally or it's more like they start they surface in my feed and someone's like oh my gosh you realize he was talking about x right and i think there's just a lot of really interesting lenses on the world um and i like to really deeply understand not just like what was built but like the people who built it My last question for you, ah traditional closing question for my guests, it's if you could look back as on your days as a a young lawyer, right? Like, I mean, maybe for you, like that inflection point right after law school, just getting started, something that you know now that you wish that you'd known back then?
00:42:00
Speaker
I wish i knew that there there's a lot of other like-minded individuals out there. So I think honestly, like one of, um you know, and we're here at the Spot Draft Conference and it's been fantastic because you meet these people that are just so deeply passionate And they're like, I was also in law school wondering why no one taught us how to use ah contract management system yeah or taught us how to like negotiate super basic clauses inside of a commercial agreement.
00:42:29
Speaker
And so, yeah, I think it's really just that you have to go find your sort of community, your tribe of people, and they are out there. I love that. A different answer, something I haven't heard before to that question. That's great.
00:42:40
Speaker
Hannah, thank you so much for joining me for this great conversation. Yeah, thank you for having me. And to all of our listeners, thanks so much for tuning in to this episode of The Abstract, and we hope to see you time.