1 00:00:03,896 --> 00:00:05,611 Gordon, how are you this morning? 2 00:00:05,767 --> 00:00:06,430 I'm doing well, Ted. 3 00:00:06,430 --> 00:00:08,045 Appreciate you having me today. 4 00:00:08,097 --> 00:00:09,778 Yeah, I'm excited. 5 00:00:09,778 --> 00:00:15,742 had Zach on, I guess it was about a year and a half ago, and we had a great conversation. 6 00:00:16,022 --> 00:00:20,727 The Legal Tech Fund is growing, and we're going to talk more about that. 7 00:00:20,727 --> 00:00:22,698 But before we do, let's get you intro'd. 8 00:00:22,698 --> 00:00:26,291 So you're a current partner at TLTF. 9 00:00:26,291 --> 00:00:30,174 You serve on several boards at startups. 10 00:00:30,234 --> 00:00:34,477 And my favorite thing about you is you're a Tidewater, Virginia guy, man. 11 00:00:34,477 --> 00:00:35,804 I'm from Norfolk. 12 00:00:35,804 --> 00:00:36,705 That's right. 13 00:00:36,705 --> 00:00:39,007 Virginia Beach native uh myself. 14 00:00:39,007 --> 00:00:44,712 uh Born and raised, I have uh two young kids and a family down here at the beach. 15 00:00:44,712 --> 00:00:50,517 And uh we love raising our kids here in Hampton Roads and Tidewater. 16 00:00:50,517 --> 00:00:59,125 And certainly in the world we live in today, you can do that and then also get on a plane the next day or whenever you need to see everyone. 17 00:00:59,125 --> 00:01:01,197 uh we love living at the beach. 18 00:01:01,390 --> 00:01:02,312 That's awesome. 19 00:01:02,312 --> 00:01:10,709 Well, why don't you tell everyone a little bit about who you are, what you do, where you do it, and just a little bit about your background. 20 00:01:10,725 --> 00:01:11,275 Yeah, sure. 21 00:01:11,275 --> 00:01:15,176 ah So as you mentioned, I'm a partner at the Legal Tech Fund. 22 00:01:15,276 --> 00:01:16,076 I'm an investor. 23 00:01:16,076 --> 00:01:18,037 ah That's my background. 24 00:01:18,037 --> 00:01:24,479 ah Undergraduate degree in finance, started my career on Wall Street, working for a large investment bank. 25 00:01:24,479 --> 00:01:34,942 And then since that time, I've been investing, kind of increasingly going earlier stage ah as an investor, finally to where I am today and where I have the most fun. 26 00:01:34,942 --> 00:01:37,012 ah I like getting my hands dirty. 27 00:01:37,012 --> 00:01:39,493 I like working with entrepreneurs and founders. 28 00:01:39,591 --> 00:01:41,553 I like a little bit of meat on the bone. 29 00:01:41,553 --> 00:01:45,216 There's an idea, there's a product, there's hopefully a little bit of revenue. 30 00:01:45,216 --> 00:01:55,794 the idea of rolling up our sleeves as an investor and partner to help an entrepreneur accomplish a goal, achieve a dream, ah it's really rewarding and fun. 31 00:01:55,794 --> 00:02:00,587 And the best part about it is, as an investor, you're mutually aligned there, right? 32 00:02:00,587 --> 00:02:08,533 And so we can spend all of our time focused on making our entrepreneurs as successful as possible and as a byproduct will benefit. 33 00:02:08,533 --> 00:02:09,368 uh 34 00:02:09,368 --> 00:02:14,890 It's that journey and that growth that I really enjoy, ah which is where I am today here at the Legal Tech Fund. 35 00:02:15,554 --> 00:02:15,994 Yeah. 36 00:02:15,994 --> 00:02:20,468 mean, uh, so info dash is a portfolio company of TLTF. 37 00:02:20,468 --> 00:02:23,000 We've had a great experience working with you guys. 38 00:02:23,000 --> 00:02:26,463 Um, yeah, I mean, we didn't, we didn't need the money. 39 00:02:26,463 --> 00:02:30,386 Um, you know, we, our licensing model is very cashflow friendly. 40 00:02:30,386 --> 00:02:45,458 Um, more money never hurts, but it was really the intangibles that you guys bring in terms of, you know, the Rolodex, the visibility that you have in. 41 00:02:45,644 --> 00:02:58,386 what's going on in the space and can really give us feedback on, we're heading down this path that may be a very crowded space or soon to be very crowded. 42 00:02:58,526 --> 00:03:02,971 And those intangibles, I think, are really important. 43 00:03:02,971 --> 00:03:11,158 So probably most people who listen here know TLTF, but what's the elevator pitch for the folks that don't? 44 00:03:11,206 --> 00:03:17,831 Sure, I'll try to keep it very brief, but ah I like to say the Legal Tech Fund, our name is not very sexy. 45 00:03:17,831 --> 00:03:23,395 I don't know if my partner Zach would like me saying that, but I think it's true, but it is very intentional. 46 00:03:23,395 --> 00:03:26,697 ah We want people to know exactly who we are. 47 00:03:26,777 --> 00:03:34,002 And we are the first and only investment firm exclusively focused on investing at that intersection of legal and technology. 48 00:03:34,002 --> 00:03:39,718 ah Fundamentally believe that technology is changing the practice of law. 49 00:03:39,718 --> 00:03:50,964 And then certainly some things have happened since the firm was founded in 2020, COVID being one of them, uh generative AI being another thing that has kind of created this huge 50 00:03:50,964 --> 00:03:52,075 industry tailwinds. 51 00:03:52,075 --> 00:03:57,178 But fundamentally, we want to be backing the entrepreneurs and founders that are disrupting the world of law. 52 00:03:57,178 --> 00:03:58,349 And that's simply who we are. 53 00:03:58,349 --> 00:04:06,583 We do that at the earliest stages, pretty much pre-SEED, SEED, Series A companies, and working with founders like yourselves to help you be successful. 54 00:04:07,698 --> 00:04:14,144 And um did you guys get lucky with uh or was this intentional? 55 00:04:14,144 --> 00:04:17,457 I'm leaning in the camp that you guys got lucky with. 56 00:04:17,457 --> 00:04:24,212 there is, so the legal tech fund's been around about four years-ish? 57 00:04:25,113 --> 00:04:25,494 Yeah. 58 00:04:25,494 --> 00:04:25,960 uh 59 00:04:25,960 --> 00:04:27,527 fund was in 2021. 60 00:04:28,054 --> 00:04:32,320 So the timing could not have been any better with... 61 00:04:33,222 --> 00:04:35,865 I mean maybe, maybe you did. 62 00:04:35,906 --> 00:04:38,412 If you did, hats off to you, but... 63 00:04:38,412 --> 00:04:47,338 I think we're certainly very uh fortunate for, um well, look, I think our firm was founded on the thesis that technology was changing the industry. 64 00:04:47,338 --> 00:04:56,125 And you could see it happening at that point in time, whether or not it's law firms, corporate legal, or even consumers, like people's willingness to leverage technology as 65 00:04:56,125 --> 00:04:57,696 they were thinking about legal services. 66 00:04:57,696 --> 00:05:00,087 I think that motion had started. 67 00:05:00,087 --> 00:05:05,351 um But there's no doubt that a little bit of luck here mixed in. 68 00:05:05,731 --> 00:05:15,218 has helped support some really nice tailwinds and frankly creates an opportunity for entrepreneurs to do something pretty special and things that maybe weren't uh available to 69 00:05:15,218 --> 00:05:16,920 them a few years ago. 70 00:05:16,920 --> 00:05:25,887 And so it's uh just an incredible time in this space and we certainly want to be uh as helpful as possible to these entrepreneurs that are taking advantage of this new 71 00:05:25,887 --> 00:05:26,957 opportunity. 72 00:05:27,234 --> 00:05:28,807 I'd rather be lucky than good, 73 00:05:28,807 --> 00:05:30,007 That's right. 74 00:05:30,007 --> 00:05:32,787 No one ever accomplished anything good without a little bit of luck along the way. 75 00:05:32,787 --> 00:05:34,463 So we'll take it. 76 00:05:35,070 --> 00:05:40,410 all day and if you have bad luck, it's not always going to work out in your favor. 77 00:05:41,029 --> 00:05:47,310 what is the investment thesis there at TLTF? 78 00:05:47,676 --> 00:05:48,816 Yeah. 79 00:05:48,816 --> 00:05:52,517 So we broadly want to invest across legal. 80 00:05:52,517 --> 00:05:57,118 We view this as a trillion dollar global legal services market. 81 00:05:57,118 --> 00:06:03,050 We'll invest domestically, we'll invest internationally, we'll invest across the major end markets of legal. 82 00:06:03,050 --> 00:06:05,700 And so we do think about law firm related tech. 83 00:06:05,700 --> 00:06:09,561 We think about corporate related tech and we think about consumer related tech. 84 00:06:09,561 --> 00:06:13,382 And then the reality is I think you can step up even a little bit further than that. 85 00:06:13,382 --> 00:06:16,453 We think of the modern world we live in today. 86 00:06:16,559 --> 00:06:20,441 Legal is the one functional area that touches every other functional area. 87 00:06:20,542 --> 00:06:25,655 As an enterprise, a modern enterprise, you can't sell a new customer. 88 00:06:25,655 --> 00:06:27,407 can't sign a new contract. 89 00:06:27,407 --> 00:06:31,760 You can't put out a piece of marketing collateral, HR, finance. 90 00:06:31,760 --> 00:06:32,480 You get on the list. 91 00:06:32,480 --> 00:06:36,013 Like legal is going to be integrated into every functional area. 92 00:06:36,013 --> 00:06:38,184 And so that's where we want to be investing. 93 00:06:38,184 --> 00:06:44,699 It's the entrepreneurs, you know, disrupting at those, those edges of, of all these different functional areas. 94 00:06:44,699 --> 00:06:47,862 the lens with which we take to it ah is legal. 95 00:06:47,862 --> 00:06:51,735 And that's our view and how we plan on being as helpful as possible. 96 00:06:51,735 --> 00:07:01,755 And you kind of alluded to it, we can get into it, but ah we have a nice platform here that's uh friends of the firm, investors, strategic's all kind of hanging around in this 97 00:07:01,755 --> 00:07:03,426 ecosystem we're trying to bring together. 98 00:07:03,426 --> 00:07:11,363 And we can kind of leverage that to be as helpful as possible for these people that have interesting ideas of where legal intersects other things. 99 00:07:12,054 --> 00:07:14,976 Yeah, the timing was outstanding. 100 00:07:14,976 --> 00:07:18,538 And um I've been in this space for almost 20 years. 101 00:07:18,538 --> 00:07:24,481 And we're to talk about this catalyst article that I thought did a great job talking about. 102 00:07:25,081 --> 00:07:26,662 they mentioned us, which was great. 103 00:07:26,662 --> 00:07:31,165 But even aside from that, was good on its own merits. 104 00:07:31,325 --> 00:07:37,669 But they had a hilarious quote in there, which was, if Rip Van Winkle woke up, the only thing he'd recognize was a law firm. 105 00:07:37,669 --> 00:07:40,482 um And that is true. 106 00:07:40,482 --> 00:07:41,683 That is a true statement. 107 00:07:41,683 --> 00:07:43,544 Now that is changing. 108 00:07:43,545 --> 00:07:56,335 But I thought what the Catalyst article did a good job of is describing the speed or lack of speed at which law firms have adopted new technologies. 109 00:07:56,335 --> 00:08:09,466 Like when I first got into legal tech, I very naively thought that I could uh help move things along by doing thought leadership and highlighting 110 00:08:09,670 --> 00:08:15,633 This was when the cloud was still relatively new and um man, it didn't work. 111 00:08:15,633 --> 00:08:19,095 ah I beat my head against the wall for a really long time. 112 00:08:19,095 --> 00:08:21,176 I was just, I was just too early. 113 00:08:21,217 --> 00:08:23,318 Now fast forward. 114 00:08:23,318 --> 00:08:25,899 The good thing was that got me really prepped. 115 00:08:25,899 --> 00:08:34,504 So when we were a services company as Acrowire, we were doing like bespoke internet and extranet development and we were really pushing towards the cloud. 116 00:08:34,504 --> 00:08:37,998 We would always get pulled back on prem and then 117 00:08:37,998 --> 00:08:42,398 Finally, in 2018, 2019, we said, you know what? 118 00:08:42,398 --> 00:08:44,358 We're going to roll the dice here. 119 00:08:44,358 --> 00:08:49,358 And we started working on InfoDash, which was cloud only. 120 00:08:49,358 --> 00:08:55,758 And at that time, there were hardly any firms that were in SharePoint Online and M365. 121 00:08:55,758 --> 00:09:01,278 Maybe they had messaging in the cloud, but that's it. 122 00:09:01,398 --> 00:09:03,378 And there are still. 123 00:09:04,090 --> 00:09:13,699 I can't say that there are still a year ago there were still firms that were wearing the tag of we're going to be the last firm to go to the cloud as a badge of honor. 124 00:09:13,699 --> 00:09:24,889 You now you don't look very smart by doing that especially with AI it's really hard to it's really hard to leverage AI at its full capacity if everything is on-prem. 125 00:09:24,889 --> 00:09:26,030 Would you agree? 126 00:09:26,055 --> 00:09:26,635 I mean, that's right. 127 00:09:26,635 --> 00:09:30,546 And that's part of the thesis of investing in you and your business. 128 00:09:30,546 --> 00:09:35,088 And you can kind of go down the line of a number of our portfolio companies. 129 00:09:35,088 --> 00:09:46,221 When you think about all the business of law side and you think about the infrastructure within a law firm, couldn't agree more with you and your statement of ah the badge of 130 00:09:46,221 --> 00:09:49,542 honor historically, but that is changing and it's changing quickly. 131 00:09:49,542 --> 00:09:52,483 ah It doesn't mean it happens overnight. 132 00:09:53,688 --> 00:09:58,799 you know, if you want to make a prediction, I'm sure there'll still be plenty of firms on-prem five years from now. 133 00:09:58,799 --> 00:10:04,169 Big, huge, brand-name law firms that we would all think of as some of the best and brightest law firms in the world. 134 00:10:04,169 --> 00:10:07,722 And it's not to uh talk disparagingly about anyone. 135 00:10:07,722 --> 00:10:18,615 It's the reality of these huge Frankensteins of infrastructure that have been built and these on-prem systems that work for the way that these law firms do business today. 136 00:10:18,663 --> 00:10:22,363 But that promise of AI, that's been the catalyst. 137 00:10:22,363 --> 00:10:24,003 That is what's changing everything. 138 00:10:24,003 --> 00:10:34,763 And really you need that interconnectivity tissue where your data can be in a central place and you can build on top of that in a compliant manner and all those types of 139 00:10:34,763 --> 00:10:35,423 things. 140 00:10:35,423 --> 00:10:38,863 But that's where the promise of AI really can deliver. 141 00:10:39,163 --> 00:10:43,683 And there's some really interesting stuff being built now, but if you, what's the good of it? 142 00:10:43,683 --> 00:10:47,183 If you can only get 80 % of the way there, 85 % of the way there. 143 00:10:47,183 --> 00:10:56,191 especially for a lot of clients or customers that feel good about the way things are working today generally. 144 00:10:56,191 --> 00:11:03,187 you know, I think, and we can talk about, you know, maybe what makes for a good startup or the things that we look for or not. 145 00:11:03,187 --> 00:11:06,939 And you talked about the industry and its pace of change. 146 00:11:07,020 --> 00:11:10,583 You do have to remember that, you know, two things are really important here. 147 00:11:10,583 --> 00:11:15,617 One, if we want to talk about law firms specifically, these are partnerships at the end of the day. 148 00:11:15,631 --> 00:11:19,052 And yes, they are getting more organized from a top-down perspective. 149 00:11:19,052 --> 00:11:24,335 And, you know, I'm not sure if the role CIO or COO existed 10 years ago. 150 00:11:24,335 --> 00:11:27,756 And if they did, they certainly were all held by attorneys. 151 00:11:27,756 --> 00:11:28,856 And that is changing. 152 00:11:28,856 --> 00:11:34,159 And so there's increasingly some top-down uh organization, but these are partnerships. 153 00:11:34,159 --> 00:11:37,920 each partnership takes time to make decisions. 154 00:11:38,180 --> 00:11:43,842 And then also a reality of uh it's been an incredibly lucrative period of time for law firms. 155 00:11:43,842 --> 00:11:45,123 And to go in and 156 00:11:45,732 --> 00:11:51,647 as a startup, pitch them on why you're going to help make them better when things are pretty good for them right now. 157 00:11:51,647 --> 00:11:59,364 So there are some forces that have to be appreciated as you think about innovating and disrupting in this space. 158 00:11:59,810 --> 00:12:06,515 Yeah, I mean, as Richard Susskin says, it's hard to tell a roomful of millionaires they're doing it wrong, you know? 159 00:12:06,856 --> 00:12:14,563 And I actually think that the partnership model is a major impediment to innovation and scale. 160 00:12:14,563 --> 00:12:16,434 And it's not just the partnership model. 161 00:12:16,434 --> 00:12:19,207 It's the fact that there are cash basis accounting. 162 00:12:19,207 --> 00:12:24,391 There's very little um adoption of R &D. 163 00:12:24,391 --> 00:12:26,795 um So if you look at it... 164 00:12:26,795 --> 00:12:31,628 Partnerships by themselves aren't necessarily limiting the big four their partnerships. 165 00:12:31,628 --> 00:12:41,034 So, and they range anywhere from Deloitte at the high end around 90 billion and um KPMG at the bottom end at 40, 45 billion. 166 00:12:41,034 --> 00:12:51,360 So they've managed to scale, but the largest law firm on earth is K &E and they're under 8 billion wouldn't even qualify for the fortune 500 if they were a public company, which 167 00:12:51,360 --> 00:12:52,300 they're not. 168 00:12:52,300 --> 00:12:53,941 So like, 169 00:12:53,977 --> 00:13:00,762 You can scale a partnership, it has to be, think it's the, alluded to it. 170 00:13:00,762 --> 00:13:09,448 It's the way that law firms empowering non-lawyers and bringing in professional management has been a challenge. 171 00:13:09,448 --> 00:13:10,727 There's been friction to that. 172 00:13:10,727 --> 00:13:12,407 Well, it's interesting. 173 00:13:12,407 --> 00:13:17,747 I don't know how much time you have reserved for us today, but we could now, I'm now convinced we could spend the rest of the day. 174 00:13:17,747 --> 00:13:25,607 Like the topic you just brought up about the part of comparing law firms to the big four accounting. 175 00:13:26,227 --> 00:13:28,707 And we put consulting in that bucket too. 176 00:13:28,707 --> 00:13:35,167 think there are fantastic analogies as you think about where this industry goes in the next five or 10 years. 177 00:13:35,167 --> 00:13:38,022 And you think about the role that technology plays. 178 00:13:38,022 --> 00:13:46,874 what that can do from a service delivery perspective, then means the role of an attorney will change and it will increasingly be outward facing. 179 00:13:46,874 --> 00:13:58,947 It will increasingly be more client focused and that type of consultative approach, results driven is where we think the industry is heading and it's fascinating and it's 180 00:13:58,947 --> 00:14:05,979 gonna be bumpy roads to get there, but we think the best law firms in the world are those that are gonna take that model and approach. 181 00:14:05,979 --> 00:14:16,895 from maybe big four, maybe some of largest consulting firms in the world and think about how you deliver a full scale model for your clients that is results oriented. 182 00:14:16,895 --> 00:14:22,177 And I think it's fascinating uh what this industry will look like in the journey to get to that point. 183 00:14:22,805 --> 00:14:30,011 Yeah, we are getting ahead of ourselves because there's so many things I want to say right now, um but I'm going to hold them off because we got a killer agenda here. 184 00:14:30,011 --> 00:14:33,734 um So what do you guys look for in a startup? 185 00:14:33,734 --> 00:14:37,878 Let's kind of uh reel that back. 186 00:14:37,878 --> 00:14:46,265 like um we know obviously a legal focus um and we you mentioned the stage, but what are some other attributes? 187 00:14:46,265 --> 00:14:50,028 mean, we are we are kind of AI adjacent. 188 00:14:50,028 --> 00:14:51,649 We're not at our core. 189 00:14:51,649 --> 00:14:52,810 That's not what we do. 190 00:14:52,810 --> 00:15:07,561 uh We enable, so InfoDash for people that don't know, it's an internet extranet platform and uh it is built on M365 and Azure and we deploy in the client's tenant, which, and we 191 00:15:07,561 --> 00:15:18,749 have a component called integration hub that uh taps into all the backend data sources that a law firm uses and then presents a unified security trimmed. 192 00:15:19,177 --> 00:15:28,426 API that respects ethical walls that they can then light up all of Microsoft services like Azure AI search, Azure open AI. 193 00:15:28,426 --> 00:15:32,670 So we enable law firms to take advantage and co-pilot. 194 00:15:32,670 --> 00:15:42,058 um We enable law firms to leverage the capabilities that Microsoft provides, but we're not really like an AI company, so to speak. 195 00:15:42,279 --> 00:15:45,104 what are the key ingredients that you look for? 196 00:15:45,104 --> 00:15:46,985 Yeah, you you hit on something there. 197 00:15:46,985 --> 00:15:55,089 You talked about like the enablement of what you allow a law firm to do to leverage Microsoft and all of its capabilities. 198 00:15:55,089 --> 00:16:00,932 Like we would view that as a wedge or like sometimes referred to as like the tippy point of the spear. 199 00:16:00,932 --> 00:16:09,997 Like we want to see a company that has something that is a clear right to win, uh driving a value prop for a customer. 200 00:16:09,997 --> 00:16:14,811 And they understand that intimately and they want to drive it home and keep driving it home. 201 00:16:14,811 --> 00:16:23,905 And there's, you know, we're investing at the earliest stages and, know, we love thinking about, um, you know, as venture investors, businesses that can be a platform and can take 202 00:16:23,905 --> 00:16:24,615 over the world. 203 00:16:24,615 --> 00:16:25,216 And that's great. 204 00:16:25,216 --> 00:16:30,478 And we, hope we can invest in many of those, businesses over, you know, my career, our careers. 205 00:16:30,478 --> 00:16:40,797 Um, that being said, the term platform gets overused, you know, an infinite amount in venture and so many businesses never really reached that promise of being a platform. 206 00:16:40,797 --> 00:16:41,927 And that's okay. 207 00:16:41,927 --> 00:16:50,490 So we want to see if there's a clear right and right to win in a wedge as to why you can sell a customer, why you can drive a value prop for someone. 208 00:16:50,511 --> 00:16:56,873 I'd say tech, we're certainly looking for some type of differentiated technology solution, access to data. 209 00:16:56,913 --> 00:16:58,434 You brought up AI. 210 00:16:58,434 --> 00:17:01,075 Again, we can talk all day about that as well. 211 00:17:01,135 --> 00:17:01,976 You know, it's interesting. 212 00:17:01,976 --> 00:17:10,225 A uh couple of years ago, I think there was, as AI was still becoming kind of commercially available. 213 00:17:10,225 --> 00:17:16,059 We started seeing AI pop up and pitch decks and it was people throwing it out there to get the AI bump. 214 00:17:16,159 --> 00:17:22,604 The reality is in the world we live in today, if you're not leveraging it in some form or fashion, you're putting yourself in extreme disadvantage. 215 00:17:22,604 --> 00:17:28,468 It doesn't have to be the front end of the platform as you kind of acknowledge, like that's not exactly who you are. 216 00:17:28,468 --> 00:17:34,392 But if you're not weaving that into your DNA as a firm, like you're an extreme disadvantage. 217 00:17:34,392 --> 00:17:37,534 The worst this technology will ever be is what it is today. 218 00:17:37,534 --> 00:17:39,462 It's going to be better tomorrow. 219 00:17:39,462 --> 00:17:48,000 And if you're not thinking about how you leverage AI, at least at a bare minimum internally to drive efficiencies, it's probably not a technology solution that we're super 220 00:17:48,000 --> 00:17:50,522 jazzed about partnering with. 221 00:17:50,522 --> 00:18:01,031 um You know, I think we talked a little bit about the legal industry and some of the heritage and some of the status quo. 222 00:18:01,031 --> 00:18:05,925 And so we do want to make sure that we're investing in founders that are building businesses that understand. 223 00:18:06,075 --> 00:18:09,506 that you have to fit within typically some type of distribution model. 224 00:18:09,506 --> 00:18:14,307 You have to fit within some type of historical way uh to enter these firms. 225 00:18:14,307 --> 00:18:20,639 And, you know, we love the, the brash confidence of we're going to change everything and we're going to change the model. 226 00:18:20,679 --> 00:18:24,420 can be a long, lonely road to take that path. 227 00:18:24,420 --> 00:18:34,133 And so, uh you know, a little healthy bit of that is great, but also recognizing that sometimes you can supercharge your growth by weaving into an existing distribution layer. 228 00:18:34,133 --> 00:18:35,143 And so we want to think. 229 00:18:35,143 --> 00:18:38,403 want to make sure someone's thought about that. 230 00:18:38,403 --> 00:18:40,303 And typically that lends itself to the human side. 231 00:18:40,303 --> 00:18:42,063 And that means founder market fit. 232 00:18:42,063 --> 00:18:47,123 Someone that understands that, what they're dealing with here in legal. 233 00:18:47,243 --> 00:18:50,363 know, and I think I'd certainly be doing myself a disservice. 234 00:18:50,363 --> 00:18:57,803 at the end of the day, like we're investing in, in entrepreneurs that have an idea, maybe a little bit of traction, a product. 235 00:18:58,003 --> 00:19:02,919 It's, it's, you know, I've used the horse, the horse racing analogy, you got the track. 236 00:19:02,919 --> 00:19:04,419 You got the horse, you got the jockey. 237 00:19:04,419 --> 00:19:09,759 At the end of the day, we're ready to check to a jockey to help get this horse around the track. 238 00:19:10,539 --> 00:19:13,639 there's a reality of that. 239 00:19:13,639 --> 00:19:22,299 And there's also not just backing a great entrepreneur and puts you in that bucket of elite founders in our portfolio. 240 00:19:22,459 --> 00:19:24,579 it's also life is too short. 241 00:19:24,579 --> 00:19:26,439 You want to work with the people you want to work with. 242 00:19:26,439 --> 00:19:32,251 And so there's an aspect here as well of just getting good people around the table, people we trust. 243 00:19:32,251 --> 00:19:40,499 people we wanna be in the same room with, people we wanna have dinner with and things like that, and people that we get excited about waking up every day to try to make you as 244 00:19:40,499 --> 00:19:41,921 successful as possible. 245 00:19:42,124 --> 00:19:42,444 Yeah. 246 00:19:42,444 --> 00:19:43,684 And that goes both ways. 247 00:19:43,684 --> 00:19:55,297 I mean, from a founder perspective too, and you know, I don't take it for granted that we're, um, in a place where we don't have immediate, like kind of series a type needs. 248 00:19:55,297 --> 00:19:58,678 Like I feel very fortunate for that and I know it's not the norm. 249 00:19:58,678 --> 00:20:00,118 Yeah, I do. 250 00:20:00,158 --> 00:20:09,401 And you know, when I look at like, I get to, I get no joke, 15 to 20 emails a week from VCs. 251 00:20:09,401 --> 00:20:11,195 It is, it's crap. 252 00:20:11,195 --> 00:20:12,552 all your days responding to this. 253 00:20:12,552 --> 00:20:14,861 You can tell them to send them to my way. 254 00:20:15,681 --> 00:20:16,361 them at all. 255 00:20:16,361 --> 00:20:17,261 I can't. 256 00:20:17,261 --> 00:20:22,361 I could fill up my calendar with just conversations and we don't need money. 257 00:20:22,361 --> 00:20:24,941 So I think that makes them try even harder. 258 00:20:26,021 --> 00:20:36,281 initially I thought why we were getting hit up so much was because of our growth is very visible on LinkedIn. 259 00:20:36,281 --> 00:20:39,061 I mean, you just look at our head count chart, right? 260 00:20:39,301 --> 00:20:39,893 Yeah. 261 00:20:39,893 --> 00:20:43,765 know, I'm surprised more founders don't take advantage of it. 262 00:20:43,765 --> 00:20:55,448 uh Honestly, and obviously like we're sitting here today, like you are building this interconnected tissue within the industry, your presence on LinkedIn, the employee 263 00:20:55,448 --> 00:21:00,169 account, as you're announcing partnerships, as you're announcing customers, I mean, it's visible. 264 00:21:00,169 --> 00:21:03,050 ah And that success breeds on itself. 265 00:21:03,050 --> 00:21:05,031 And so uh keep doing it. 266 00:21:05,031 --> 00:21:05,611 We love it. 267 00:21:05,611 --> 00:21:09,323 Yeah, people, man, people, I don't know why it's not hard. 268 00:21:09,323 --> 00:21:14,405 didn't, I was talking to um Stephanie Gudos from Gunderson. 269 00:21:14,405 --> 00:21:21,637 She's got a great social media presence and we were kind of comparing notes and she's like, I didn't, I never had a plan. 270 00:21:21,637 --> 00:21:24,169 I just jumped in and started doing, was like, me too. 271 00:21:24,169 --> 00:21:26,309 Like I didn't have a plan with this. 272 00:21:26,309 --> 00:21:29,691 Like I just, I just jumped in and said, you know what? 273 00:21:29,691 --> 00:21:35,659 I'm going to start writing about things that I'm deep on that I'm passionate about and I'm going to be authentic. 274 00:21:35,659 --> 00:21:37,171 and going to keep at it. 275 00:21:37,713 --> 00:21:38,374 That was it. 276 00:21:38,374 --> 00:21:39,210 There was no... 277 00:21:39,210 --> 00:21:41,762 in those last two pieces that you do exceptionally well. 278 00:21:41,762 --> 00:21:44,575 There is an aspect of just being open and vulnerable about this. 279 00:21:44,575 --> 00:21:51,190 And we can say the same about the things that we're doing and the willingness to get on a forum like this. 280 00:21:51,190 --> 00:21:52,571 just, don't have all the answers. 281 00:21:52,571 --> 00:21:53,202 Here's what we think. 282 00:21:53,202 --> 00:21:54,273 We're not sure. 283 00:21:54,273 --> 00:22:04,441 And they're informed by these things, but we rely on the help and expertise of everyone in our network and then the wherewithal just to keep at it. 284 00:22:04,441 --> 00:22:07,883 I mean, think those two things are all the difference in the world. 285 00:22:08,023 --> 00:22:12,655 Pushing a flywheel, man, you gotta keep pushing it if you wanna generate momentum. 286 00:22:12,755 --> 00:22:17,225 All right, let's talk quickly about the Legal Tech Lab and then I wanna get into the Law Firm 2.0. 287 00:22:17,225 --> 00:22:18,557 That's the really fun stuff. 288 00:22:18,557 --> 00:22:22,259 But the Legal Tech Lab is really interesting to me. 289 00:22:22,259 --> 00:22:26,881 It almost feels like kind of a Y Combinator for Legal Tech. 290 00:22:26,881 --> 00:22:27,301 Is it? 291 00:22:27,301 --> 00:22:28,601 Is that what it is? 292 00:22:28,919 --> 00:22:29,540 That's right. 293 00:22:29,540 --> 00:22:31,381 It's it's very interesting. 294 00:22:31,381 --> 00:22:45,044 um So and I'll we will I'll save the ploy on uh Law Firm 2.0 because that is a key theme of what we're looking for in in the labs program, but um Just at a high level. 295 00:22:45,044 --> 00:22:46,017 Yes, it is. 296 00:22:46,017 --> 00:22:50,440 It's a program um Some have kind of coined is a little bit of an accelerator. 297 00:22:50,440 --> 00:22:54,299 I'm not sure we know exactly what we want to call from that perspective 298 00:22:54,299 --> 00:22:55,449 But it is a program. 299 00:22:55,449 --> 00:23:00,122 It's a platform that allows us to work with the earliest stage of entrepreneurs. 300 00:23:00,122 --> 00:23:12,527 Those that have an idea, a deck, they have a thesis of something that they think can truly disrupt something in kind of the world we live in today of legal. 301 00:23:12,547 --> 00:23:19,571 And it gives us an opportunity to work with those entrepreneurs uh to bring our network of advisors around the table. 302 00:23:19,571 --> 00:23:20,831 um 303 00:23:21,157 --> 00:23:28,552 And then we already kind of announced some uh that are working in the labs program with us, as well as there's a host of others that will be announced over time. 304 00:23:28,552 --> 00:23:30,654 But this is a, it's programmatic. 305 00:23:30,654 --> 00:23:41,472 It allows us to quickly write a small check, get on the inside ah and help these entrepreneurs leverage some of our resources to hopefully get to that stage where yes, we 306 00:23:41,472 --> 00:23:45,625 want to back up the truck, write a meaningful, you know, a more meaningful check. 307 00:23:45,625 --> 00:23:47,486 ah But we think it's going to be great. 308 00:23:47,486 --> 00:23:48,872 and, uh 309 00:23:48,872 --> 00:23:50,792 You know, we're confident it's going to be successful. 310 00:23:50,792 --> 00:23:58,932 We're confident we're going to help, you know, seed, if you want to call that some incredible businesses, but we also know it's going to be, um, it's going to be great for 311 00:23:58,932 --> 00:23:59,932 the industry. 312 00:24:00,132 --> 00:24:02,812 Um, maybe some of those people that weren't willing to take that risk. 313 00:24:02,812 --> 00:24:12,852 don't really know how to go out and raise capital yet, but Hey, in a very short little application process, a couple of interviews, is there a capacity in which we could, um, 314 00:24:12,852 --> 00:24:15,412 provide our platform to Bayer to help these entrepreneurs? 315 00:24:15,412 --> 00:24:18,119 And yes, you use the analogy of YC. 316 00:24:18,119 --> 00:24:22,939 We think very highly of Y Combinator, as do I think most people. 317 00:24:22,939 --> 00:24:25,819 They've built a very special model. 318 00:24:25,819 --> 00:24:32,819 This is not necessarily our take on it, but it's a version of it, and it's highly legal specific as a reminder. 319 00:24:32,819 --> 00:24:41,359 So the great thing is that with every single one of our businesses that comes through labs, they benefit from every other investment we've made over the history of our firm. 320 00:24:41,359 --> 00:24:45,639 And all of this knowledge and expertise compounds on itself. 321 00:24:45,659 --> 00:24:49,761 such that our ability to be helpful for the next one is amplified. 322 00:24:50,002 --> 00:24:51,943 we're really pumped, we're excited. 323 00:24:51,943 --> 00:25:01,428 think um within Kid Junon, I think we had uh over 100 applications after like 72 hours of launching. 324 00:25:01,428 --> 00:25:04,650 ah And uh we're kind of off to the races. 325 00:25:04,650 --> 00:25:07,351 It continues to compound from there. 326 00:25:07,501 --> 00:25:09,181 Very cool, Very cool. 327 00:25:09,181 --> 00:25:10,321 Well, let's talk about law. 328 00:25:10,321 --> 00:25:12,321 We're just over the halfway point. 329 00:25:12,321 --> 00:25:14,861 I want to talk about law firm 2.0. 330 00:25:14,861 --> 00:25:18,121 So I've been writing about big law 2.0. 331 00:25:18,121 --> 00:25:24,441 I think I coined the term, but I'm sure somebody used it before me, but I've been really latched. 332 00:25:24,441 --> 00:25:25,441 I like it too. 333 00:25:25,441 --> 00:25:27,801 Let's say I invented it. 334 00:25:28,461 --> 00:25:36,576 But I've been writing about this because it's something I think about very deeply because we are 100 % of our business is dependent on 335 00:25:36,576 --> 00:25:47,351 large law firms and how successful or not they are in making this transition to what's coming next is also going to impact our success. 336 00:25:47,492 --> 00:25:47,922 Right. 337 00:25:47,922 --> 00:25:58,697 So, um, I see lots of barriers, uh, to getting to where we need, ultimately need to go like fundamental foundational barriers. 338 00:25:58,697 --> 00:26:04,760 talked a little bit about, the partnership model and cash basis accounting and R and D being a foreign concept. 339 00:26:04,760 --> 00:26:06,341 Um, 340 00:26:06,889 --> 00:26:19,132 I also think that the, what we were talking about with professional management, um, I, posted a blueprint, uh, for big law 2.0 how to transition. 341 00:26:19,132 --> 00:26:20,829 And I think it's a good idea. 342 00:26:20,829 --> 00:26:23,473 I didn't, I didn't come up with it myself. 343 00:26:23,473 --> 00:26:31,336 I stole it from somebody who was talking about it in a different context, but it's essentially where a law firm spins up a C corp. 344 00:26:31,336 --> 00:26:36,997 Uh, and when I say spin up, mean, separate entity, not a wholly owned subsidiary separate entity. 345 00:26:37,193 --> 00:26:49,918 and starts investing maybe 20 % of net proceeds into building out tech-enabled legal services, a delivery machine within that. 346 00:26:49,978 --> 00:27:03,774 And what I think the C-Corp model gives that the current state doesn't is, well, A, you typically have lot of legacy. 347 00:27:03,774 --> 00:27:04,725 There's retirement. 348 00:27:04,725 --> 00:27:06,085 uh 349 00:27:06,453 --> 00:27:09,775 obligations associated with the existing firm. 350 00:27:09,775 --> 00:27:15,018 There's all the decision-making in a traditional C-corp. 351 00:27:15,018 --> 00:27:23,843 You've got investors that elect a board that install and hold accountable management, and you have decision-making that happens differently. 352 00:27:23,843 --> 00:27:28,024 And that management layer is empowered. 353 00:27:28,165 --> 00:27:29,886 And it won't be lawyers. 354 00:27:29,886 --> 00:27:36,073 mean, there may be some lawyers in there, but it won't be exclusively lawyers like much of leadership is today. 355 00:27:36,073 --> 00:27:37,416 in big law. 356 00:27:37,416 --> 00:27:39,300 yeah, I write about it a lot. 357 00:27:39,300 --> 00:27:43,919 um I thought that catalyst article did a really good job um writing it. 358 00:27:43,919 --> 00:27:48,037 What's your take on law firm 2.0? 359 00:27:48,274 --> 00:27:51,945 Yeah, and it's fascinating. 360 00:27:51,945 --> 00:27:56,277 It's what we spend the preponderance of our days thinking about here at the Legal Tech Fund. 361 00:27:56,277 --> 00:27:59,888 It's really what we think the future of the industry is. 362 00:27:59,888 --> 00:28:08,472 And I think the line that you took us down there was relative to, call it big law, and how they think about getting to the future. 363 00:28:08,472 --> 00:28:10,892 And I think it's going to be fascinating to see that journey. 364 00:28:10,892 --> 00:28:17,835 Those that are willing to make the investment, and you talked about maybe tactically some of the things they could do. 365 00:28:18,167 --> 00:28:28,522 I think it's about weaving modern technology into the fabric of what they do to try to think through how do you deliver for clients in a world five years from now where their 366 00:28:28,522 --> 00:28:31,873 needs and wants are different and their expectations are far different. 367 00:28:31,913 --> 00:28:33,994 And I think it's going to be interesting. 368 00:28:33,994 --> 00:28:42,788 um we have obviously a lot of partners um of ours here at the Legal Tech Fund that represent many of those big law firms. 369 00:28:42,788 --> 00:28:46,149 And we want to play a role in trying to help them get there. 370 00:28:46,393 --> 00:28:52,803 I will say like we believe in law firm 2.5 or 3.0. 371 00:28:52,803 --> 00:29:03,011 uh In some of that future we believe in, we're not sure that law firm is even like, they're not a firm, like they're a technology company. 372 00:29:03,193 --> 00:29:14,819 And you know, it's the incumbents, the AMLaw 200, they have every right and ability to make these investments and to own their kind of share they have. 373 00:29:15,023 --> 00:29:26,216 Obviously at our end of the spectrum, we're intrigued by the companies that are starting today as a pure technology company with no law firm, no lawyer around the table thinking 374 00:29:26,216 --> 00:29:32,928 through how they deliver some value prop along kind of the value chain of legal services. 375 00:29:32,968 --> 00:29:37,249 And maybe at the end of the line, there is an attorney as needed. 376 00:29:37,249 --> 00:29:44,621 uh you know, we're entering a new world or paradigm where there's some shifting in kind of regulatory expectations here. 377 00:29:44,780 --> 00:29:48,602 And do you need to be an attorney to own a law firm? 378 00:29:48,602 --> 00:29:53,703 And ah some of those, they've been breaking down internationally. 379 00:29:53,724 --> 00:29:56,525 They're starting to break down in certain states. 380 00:29:56,525 --> 00:30:00,446 And ah it's a fascinating time. 381 00:30:00,446 --> 00:30:05,068 we've been kicking the can of how do we organize around this and how do we talk about it? 382 00:30:05,068 --> 00:30:12,251 And one of the things we talked about is the law firm 2.0, as we call it, doesn't start. 383 00:30:12,251 --> 00:30:16,474 with a partner or managing partner, it starts with a line of code. 384 00:30:16,474 --> 00:30:19,815 Like it's a technology company at its ethos. 385 00:30:19,815 --> 00:30:27,730 And then it thinks through at the end, how do I provide that street strategic level of guidance, that advisory, that, that consultative approach to clients. 386 00:30:27,730 --> 00:30:32,323 And so that's what we're intrigued by with this concept of law firm 2.0. 387 00:30:32,323 --> 00:30:40,227 And, you know, as we think about the labs that we just talked about, or we think about our core fun, you know, we'd be disappointed if 388 00:30:40,227 --> 00:30:46,393 over half of our capital is not deployed in some version or concepts of these types of models. 389 00:30:46,393 --> 00:30:49,726 And they're baby steps to get there and we'll play along that spectrum. 390 00:30:49,726 --> 00:30:53,559 But this is the future and this is what we think about all day. 391 00:30:54,059 --> 00:30:54,649 Yeah. 392 00:30:54,649 --> 00:31:00,013 Well, here's the good news about being a tech company as opposed to a traditional business. 393 00:31:00,013 --> 00:31:01,433 It's the multiple. 394 00:31:01,433 --> 00:31:06,986 So you typically sell for a multiple of revenue instead of a multiple of EBITDA, right? 395 00:31:06,986 --> 00:31:09,308 So um you're a finance guy. 396 00:31:09,308 --> 00:31:10,719 You're familiar. 397 00:31:10,719 --> 00:31:15,061 I've been an entrepreneur for a long time, owned a lot of different types of businesses. 398 00:31:15,061 --> 00:31:17,032 My wife and I own five gyms here in St. 399 00:31:17,032 --> 00:31:17,523 Louis. 400 00:31:17,523 --> 00:31:20,084 uh Pretty successful. 401 00:31:20,084 --> 00:31:21,739 But if we were to sell those 402 00:31:21,739 --> 00:31:26,581 businesses, they would sell between three and four times EBITDA. 403 00:31:26,581 --> 00:31:32,513 If we were to sell InfoDash, it would sell for in today's market, six to eight times revenue and maybe more. 404 00:31:32,513 --> 00:31:35,325 um Yeah, right. 405 00:31:35,325 --> 00:31:40,607 So if you do the math on that, let's say you're operating at a 20 % margin, right? 406 00:31:40,607 --> 00:31:43,518 And you've got a uh $10 million business. 407 00:31:43,518 --> 00:31:46,920 That means you're making $2 million a year. 408 00:31:46,920 --> 00:31:50,081 Bottom line, you'll sell it for six to eight. 409 00:31:50,535 --> 00:31:51,377 Yeah. 410 00:31:51,969 --> 00:31:52,639 Sure. 411 00:31:52,639 --> 00:31:53,959 EBITDA multiple. 412 00:31:53,959 --> 00:31:59,942 If you're 10 million in revenue and you sell for six to eight times that, it's 60 to 80 million. 413 00:31:59,942 --> 00:32:11,456 So like, I feel like the earning potential, um it's going to be a tough transition and there's going to be fewer, there's going to be much less head count in the tech company by 414 00:32:11,456 --> 00:32:12,496 design, right? 415 00:32:12,496 --> 00:32:17,608 You're selling tech, not your inventory isn't people's hours. 416 00:32:17,608 --> 00:32:19,829 It's your tech, right? 417 00:32:19,865 --> 00:32:21,709 Um, but man, that's a pretty picture. 418 00:32:21,709 --> 00:32:24,071 I feel like, I feel like lawyers can get behind that. 419 00:32:24,071 --> 00:32:24,671 That's right. 420 00:32:24,671 --> 00:32:25,591 You think so, right? 421 00:32:25,591 --> 00:32:28,031 You can put the math on paper and explain it. 422 00:32:28,031 --> 00:32:29,391 I think that's right. 423 00:32:29,871 --> 00:32:41,471 I think your point is valid on thinking through how the market might perceive a multiple of a business at some level based on services or technology. 424 00:32:41,511 --> 00:32:50,623 I think what intrigues us is the ability to provide a similar service at such a higher margin, like the same unit of output. 425 00:32:50,743 --> 00:33:02,061 whether or not it's historic legacy expectation legal services versus call it law firm 2.0, that same unit of output should be able to be provided at a significantly higher 426 00:33:02,061 --> 00:33:02,421 margin. 427 00:33:02,421 --> 00:33:09,416 It's for all the same reasons you said, repetitive using technology and using less people and human to do that. 428 00:33:09,416 --> 00:33:12,548 so um we're intrigued by the opportunity. 429 00:33:12,548 --> 00:33:19,522 And frankly, what that can mean for the end buyer, and especially I think we're intrigued by what that can mean for the end consumer. 430 00:33:19,522 --> 00:33:20,455 um 431 00:33:20,455 --> 00:33:22,615 Not everything we do is enterprise. 432 00:33:22,695 --> 00:33:27,315 Many of it is SMB or consumer. 433 00:33:27,495 --> 00:33:37,755 In a world we live in today where hourly wages are 20, 30 bucks in this country, depending on where you are on average versus, and I won't even speculate depending on who's 434 00:33:37,755 --> 00:33:41,495 listening here, but what the hourly rates of attorneys are. 435 00:33:41,755 --> 00:33:45,675 You'd do the math and legal services are largely only addressable. 436 00:33:45,675 --> 00:33:47,575 It's like the one or 2 % out there. 437 00:33:47,575 --> 00:33:49,215 Good legal services. 438 00:33:49,768 --> 00:34:00,513 you know, the promise of what the law firm 2.0 can do is it can provide access to legal services to a group of people that have never had access to good legal services. 439 00:34:00,674 --> 00:34:01,954 And like, that's a great thing. 440 00:34:01,954 --> 00:34:05,636 And ah it's good business as well. 441 00:34:05,636 --> 00:34:11,640 And so we think about this, I alluded to this trillion dollar global legal services market. 442 00:34:11,640 --> 00:34:17,323 We think that TAM is increasing because of the law firm 2.0 and it's exciting and it's got good... 443 00:34:17,323 --> 00:34:18,265 uh 444 00:34:18,265 --> 00:34:20,378 implications for access to justice. 445 00:34:20,378 --> 00:34:21,479 It's good business. 446 00:34:21,479 --> 00:34:25,153 And, you know, we're excited about the role that we can play in that. 447 00:34:25,741 --> 00:34:37,001 Let's talk a little bit about consolidation because I would bet my next paycheck that we're going to have a significant amount of consolidation. 448 00:34:37,061 --> 00:34:42,081 And one reason is the legal market, just how incredibly fragmented it is. 449 00:34:42,081 --> 00:34:44,541 My listeners have heard this stat many times. 450 00:34:44,541 --> 00:34:51,161 If you add up the revenues of the AmLaw 100, it's about $140 billion. 451 00:34:52,749 --> 00:34:55,869 That's maybe a Fortune 150 customer. 452 00:34:56,289 --> 00:34:58,009 I Nvidia is $4 trillion. 453 00:34:58,009 --> 00:35:02,409 That's like a rounding error on the top 100 law firms, right? 454 00:35:02,409 --> 00:35:10,629 The top five law firms only control about 6 % of the total legal spend in the United States. 455 00:35:10,629 --> 00:35:19,789 The big four have 98 % on the audit side of public company audit work. 456 00:35:19,789 --> 00:35:20,342 Yeah. 457 00:35:20,342 --> 00:35:21,805 an interesting analogy there. 458 00:35:22,039 --> 00:35:22,669 crazy. 459 00:35:22,669 --> 00:35:26,672 It's crazy just how different in terms of fragmentation. 460 00:35:27,253 --> 00:35:34,329 and I think that, you know, one of the reasons for all the fragmentation, one is you've only had lawyers in leadership. 461 00:35:34,329 --> 00:35:38,202 haven't had a traditional, you haven't had a scalable business model. 462 00:35:38,202 --> 00:35:40,304 It's hard to scale people. 463 00:35:40,304 --> 00:35:48,140 And it's also really difficult when you don't bring in professional managers, like professional management wants, they want stock options. 464 00:35:48,140 --> 00:35:50,012 They're probably going to get paid more than your lawyers. 465 00:35:50,012 --> 00:35:51,533 They're not going to like that. 466 00:35:51,666 --> 00:35:54,031 Um, so it's just not been a scalable. 467 00:35:54,031 --> 00:35:58,152 How do you see, are we going to have in five years Amal 200? 468 00:35:58,152 --> 00:36:00,336 Like, what do you, what do see that looking like? 469 00:36:00,336 --> 00:36:02,857 Yeah, it's going to be fascinating. 470 00:36:02,857 --> 00:36:05,198 I think you're absolutely right. 471 00:36:05,198 --> 00:36:10,660 And we can point to other industries as analogies for where this may go in legal. 472 00:36:10,660 --> 00:36:19,443 If you think about, let's go back 20 years or for the past 20 years, you take healthcare as an example, and you think about kind of physician practice, roll-ups and the 473 00:36:19,443 --> 00:36:22,304 consolidation going on in healthcare. 474 00:36:22,304 --> 00:36:29,369 You just talked about CPA firms and that's maybe a little bit more of a recent, call it last five years or so, but 475 00:36:29,369 --> 00:36:37,454 very, uh a market undergoing a significant amount of consolidation, wealth management being another aggregation of these platforms together. 476 00:36:37,454 --> 00:36:46,592 And I think we're entering a period where the next five, 10 years will be dominated by a significant amount of consolidation in the legal world. 477 00:36:46,592 --> 00:36:56,973 um I think the promise of technology and what that can do will allow attorneys to hopefully operate at the highest level. 478 00:36:56,973 --> 00:37:01,427 of their capabilities, their credentials, spending more time with clients, more strategic in nature. 479 00:37:01,427 --> 00:37:12,816 You hopefully can deliver info dash plan, a key role here in um creating that infrastructure, the interconnectivity that hopefully should allow for easier 480 00:37:12,816 --> 00:37:13,897 consolidation. 481 00:37:13,897 --> 00:37:20,563 Attorneys can spend more time doing what they want to do, getting out of the business of law side, which probably they have less interest in doing. 482 00:37:20,563 --> 00:37:23,155 And that lends itself to an opportunity for consolidation. 483 00:37:23,155 --> 00:37:25,423 like absolutely. 484 00:37:25,423 --> 00:37:35,536 And then I think the biggest thing that we've kind of danced around it a little bit in the conversation is again, we're, we're, we're at a point today where for the most part, 485 00:37:35,536 --> 00:37:39,347 private capital has not touched law firm world. 486 00:37:39,347 --> 00:37:44,568 And there's a reason and there's regulatory barriers that have prevented that that is changing. 487 00:37:44,568 --> 00:37:48,109 And so, um, you know, we're starting to see it. 488 00:37:48,109 --> 00:37:51,620 We're seeing some bankers talk about certain assets in market. 489 00:37:51,620 --> 00:37:54,271 We're certainly seeing some cross border things. 490 00:37:54,290 --> 00:37:58,664 thinking about law firms that are emerging and what role could some capital play in that. 491 00:37:58,664 --> 00:38:07,931 And then, you know, I think one of the most interesting things is I don't know if we're perfect clarity yet and we're getting our crystal ball out here. 492 00:38:07,931 --> 00:38:13,115 But as we mentioned, it's been an incredibly lucrative period past five years for law firms. 493 00:38:13,115 --> 00:38:20,431 ah And ah they've been compensated for great work they're doing and delivering for clients. 494 00:38:20,431 --> 00:38:22,609 And certainly on the client side, there's... 495 00:38:22,609 --> 00:38:26,841 aspirations of better service, all those types of things you expect in the industry. 496 00:38:27,061 --> 00:38:33,754 That being said, despite how, and law firms oftentimes get dogged for being sometimes bad business, they're not good at business. 497 00:38:33,754 --> 00:38:37,306 Well, like you get out of the P &L, they're pretty freaking great businesses. 498 00:38:37,306 --> 00:38:44,749 So they're doing something right here, but we're in a world where law firms traditionally think about the world on a year by year basis. 499 00:38:44,749 --> 00:38:48,971 The vast majority of profits get distributed to partners every single year. 500 00:38:49,339 --> 00:38:56,364 Well, private capital and private equity in particular often also gets dogged for being short-term in nature. 501 00:38:56,545 --> 00:39:02,430 But you're talking about, you know, when they think about the world from a three to five year period. 502 00:39:02,430 --> 00:39:12,428 Well, this might be the one time in history where at some point private equity is going to sit on top of legal and be thinking about the world for a longer time horizon than the 503 00:39:12,428 --> 00:39:13,959 underlying industry. 504 00:39:13,959 --> 00:39:19,033 And what that will allow people to do is make investments in the things they've historically ignored. 505 00:39:19,033 --> 00:39:28,550 And we don't believe, or I should say, I don't believe in a world where even some of the largest law firms in the world, when one decides to take a big fat check from someone else 506 00:39:28,550 --> 00:39:39,037 to make those long-term investments, to make them more competitive, to try to take more market share, that the others don't say, man, we should probably do the same thing. 507 00:39:39,037 --> 00:39:41,248 So it's a matter of time. 508 00:39:41,248 --> 00:39:48,203 I don't know if it's in 12 months or 18 months and when some of the regular story stuff works itself out, but it's going to happen. 509 00:39:48,413 --> 00:39:53,337 And uh that's going to kind of going to usher in a period of consolidation in the space. 510 00:39:53,422 --> 00:39:53,942 Yeah. 511 00:39:53,942 --> 00:40:03,942 So it's ABA model rule 5.4 that disallows non-legal ownership of law firms. 512 00:40:03,982 --> 00:40:04,502 So you know what? 513 00:40:04,502 --> 00:40:07,022 There's a lot of complacency around that. 514 00:40:07,142 --> 00:40:10,622 So I've worked with more than half the AmLaw. 515 00:40:10,622 --> 00:40:12,742 I stopped counting at 110 AmLaw firms. 516 00:40:12,742 --> 00:40:14,722 It's definitely more than that. 517 00:40:14,862 --> 00:40:17,122 And so I've had a real good cross-sectional view. 518 00:40:17,122 --> 00:40:21,462 I got a pretty good Rolodex of people that I talk to regularly. 519 00:40:21,565 --> 00:40:27,058 And a lot of people point to a couple of data points that I think are somewhat irrelevant right now. 520 00:40:27,058 --> 00:40:34,352 Like they say, well, the Legal Services Act was 10 years ago in the UK. 521 00:40:34,352 --> 00:40:37,514 And that hasn't changed the market at all. 522 00:40:37,514 --> 00:40:50,801 In fact, non-traditional, the alternative business um entity roles uh or firms have underperformed. 523 00:40:51,037 --> 00:40:52,267 And okay, yeah. 524 00:40:52,267 --> 00:40:55,758 And the big four have tried to make a push in the US market before. 525 00:40:55,758 --> 00:40:59,259 So they're like, yeah, we've tried this and it, eh. 526 00:40:59,259 --> 00:41:03,000 Well, what's different is that the means of legal production have now changed. 527 00:41:03,000 --> 00:41:08,882 So that completely rewrites the equation on in terms of likelihood of success. 528 00:41:08,882 --> 00:41:19,645 But I still hear people that I really respect that are really smart who go, yeah, but, and I feel like they think I'm over indexing on all of this. 529 00:41:19,991 --> 00:41:23,446 transformation talk and I'm like no no you're under indexing. 530 00:41:23,446 --> 00:41:25,640 don't know what do you think? 531 00:41:25,640 --> 00:41:28,543 we're a biased party here, but we certainly believe in that. 532 00:41:28,543 --> 00:41:40,872 And I think, as we've alluded to or talked about, you have to remember that you're telling very successful organizations to think, and to take that risk and challenge when life is 533 00:41:40,872 --> 00:41:41,752 good right now. 534 00:41:41,752 --> 00:41:51,430 ah And so we do think it's those firms that are willing to forego a little bit extra distribution to think about those investments. 535 00:41:51,430 --> 00:41:58,642 and to think about whether or not it's even they're just thinking nuclear to themselves and what they can do to make themselves more competitive. 536 00:41:58,662 --> 00:42:03,443 And it's those firms that are making that starting to make those long-term bets that we think will be most successful. 537 00:42:03,443 --> 00:42:10,725 um it's, I'm not trying to predict the end of the world. 538 00:42:10,725 --> 00:42:13,806 Like we have lots of great law firm partners. 539 00:42:13,806 --> 00:42:17,316 They're going to be around for a long, long period of time, maybe forever. 540 00:42:17,316 --> 00:42:18,867 But. 541 00:42:20,775 --> 00:42:32,295 there's almost no segment of legal services that we don't think AI and technology can play a material role in disrupting, changing the model, playing a factor there. 542 00:42:32,295 --> 00:42:34,775 And so, you I think it's a reality. 543 00:42:34,775 --> 00:42:45,015 And I think to your point, I think you're naive if you really don't think that it will be perverse and it will infiltrate the entire industry. 544 00:42:45,015 --> 00:42:46,015 so it's... 545 00:42:46,539 --> 00:42:49,502 We hope and we're advising our friends, like think about this. 546 00:42:49,502 --> 00:42:50,951 Think about what five years looks like. 547 00:42:50,951 --> 00:42:58,759 Think about what 10 years, know, what do you, maybe another way of thinking, was like, what do you have to believe won't happen for you to keep with the status quo? 548 00:42:58,759 --> 00:43:02,221 It's just like the world's changing very quickly. 549 00:43:02,325 --> 00:43:03,225 Yeah. 550 00:43:03,487 --> 00:43:04,028 Yeah. 551 00:43:04,028 --> 00:43:16,264 The, your point about law firm, like once one law firm, once the rules change and once somebody takes them outside capital. 552 00:43:16,625 --> 00:43:19,627 I saw a really, you know, the other law firms following suit. 553 00:43:19,627 --> 00:43:24,651 saw a good post this morning that said law firms don't buy technology, they buy social proof. 554 00:43:24,651 --> 00:43:27,313 And it is so incredibly true. 555 00:43:27,313 --> 00:43:28,084 It really is. 556 00:43:28,084 --> 00:43:35,159 And you know what, as when we were first starting out and we had no legal resume, it was so hard to get conversations. 557 00:43:35,159 --> 00:43:40,904 Like we had to eat table scraps, like do gigs that we really didn't want to do that weren't in our wheelhouse. 558 00:43:40,904 --> 00:43:42,385 We were just trying to like 559 00:43:42,385 --> 00:43:42,716 Yeah. 560 00:43:42,716 --> 00:43:43,667 paycheck. 561 00:43:43,667 --> 00:43:47,040 And then over time, we built trust and credibility. 562 00:43:47,040 --> 00:43:52,995 And now I can walk into any law firm anywhere and have a credible conversation because we've earned it. 563 00:43:52,995 --> 00:43:54,636 took years. 564 00:43:54,636 --> 00:43:56,438 It took more than a decade. 565 00:43:56,438 --> 00:44:00,561 But um they follow each other like lemmings, right? 566 00:44:00,561 --> 00:44:05,109 It's very much a peer-driven dynamic. 567 00:44:05,109 --> 00:44:07,324 where, what's the firm over there doing? 568 00:44:07,324 --> 00:44:07,926 they're doing that? 569 00:44:07,926 --> 00:44:09,580 Hey, maybe we should think about doing that. 570 00:44:09,580 --> 00:44:15,320 It's great when you're a tech company and you've got lots of momentum because, like, everybody wants to have a conversation. 571 00:44:15,320 --> 00:44:20,964 mean you just got to get to this one inflection point, this one bit of scale and kind of the scales tip in your favor. 572 00:44:20,964 --> 00:44:22,785 And that's for sure. 573 00:44:22,785 --> 00:44:32,952 And again, I think it's, um and I don't want to talk to spirit, people are being thoughtful, they're risk averse, they're thinking through that and they don't want to 574 00:44:32,952 --> 00:44:34,653 upset the apple cart to some extent. 575 00:44:34,653 --> 00:44:43,139 um And I think that some of that mentality is changing and we're seeing it and the great CIOs across the country that 576 00:44:43,331 --> 00:44:54,381 partner with us and are thinking through how do they take their firm to the next step and uh they're testing, they're innovating, they're pushing technology through, but it'll take 577 00:44:54,381 --> 00:44:55,122 time. 578 00:44:55,122 --> 00:44:56,203 There's just no doubt about it. 579 00:44:56,203 --> 00:44:57,313 It'll take time. 580 00:44:57,389 --> 00:45:04,009 Well, that's a really good segue into maybe our final topic because we're almost running out of time. 581 00:45:04,609 --> 00:45:11,069 What do you think the timeline looks like for real fundamental transformation? 582 00:45:11,069 --> 00:45:18,049 Like, I don't think we're going to see big impact to law firm financials in 2025. 583 00:45:18,049 --> 00:45:22,629 I do think that we're going to start to see some of that in 2026. 584 00:45:22,629 --> 00:45:26,509 And it's really hard to predict after that, but 585 00:45:26,509 --> 00:45:28,955 ah How do you see the timeline? 586 00:45:28,955 --> 00:45:33,799 Yeah, you're really putting me on the spot here as a VC predicting exactly the timing here. 587 00:45:33,799 --> 00:45:35,420 I don't want this to be used against me. 588 00:45:35,420 --> 00:45:47,311 um Look, I'd say for the concept of law firm 2.0 as we see it and people innovating out there and doing some of these things uh in a new way, it's here. 589 00:45:47,311 --> 00:45:47,851 It's now. 590 00:45:47,851 --> 00:45:49,512 It is absolutely happening. 591 00:45:49,512 --> 00:45:56,999 Now, like a broader question might be like where, where, yes, where will it be seen publicly or visibly? 592 00:45:56,999 --> 00:45:57,520 And 593 00:45:57,520 --> 00:46:00,923 I think we're a little bit a ways away from that, to be honest. 594 00:46:00,923 --> 00:46:09,510 It's just, um you know, for you or I, or more than likely your listeners that are thinking about this, we will start seeing it. 595 00:46:09,510 --> 00:46:16,015 But on the front of the Wall Street Journal or people seeing it publicly or thinking about I think we're several years away. 596 00:46:16,015 --> 00:46:24,122 But we're already, we're just, seeing people ship away and starting some things and people starting to try to break a little glass and those types of things. 597 00:46:24,122 --> 00:46:25,422 you know, we're seeing it, but... 598 00:46:25,422 --> 00:46:26,463 um 599 00:46:26,913 --> 00:46:32,388 know, thing we do uh internally, we talk about the quote from Bill Gates. 600 00:46:32,388 --> 00:46:46,630 It oftentimes gets uh changed around a little bit, but people often ah underestimate the change that will occur in 10 years, but uh overestimate the change that will occur ah in 601 00:46:46,630 --> 00:46:47,621 one year. 602 00:46:47,621 --> 00:46:51,004 And that kind of 10 year, like maybe now is five years. 603 00:46:51,004 --> 00:46:54,046 Like it is, it's happening so quickly. 604 00:46:54,046 --> 00:46:55,193 ah 605 00:46:55,193 --> 00:46:56,384 with the innovation. 606 00:46:56,384 --> 00:47:00,488 mean, we're days away from GPT-5 coming out. 607 00:47:00,488 --> 00:47:02,350 It's going to be massive. 608 00:47:02,350 --> 00:47:04,933 um So I don't know. 609 00:47:04,933 --> 00:47:06,554 I'm not sure if I answered your question, but. 610 00:47:06,554 --> 00:47:07,615 uh 611 00:47:07,644 --> 00:47:08,695 there is no answer. 612 00:47:08,695 --> 00:47:10,857 It's just really kind of broad brushstrokes. 613 00:47:10,857 --> 00:47:14,031 Like, again, I don't think no impact this year. 614 00:47:14,031 --> 00:47:15,527 Yeah. 615 00:47:15,527 --> 00:47:16,747 with that 100%. 616 00:47:16,747 --> 00:47:21,727 And I would probably say I'm not sure we'll see an impact in things at the law firm financials. 617 00:47:21,727 --> 00:47:25,587 And look, these law firms are like, sophisticated. 618 00:47:25,587 --> 00:47:34,247 They've got great people now as like, you know, business leaders to partner with these attorneys and like, the great ones are going to be taking on these things. 619 00:47:34,247 --> 00:47:43,047 like, their P &L might look different and their balance sheet might look a little different, but many of them are going to be incredibly successful in this journey. 620 00:47:43,127 --> 00:47:43,987 So, 621 00:47:45,338 --> 00:47:46,592 It's going to be interesting. 622 00:47:47,118 --> 00:47:52,478 I just saw an update 58 seconds ago, OpenAI launches GPT-5. 623 00:47:52,478 --> 00:47:53,938 we're there. 624 00:47:58,098 --> 00:47:59,138 It's so true. 625 00:47:59,138 --> 00:47:59,338 All right. 626 00:47:59,338 --> 00:48:01,638 Well, hey, this has been a great conversation. 627 00:48:02,578 --> 00:48:08,229 first question is, how do people find out more about the Legal Tech Fund and the work that you do? 628 00:48:08,229 --> 00:48:09,790 Yeah, Ted, we're very much like yourself. 629 00:48:09,790 --> 00:48:12,200 We try to meet people where they are on all types of platforms. 630 00:48:12,200 --> 00:48:17,012 So come to our website, www.legaltech.com. 631 00:48:17,012 --> 00:48:19,563 We made it very easy for you with the URL. 632 00:48:19,563 --> 00:48:24,555 Find us on LinkedIn, find us on YouTube, and certainly find us in person. 633 00:48:24,555 --> 00:48:25,315 We're on the road. 634 00:48:25,315 --> 00:48:27,546 We're at all major legal tech conferences. 635 00:48:27,546 --> 00:48:28,727 Come say hi. 636 00:48:28,727 --> 00:48:30,637 We'd love to start a conversation. 637 00:48:30,861 --> 00:48:44,520 Speaking of which, you and I are going to do a keynote um presentation at the Legal Tech Connect, is like the sister conference to the KM &I that's been around for about three or 638 00:48:44,520 --> 00:48:45,051 four years. 639 00:48:45,051 --> 00:48:45,561 Patrick D. 640 00:48:45,561 --> 00:48:48,673 Domenico did a great job pulling that together. 641 00:48:48,673 --> 00:48:56,289 And now he's doing a Legal Tech Connect, um is in New York, which I think is different than you guys. 642 00:48:56,289 --> 00:49:00,101 But same kind of general concept, bringing together investors, 643 00:49:00,375 --> 00:49:04,420 tech companies and law firm people and seeing what happens. 644 00:49:04,420 --> 00:49:06,715 So that'll be in October, I think. 645 00:49:06,715 --> 00:49:08,161 That's right, I'm looking forward to it. 646 00:49:08,161 --> 00:49:10,792 uh And I'll even see you next week, right? 647 00:49:10,792 --> 00:49:11,727 Ilta-Con. 648 00:49:11,727 --> 00:49:12,870 that's right. 649 00:49:12,870 --> 00:49:13,461 Good stuff. 650 00:49:13,461 --> 00:49:14,815 All right, well, hey, I appreciate the time. 651 00:49:14,815 --> 00:49:16,259 This has been very insightful. 652 00:49:16,259 --> 00:49:20,264 And um we'll, I guess, see each other next week. 653 00:49:20,264 --> 00:49:21,296 All right, Ted, thank you for having me. 654 00:49:21,296 --> 00:49:23,124 I appreciate it. 655 00:49:23,380 --> 00:49:24,361 Be well. 00:00:05,611 Gordon, how are you this morning? 2 00:00:05,767 --> 00:00:06,430 I'm doing well, Ted. 3 00:00:06,430 --> 00:00:08,045 Appreciate you having me today. 4 00:00:08,097 --> 00:00:09,778 Yeah, I'm excited. 5 00:00:09,778 --> 00:00:15,742 had Zach on, I guess it was about a year and a half ago, and we had a great conversation. 6 00:00:16,022 --> 00:00:20,727 The Legal Tech Fund is growing, and we're going to talk more about that. 7 00:00:20,727 --> 00:00:22,698 But before we do, let's get you intro'd. 8 00:00:22,698 --> 00:00:26,291 So you're a current partner at TLTF. 9 00:00:26,291 --> 00:00:30,174 You serve on several boards at startups. 10 00:00:30,234 --> 00:00:34,477 And my favorite thing about you is you're a Tidewater, Virginia guy, man. 11 00:00:34,477 --> 00:00:35,804 I'm from Norfolk. 12 00:00:35,804 --> 00:00:36,705 That's right. 13 00:00:36,705 --> 00:00:39,007 Virginia Beach native uh myself. 14 00:00:39,007 --> 00:00:44,712 uh Born and raised, I have uh two young kids and a family down here at the beach. 15 00:00:44,712 --> 00:00:50,517 And uh we love raising our kids here in Hampton Roads and Tidewater. 16 00:00:50,517 --> 00:00:59,125 And certainly in the world we live in today, you can do that and then also get on a plane the next day or whenever you need to see everyone. 17 00:00:59,125 --> 00:01:01,197 uh we love living at the beach. 18 00:01:01,390 --> 00:01:02,312 That's awesome. 19 00:01:02,312 --> 00:01:10,709 Well, why don't you tell everyone a little bit about who you are, what you do, where you do it, and just a little bit about your background. 20 00:01:10,725 --> 00:01:11,275 Yeah, sure. 21 00:01:11,275 --> 00:01:15,176 ah So as you mentioned, I'm a partner at the Legal Tech Fund. 22 00:01:15,276 --> 00:01:16,076 I'm an investor. 23 00:01:16,076 --> 00:01:18,037 ah That's my background. 24 00:01:18,037 --> 00:01:24,479 ah Undergraduate degree in finance, started my career on Wall Street, working for a large investment bank. 25 00:01:24,479 --> 00:01:34,942 And then since that time, I've been investing, kind of increasingly going earlier stage ah as an investor, finally to where I am today and where I have the most fun. 26 00:01:34,942 --> 00:01:37,012 ah I like getting my hands dirty. 27 00:01:37,012 --> 00:01:39,493 I like working with entrepreneurs and founders. 28 00:01:39,591 --> 00:01:41,553 I like a little bit of meat on the bone. 29 00:01:41,553 --> 00:01:45,216 There's an idea, there's a product, there's hopefully a little bit of revenue. 30 00:01:45,216 --> 00:01:55,794 the idea of rolling up our sleeves as an investor and partner to help an entrepreneur accomplish a goal, achieve a dream, ah it's really rewarding and fun. 31 00:01:55,794 --> 00:02:00,587 And the best part about it is, as an investor, you're mutually aligned there, right? 32 00:02:00,587 --> 00:02:08,533 And so we can spend all of our time focused on making our entrepreneurs as successful as possible and as a byproduct will benefit. 33 00:02:08,533 --> 00:02:09,368 uh 34 00:02:09,368 --> 00:02:14,890 It's that journey and that growth that I really enjoy, ah which is where I am today here at the Legal Tech Fund. 35 00:02:15,554 --> 00:02:15,994 Yeah. 36 00:02:15,994 --> 00:02:20,468 mean, uh, so info dash is a portfolio company of TLTF. 37 00:02:20,468 --> 00:02:23,000 We've had a great experience working with you guys. 38 00:02:23,000 --> 00:02:26,463 Um, yeah, I mean, we didn't, we didn't need the money. 39 00:02:26,463 --> 00:02:30,386 Um, you know, we, our licensing model is very cashflow friendly. 40 00:02:30,386 --> 00:02:45,458 Um, more money never hurts, but it was really the intangibles that you guys bring in terms of, you know, the Rolodex, the visibility that you have in. 41 00:02:45,644 --> 00:02:58,386 what's going on in the space and can really give us feedback on, we're heading down this path that may be a very crowded space or soon to be very crowded. 42 00:02:58,526 --> 00:03:02,971 And those intangibles, I think, are really important. 43 00:03:02,971 --> 00:03:11,158 So probably most people who listen here know TLTF, but what's the elevator pitch for the folks that don't? 44 00:03:11,206 --> 00:03:17,831 Sure, I'll try to keep it very brief, but ah I like to say the Legal Tech Fund, our name is not very sexy. 45 00:03:17,831 --> 00:03:23,395 I don't know if my partner Zach would like me saying that, but I think it's true, but it is very intentional. 46 00:03:23,395 --> 00:03:26,697 ah We want people to know exactly who we are. 47 00:03:26,777 --> 00:03:34,002 And we are the first and only investment firm exclusively focused on investing at that intersection of legal and technology. 48 00:03:34,002 --> 00:03:39,718 ah Fundamentally believe that technology is changing the practice of law. 49 00:03:39,718 --> 00:03:50,964 And then certainly some things have happened since the firm was founded in 2020, COVID being one of them, uh generative AI being another thing that has kind of created this huge 50 00:03:50,964 --> 00:03:52,075 industry tailwinds. 51 00:03:52,075 --> 00:03:57,178 But fundamentally, we want to be backing the entrepreneurs and founders that are disrupting the world of law. 52 00:03:57,178 --> 00:03:58,349 And that's simply who we are. 53 00:03:58,349 --> 00:04:06,583 We do that at the earliest stages, pretty much pre-SEED, SEED, Series A companies, and working with founders like yourselves to help you be successful. 54 00:04:07,698 --> 00:04:14,144 And um did you guys get lucky with uh or was this intentional? 55 00:04:14,144 --> 00:04:17,457 I'm leaning in the camp that you guys got lucky with. 56 00:04:17,457 --> 00:04:24,212 there is, so the legal tech fund's been around about four years-ish? 57 00:04:25,113 --> 00:04:25,494 Yeah. 58 00:04:25,494 --> 00:04:25,960 uh 59 00:04:25,960 --> 00:04:27,527 fund was in 2021. 60 00:04:28,054 --> 00:04:32,320 So the timing could not have been any better with... 61 00:04:33,222 --> 00:04:35,865 I mean maybe, maybe you did. 62 00:04:35,906 --> 00:04:38,412 If you did, hats off to you, but... 63 00:04:38,412 --> 00:04:47,338 I think we're certainly very uh fortunate for, um well, look, I think our firm was founded on the thesis that technology was changing the industry. 64 00:04:47,338 --> 00:04:56,125 And you could see it happening at that point in time, whether or not it's law firms, corporate legal, or even consumers, like people's willingness to leverage technology as 65 00:04:56,125 --> 00:04:57,696 they were thinking about legal services. 66 00:04:57,696 --> 00:05:00,087 I think that motion had started. 67 00:05:00,087 --> 00:05:05,351 um But there's no doubt that a little bit of luck here mixed in. 68 00:05:05,731 --> 00:05:15,218 has helped support some really nice tailwinds and frankly creates an opportunity for entrepreneurs to do something pretty special and things that maybe weren't uh available to 69 00:05:15,218 --> 00:05:16,920 them a few years ago. 70 00:05:16,920 --> 00:05:25,887 And so it's uh just an incredible time in this space and we certainly want to be uh as helpful as possible to these entrepreneurs that are taking advantage of this new 71 00:05:25,887 --> 00:05:26,957 opportunity. 72 00:05:27,234 --> 00:05:28,807 I'd rather be lucky than good, 73 00:05:28,807 --> 00:05:30,007 That's right. 74 00:05:30,007 --> 00:05:32,787 No one ever accomplished anything good without a little bit of luck along the way. 75 00:05:32,787 --> 00:05:34,463 So we'll take it. 76 00:05:35,070 --> 00:05:40,410 all day and if you have bad luck, it's not always going to work out in your favor. 77 00:05:41,029 --> 00:05:47,310 what is the investment thesis there at TLTF? 78 00:05:47,676 --> 00:05:48,816 Yeah. 79 00:05:48,816 --> 00:05:52,517 So we broadly want to invest across legal. 80 00:05:52,517 --> 00:05:57,118 We view this as a trillion dollar global legal services market. 81 00:05:57,118 --> 00:06:03,050 We'll invest domestically, we'll invest internationally, we'll invest across the major end markets of legal. 82 00:06:03,050 --> 00:06:05,700 And so we do think about law firm related tech. 83 00:06:05,700 --> 00:06:09,561 We think about corporate related tech and we think about consumer related tech. 84 00:06:09,561 --> 00:06:13,382 And then the reality is I think you can step up even a little bit further than that. 85 00:06:13,382 --> 00:06:16,453 We think of the modern world we live in today. 86 00:06:16,559 --> 00:06:20,441 Legal is the one functional area that touches every other functional area. 87 00:06:20,542 --> 00:06:25,655 As an enterprise, a modern enterprise, you can't sell a new customer. 88 00:06:25,655 --> 00:06:27,407 can't sign a new contract. 89 00:06:27,407 --> 00:06:31,760 You can't put out a piece of marketing collateral, HR, finance. 90 00:06:31,760 --> 00:06:32,480 You get on the list. 91 00:06:32,480 --> 00:06:36,013 Like legal is going to be integrated into every functional area. 92 00:06:36,013 --> 00:06:38,184 And so that's where we want to be investing. 93 00:06:38,184 --> 00:06:44,699 It's the entrepreneurs, you know, disrupting at those, those edges of, of all these different functional areas. 94 00:06:44,699 --> 00:06:47,862 the lens with which we take to it ah is legal. 95 00:06:47,862 --> 00:06:51,735 And that's our view and how we plan on being as helpful as possible. 96 00:06:51,735 --> 00:07:01,755 And you kind of alluded to it, we can get into it, but ah we have a nice platform here that's uh friends of the firm, investors, strategic's all kind of hanging around in this 97 00:07:01,755 --> 00:07:03,426 ecosystem we're trying to bring together. 98 00:07:03,426 --> 00:07:11,363 And we can kind of leverage that to be as helpful as possible for these people that have interesting ideas of where legal intersects other things. 99 00:07:12,054 --> 00:07:14,976 Yeah, the timing was outstanding. 100 00:07:14,976 --> 00:07:18,538 And um I've been in this space for almost 20 years. 101 00:07:18,538 --> 00:07:24,481 And we're to talk about this catalyst article that I thought did a great job talking about. 102 00:07:25,081 --> 00:07:26,662 they mentioned us, which was great. 103 00:07:26,662 --> 00:07:31,165 But even aside from that, was good on its own merits. 104 00:07:31,325 --> 00:07:37,669 But they had a hilarious quote in there, which was, if Rip Van Winkle woke up, the only thing he'd recognize was a law firm. 105 00:07:37,669 --> 00:07:40,482 um And that is true. 106 00:07:40,482 --> 00:07:41,683 That is a true statement. 107 00:07:41,683 --> 00:07:43,544 Now that is changing. 108 00:07:43,545 --> 00:07:56,335 But I thought what the Catalyst article did a good job of is describing the speed or lack of speed at which law firms have adopted new technologies. 109 00:07:56,335 --> 00:08:09,466 Like when I first got into legal tech, I very naively thought that I could uh help move things along by doing thought leadership and highlighting 110 00:08:09,670 --> 00:08:15,633 This was when the cloud was still relatively new and um man, it didn't work. 111 00:08:15,633 --> 00:08:19,095 ah I beat my head against the wall for a really long time. 112 00:08:19,095 --> 00:08:21,176 I was just, I was just too early. 113 00:08:21,217 --> 00:08:23,318 Now fast forward. 114 00:08:23,318 --> 00:08:25,899 The good thing was that got me really prepped. 115 00:08:25,899 --> 00:08:34,504 So when we were a services company as Acrowire, we were doing like bespoke internet and extranet development and we were really pushing towards the cloud. 116 00:08:34,504 --> 00:08:37,998 We would always get pulled back on prem and then 117 00:08:37,998 --> 00:08:42,398 Finally, in 2018, 2019, we said, you know what? 118 00:08:42,398 --> 00:08:44,358 We're going to roll the dice here. 119 00:08:44,358 --> 00:08:49,358 And we started working on InfoDash, which was cloud only. 120 00:08:49,358 --> 00:08:55,758 And at that time, there were hardly any firms that were in SharePoint Online and M365. 121 00:08:55,758 --> 00:09:01,278 Maybe they had messaging in the cloud, but that's it. 122 00:09:01,398 --> 00:09:03,378 And there are still. 123 00:09:04,090 --> 00:09:13,699 I can't say that there are still a year ago there were still firms that were wearing the tag of we're going to be the last firm to go to the cloud as a badge of honor. 124 00:09:13,699 --> 00:09:24,889 You now you don't look very smart by doing that especially with AI it's really hard to it's really hard to leverage AI at its full capacity if everything is on-prem. 125 00:09:24,889 --> 00:09:26,030 Would you agree? 126 00:09:26,055 --> 00:09:26,635 I mean, that's right. 127 00:09:26,635 --> 00:09:30,546 And that's part of the thesis of investing in you and your business. 128 00:09:30,546 --> 00:09:35,088 And you can kind of go down the line of a number of our portfolio companies. 129 00:09:35,088 --> 00:09:46,221 When you think about all the business of law side and you think about the infrastructure within a law firm, couldn't agree more with you and your statement of ah the badge of 130 00:09:46,221 --> 00:09:49,542 honor historically, but that is changing and it's changing quickly. 131 00:09:49,542 --> 00:09:52,483 ah It doesn't mean it happens overnight. 132 00:09:53,688 --> 00:09:58,799 you know, if you want to make a prediction, I'm sure there'll still be plenty of firms on-prem five years from now. 133 00:09:58,799 --> 00:10:04,169 Big, huge, brand-name law firms that we would all think of as some of the best and brightest law firms in the world. 134 00:10:04,169 --> 00:10:07,722 And it's not to uh talk disparagingly about anyone. 135 00:10:07,722 --> 00:10:18,615 It's the reality of these huge Frankensteins of infrastructure that have been built and these on-prem systems that work for the way that these law firms do business today. 136 00:10:18,663 --> 00:10:22,363 But that promise of AI, that's been the catalyst. 137 00:10:22,363 --> 00:10:24,003 That is what's changing everything. 138 00:10:24,003 --> 00:10:34,763 And really you need that interconnectivity tissue where your data can be in a central place and you can build on top of that in a compliant manner and all those types of 139 00:10:34,763 --> 00:10:35,423 things. 140 00:10:35,423 --> 00:10:38,863 But that's where the promise of AI really can deliver. 141 00:10:39,163 --> 00:10:43,683 And there's some really interesting stuff being built now, but if you, what's the good of it? 142 00:10:43,683 --> 00:10:47,183 If you can only get 80 % of the way there, 85 % of the way there. 143 00:10:47,183 --> 00:10:56,191 especially for a lot of clients or customers that feel good about the way things are working today generally. 144 00:10:56,191 --> 00:11:03,187 you know, I think, and we can talk about, you know, maybe what makes for a good startup or the things that we look for or not. 145 00:11:03,187 --> 00:11:06,939 And you talked about the industry and its pace of change. 146 00:11:07,020 --> 00:11:10,583 You do have to remember that, you know, two things are really important here. 147 00:11:10,583 --> 00:11:15,617 One, if we want to talk about law firms specifically, these are partnerships at the end of the day. 148 00:11:15,631 --> 00:11:19,052 And yes, they are getting more organized from a top-down perspective. 149 00:11:19,052 --> 00:11:24,335 And, you know, I'm not sure if the role CIO or COO existed 10 years ago. 150 00:11:24,335 --> 00:11:27,756 And if they did, they certainly were all held by attorneys. 151 00:11:27,756 --> 00:11:28,856 And that is changing. 152 00:11:28,856 --> 00:11:34,159 And so there's increasingly some top-down uh organization, but these are partnerships. 153 00:11:34,159 --> 00:11:37,920 each partnership takes time to make decisions. 154 00:11:38,180 --> 00:11:43,842 And then also a reality of uh it's been an incredibly lucrative period of time for law firms. 155 00:11:43,842 --> 00:11:45,123 And to go in and 156 00:11:45,732 --> 00:11:51,647 as a startup, pitch them on why you're going to help make them better when things are pretty good for them right now. 157 00:11:51,647 --> 00:11:59,364 So there are some forces that have to be appreciated as you think about innovating and disrupting in this space. 158 00:11:59,810 --> 00:12:06,515 Yeah, I mean, as Richard Susskin says, it's hard to tell a roomful of millionaires they're doing it wrong, you know? 159 00:12:06,856 --> 00:12:14,563 And I actually think that the partnership model is a major impediment to innovation and scale. 160 00:12:14,563 --> 00:12:16,434 And it's not just the partnership model. 161 00:12:16,434 --> 00:12:19,207 It's the fact that there are cash basis accounting. 162 00:12:19,207 --> 00:12:24,391 There's very little um adoption of R &D. 163 00:12:24,391 --> 00:12:26,795 um So if you look at it... 164 00:12:26,795 --> 00:12:31,628 Partnerships by themselves aren't necessarily limiting the big four their partnerships. 165 00:12:31,628 --> 00:12:41,034 So, and they range anywhere from Deloitte at the high end around 90 billion and um KPMG at the bottom end at 40, 45 billion. 166 00:12:41,034 --> 00:12:51,360 So they've managed to scale, but the largest law firm on earth is K &E and they're under 8 billion wouldn't even qualify for the fortune 500 if they were a public company, which 167 00:12:51,360 --> 00:12:52,300 they're not. 168 00:12:52,300 --> 00:12:53,941 So like, 169 00:12:53,977 --> 00:13:00,762 You can scale a partnership, it has to be, think it's the, alluded to it. 170 00:13:00,762 --> 00:13:09,448 It's the way that law firms empowering non-lawyers and bringing in professional management has been a challenge. 171 00:13:09,448 --> 00:13:10,727 There's been friction to that. 172 00:13:10,727 --> 00:13:12,407 Well, it's interesting. 173 00:13:12,407 --> 00:13:17,747 I don't know how much time you have reserved for us today, but we could now, I'm now convinced we could spend the rest of the day. 174 00:13:17,747 --> 00:13:25,607 Like the topic you just brought up about the part of comparing law firms to the big four accounting. 175 00:13:26,227 --> 00:13:28,707 And we put consulting in that bucket too. 176 00:13:28,707 --> 00:13:35,167 think there are fantastic analogies as you think about where this industry goes in the next five or 10 years. 177 00:13:35,167 --> 00:13:38,022 And you think about the role that technology plays. 178 00:13:38,022 --> 00:13:46,874 what that can do from a service delivery perspective, then means the role of an attorney will change and it will increasingly be outward facing. 179 00:13:46,874 --> 00:13:58,947 It will increasingly be more client focused and that type of consultative approach, results driven is where we think the industry is heading and it's fascinating and it's 180 00:13:58,947 --> 00:14:05,979 gonna be bumpy roads to get there, but we think the best law firms in the world are those that are gonna take that model and approach. 181 00:14:05,979 --> 00:14:16,895 from maybe big four, maybe some of largest consulting firms in the world and think about how you deliver a full scale model for your clients that is results oriented. 182 00:14:16,895 --> 00:14:22,177 And I think it's fascinating uh what this industry will look like in the journey to get to that point. 183 00:14:22,805 --> 00:14:30,011 Yeah, we are getting ahead of ourselves because there's so many things I want to say right now, um but I'm going to hold them off because we got a killer agenda here. 184 00:14:30,011 --> 00:14:33,734 um So what do you guys look for in a startup? 185 00:14:33,734 --> 00:14:37,878 Let's kind of uh reel that back. 186 00:14:37,878 --> 00:14:46,265 like um we know obviously a legal focus um and we you mentioned the stage, but what are some other attributes? 187 00:14:46,265 --> 00:14:50,028 mean, we are we are kind of AI adjacent. 188 00:14:50,028 --> 00:14:51,649 We're not at our core. 189 00:14:51,649 --> 00:14:52,810 That's not what we do. 190 00:14:52,810 --> 00:15:07,561 uh We enable, so InfoDash for people that don't know, it's an internet extranet platform and uh it is built on M365 and Azure and we deploy in the client's tenant, which, and we 191 00:15:07,561 --> 00:15:18,749 have a component called integration hub that uh taps into all the backend data sources that a law firm uses and then presents a unified security trimmed. 192 00:15:19,177 --> 00:15:28,426 API that respects ethical walls that they can then light up all of Microsoft services like Azure AI search, Azure open AI. 193 00:15:28,426 --> 00:15:32,670 So we enable law firms to take advantage and co-pilot. 194 00:15:32,670 --> 00:15:42,058 um We enable law firms to leverage the capabilities that Microsoft provides, but we're not really like an AI company, so to speak. 195 00:15:42,279 --> 00:15:45,104 what are the key ingredients that you look for? 196 00:15:45,104 --> 00:15:46,985 Yeah, you you hit on something there. 197 00:15:46,985 --> 00:15:55,089 You talked about like the enablement of what you allow a law firm to do to leverage Microsoft and all of its capabilities. 198 00:15:55,089 --> 00:16:00,932 Like we would view that as a wedge or like sometimes referred to as like the tippy point of the spear. 199 00:16:00,932 --> 00:16:09,997 Like we want to see a company that has something that is a clear right to win, uh driving a value prop for a customer. 200 00:16:09,997 --> 00:16:14,811 And they understand that intimately and they want to drive it home and keep driving it home. 201 00:16:14,811 --> 00:16:23,905 And there's, you know, we're investing at the earliest stages and, know, we love thinking about, um, you know, as venture investors, businesses that can be a platform and can take 202 00:16:23,905 --> 00:16:24,615 over the world. 203 00:16:24,615 --> 00:16:25,216 And that's great. 204 00:16:25,216 --> 00:16:30,478 And we, hope we can invest in many of those, businesses over, you know, my career, our careers. 205 00:16:30,478 --> 00:16:40,797 Um, that being said, the term platform gets overused, you know, an infinite amount in venture and so many businesses never really reached that promise of being a platform. 206 00:16:40,797 --> 00:16:41,927 And that's okay. 207 00:16:41,927 --> 00:16:50,490 So we want to see if there's a clear right and right to win in a wedge as to why you can sell a customer, why you can drive a value prop for someone. 208 00:16:50,511 --> 00:16:56,873 I'd say tech, we're certainly looking for some type of differentiated technology solution, access to data. 209 00:16:56,913 --> 00:16:58,434 You brought up AI. 210 00:16:58,434 --> 00:17:01,075 Again, we can talk all day about that as well. 211 00:17:01,135 --> 00:17:01,976 You know, it's interesting. 212 00:17:01,976 --> 00:17:10,225 A uh couple of years ago, I think there was, as AI was still becoming kind of commercially available. 213 00:17:10,225 --> 00:17:16,059 We started seeing AI pop up and pitch decks and it was people throwing it out there to get the AI bump. 214 00:17:16,159 --> 00:17:22,604 The reality is in the world we live in today, if you're not leveraging it in some form or fashion, you're putting yourself in extreme disadvantage. 215 00:17:22,604 --> 00:17:28,468 It doesn't have to be the front end of the platform as you kind of acknowledge, like that's not exactly who you are. 216 00:17:28,468 --> 00:17:34,392 But if you're not weaving that into your DNA as a firm, like you're an extreme disadvantage. 217 00:17:34,392 --> 00:17:37,534 The worst this technology will ever be is what it is today. 218 00:17:37,534 --> 00:17:39,462 It's going to be better tomorrow. 219 00:17:39,462 --> 00:17:48,000 And if you're not thinking about how you leverage AI, at least at a bare minimum internally to drive efficiencies, it's probably not a technology solution that we're super 220 00:17:48,000 --> 00:17:50,522 jazzed about partnering with. 221 00:17:50,522 --> 00:18:01,031 um You know, I think we talked a little bit about the legal industry and some of the heritage and some of the status quo. 222 00:18:01,031 --> 00:18:05,925 And so we do want to make sure that we're investing in founders that are building businesses that understand. 223 00:18:06,075 --> 00:18:09,506 that you have to fit within typically some type of distribution model. 224 00:18:09,506 --> 00:18:14,307 You have to fit within some type of historical way uh to enter these firms. 225 00:18:14,307 --> 00:18:20,639 And, you know, we love the, the brash confidence of we're going to change everything and we're going to change the model. 226 00:18:20,679 --> 00:18:24,420 can be a long, lonely road to take that path. 227 00:18:24,420 --> 00:18:34,133 And so, uh you know, a little healthy bit of that is great, but also recognizing that sometimes you can supercharge your growth by weaving into an existing distribution layer. 228 00:18:34,133 --> 00:18:35,143 And so we want to think. 229 00:18:35,143 --> 00:18:38,403 want to make sure someone's thought about that. 230 00:18:38,403 --> 00:18:40,303 And typically that lends itself to the human side. 231 00:18:40,303 --> 00:18:42,063 And that means founder market fit. 232 00:18:42,063 --> 00:18:47,123 Someone that understands that, what they're dealing with here in legal. 233 00:18:47,243 --> 00:18:50,363 know, and I think I'd certainly be doing myself a disservice. 234 00:18:50,363 --> 00:18:57,803 at the end of the day, like we're investing in, in entrepreneurs that have an idea, maybe a little bit of traction, a product. 235 00:18:58,003 --> 00:19:02,919 It's, it's, you know, I've used the horse, the horse racing analogy, you got the track. 236 00:19:02,919 --> 00:19:04,419 You got the horse, you got the jockey. 237 00:19:04,419 --> 00:19:09,759 At the end of the day, we're ready to check to a jockey to help get this horse around the track. 238 00:19:10,539 --> 00:19:13,639 there's a reality of that. 239 00:19:13,639 --> 00:19:22,299 And there's also not just backing a great entrepreneur and puts you in that bucket of elite founders in our portfolio. 240 00:19:22,459 --> 00:19:24,579 it's also life is too short. 241 00:19:24,579 --> 00:19:26,439 You want to work with the people you want to work with. 242 00:19:26,439 --> 00:19:32,251 And so there's an aspect here as well of just getting good people around the table, people we trust. 243 00:19:32,251 --> 00:19:40,499 people we wanna be in the same room with, people we wanna have dinner with and things like that, and people that we get excited about waking up every day to try to make you as 244 00:19:40,499 --> 00:19:41,921 successful as possible. 245 00:19:42,124 --> 00:19:42,444 Yeah. 246 00:19:42,444 --> 00:19:43,684 And that goes both ways. 247 00:19:43,684 --> 00:19:55,297 I mean, from a founder perspective too, and you know, I don't take it for granted that we're, um, in a place where we don't have immediate, like kind of series a type needs. 248 00:19:55,297 --> 00:19:58,678 Like I feel very fortunate for that and I know it's not the norm. 249 00:19:58,678 --> 00:20:00,118 Yeah, I do. 250 00:20:00,158 --> 00:20:09,401 And you know, when I look at like, I get to, I get no joke, 15 to 20 emails a week from VCs. 251 00:20:09,401 --> 00:20:11,195 It is, it's crap. 252 00:20:11,195 --> 00:20:12,552 all your days responding to this. 253 00:20:12,552 --> 00:20:14,861 You can tell them to send them to my way. 254 00:20:15,681 --> 00:20:16,361 them at all. 255 00:20:16,361 --> 00:20:17,261 I can't. 256 00:20:17,261 --> 00:20:22,361 I could fill up my calendar with just conversations and we don't need money. 257 00:20:22,361 --> 00:20:24,941 So I think that makes them try even harder. 258 00:20:26,021 --> 00:20:36,281 initially I thought why we were getting hit up so much was because of our growth is very visible on LinkedIn. 259 00:20:36,281 --> 00:20:39,061 I mean, you just look at our head count chart, right? 260 00:20:39,301 --> 00:20:39,893 Yeah. 261 00:20:39,893 --> 00:20:43,765 know, I'm surprised more founders don't take advantage of it. 262 00:20:43,765 --> 00:20:55,448 uh Honestly, and obviously like we're sitting here today, like you are building this interconnected tissue within the industry, your presence on LinkedIn, the employee 263 00:20:55,448 --> 00:21:00,169 account, as you're announcing partnerships, as you're announcing customers, I mean, it's visible. 264 00:21:00,169 --> 00:21:03,050 ah And that success breeds on itself. 265 00:21:03,050 --> 00:21:05,031 And so uh keep doing it. 266 00:21:05,031 --> 00:21:05,611 We love it. 267 00:21:05,611 --> 00:21:09,323 Yeah, people, man, people, I don't know why it's not hard. 268 00:21:09,323 --> 00:21:14,405 didn't, I was talking to um Stephanie Gudos from Gunderson. 269 00:21:14,405 --> 00:21:21,637 She's got a great social media presence and we were kind of comparing notes and she's like, I didn't, I never had a plan. 270 00:21:21,637 --> 00:21:24,169 I just jumped in and started doing, was like, me too. 271 00:21:24,169 --> 00:21:26,309 Like I didn't have a plan with this. 272 00:21:26,309 --> 00:21:29,691 Like I just, I just jumped in and said, you know what? 273 00:21:29,691 --> 00:21:35,659 I'm going to start writing about things that I'm deep on that I'm passionate about and I'm going to be authentic. 274 00:21:35,659 --> 00:21:37,171 and going to keep at it. 275 00:21:37,713 --> 00:21:38,374 That was it. 276 00:21:38,374 --> 00:21:39,210 There was no... 277 00:21:39,210 --> 00:21:41,762 in those last two pieces that you do exceptionally well. 278 00:21:41,762 --> 00:21:44,575 There is an aspect of just being open and vulnerable about this. 279 00:21:44,575 --> 00:21:51,190 And we can say the same about the things that we're doing and the willingness to get on a forum like this. 280 00:21:51,190 --> 00:21:52,571 just, don't have all the answers. 281 00:21:52,571 --> 00:21:53,202 Here's what we think. 282 00:21:53,202 --> 00:21:54,273 We're not sure. 283 00:21:54,273 --> 00:22:04,441 And they're informed by these things, but we rely on the help and expertise of everyone in our network and then the wherewithal just to keep at it. 284 00:22:04,441 --> 00:22:07,883 I mean, think those two things are all the difference in the world. 285 00:22:08,023 --> 00:22:12,655 Pushing a flywheel, man, you gotta keep pushing it if you wanna generate momentum. 286 00:22:12,755 --> 00:22:17,225 All right, let's talk quickly about the Legal Tech Lab and then I wanna get into the Law Firm 2.0. 287 00:22:17,225 --> 00:22:18,557 That's the really fun stuff. 288 00:22:18,557 --> 00:22:22,259 But the Legal Tech Lab is really interesting to me. 289 00:22:22,259 --> 00:22:26,881 It almost feels like kind of a Y Combinator for Legal Tech. 290 00:22:26,881 --> 00:22:27,301 Is it? 291 00:22:27,301 --> 00:22:28,601 Is that what it is? 292 00:22:28,919 --> 00:22:29,540 That's right. 293 00:22:29,540 --> 00:22:31,381 It's it's very interesting. 294 00:22:31,381 --> 00:22:45,044 um So and I'll we will I'll save the ploy on uh Law Firm 2.0 because that is a key theme of what we're looking for in in the labs program, but um Just at a high level. 295 00:22:45,044 --> 00:22:46,017 Yes, it is. 296 00:22:46,017 --> 00:22:50,440 It's a program um Some have kind of coined is a little bit of an accelerator. 297 00:22:50,440 --> 00:22:54,299 I'm not sure we know exactly what we want to call from that perspective 298 00:22:54,299 --> 00:22:55,449 But it is a program. 299 00:22:55,449 --> 00:23:00,122 It's a platform that allows us to work with the earliest stage of entrepreneurs. 300 00:23:00,122 --> 00:23:12,527 Those that have an idea, a deck, they have a thesis of something that they think can truly disrupt something in kind of the world we live in today of legal. 301 00:23:12,547 --> 00:23:19,571 And it gives us an opportunity to work with those entrepreneurs uh to bring our network of advisors around the table. 302 00:23:19,571 --> 00:23:20,831 um 303 00:23:21,157 --> 00:23:28,552 And then we already kind of announced some uh that are working in the labs program with us, as well as there's a host of others that will be announced over time. 304 00:23:28,552 --> 00:23:30,654 But this is a, it's programmatic. 305 00:23:30,654 --> 00:23:41,472 It allows us to quickly write a small check, get on the inside ah and help these entrepreneurs leverage some of our resources to hopefully get to that stage where yes, we 306 00:23:41,472 --> 00:23:45,625 want to back up the truck, write a meaningful, you know, a more meaningful check. 307 00:23:45,625 --> 00:23:47,486 ah But we think it's going to be great. 308 00:23:47,486 --> 00:23:48,872 and, uh 309 00:23:48,872 --> 00:23:50,792 You know, we're confident it's going to be successful. 310 00:23:50,792 --> 00:23:58,932 We're confident we're going to help, you know, seed, if you want to call that some incredible businesses, but we also know it's going to be, um, it's going to be great for 311 00:23:58,932 --> 00:23:59,932 the industry. 312 00:24:00,132 --> 00:24:02,812 Um, maybe some of those people that weren't willing to take that risk. 313 00:24:02,812 --> 00:24:12,852 don't really know how to go out and raise capital yet, but Hey, in a very short little application process, a couple of interviews, is there a capacity in which we could, um, 314 00:24:12,852 --> 00:24:15,412 provide our platform to Bayer to help these entrepreneurs? 315 00:24:15,412 --> 00:24:18,119 And yes, you use the analogy of YC. 316 00:24:18,119 --> 00:24:22,939 We think very highly of Y Combinator, as do I think most people. 317 00:24:22,939 --> 00:24:25,819 They've built a very special model. 318 00:24:25,819 --> 00:24:32,819 This is not necessarily our take on it, but it's a version of it, and it's highly legal specific as a reminder. 319 00:24:32,819 --> 00:24:41,359 So the great thing is that with every single one of our businesses that comes through labs, they benefit from every other investment we've made over the history of our firm. 320 00:24:41,359 --> 00:24:45,639 And all of this knowledge and expertise compounds on itself. 321 00:24:45,659 --> 00:24:49,761 such that our ability to be helpful for the next one is amplified. 322 00:24:50,002 --> 00:24:51,943 we're really pumped, we're excited. 323 00:24:51,943 --> 00:25:01,428 think um within Kid Junon, I think we had uh over 100 applications after like 72 hours of launching. 324 00:25:01,428 --> 00:25:04,650 ah And uh we're kind of off to the races. 325 00:25:04,650 --> 00:25:07,351 It continues to compound from there. 326 00:25:07,501 --> 00:25:09,181 Very cool, Very cool. 327 00:25:09,181 --> 00:25:10,321 Well, let's talk about law. 328 00:25:10,321 --> 00:25:12,321 We're just over the halfway point. 329 00:25:12,321 --> 00:25:14,861 I want to talk about law firm 2.0. 330 00:25:14,861 --> 00:25:18,121 So I've been writing about big law 2.0. 331 00:25:18,121 --> 00:25:24,441 I think I coined the term, but I'm sure somebody used it before me, but I've been really latched. 332 00:25:24,441 --> 00:25:25,441 I like it too. 333 00:25:25,441 --> 00:25:27,801 Let's say I invented it. 334 00:25:28,461 --> 00:25:36,576 But I've been writing about this because it's something I think about very deeply because we are 100 % of our business is dependent on 335 00:25:36,576 --> 00:25:47,351 large law firms and how successful or not they are in making this transition to what's coming next is also going to impact our success. 336 00:25:47,492 --> 00:25:47,922 Right. 337 00:25:47,922 --> 00:25:58,697 So, um, I see lots of barriers, uh, to getting to where we need, ultimately need to go like fundamental foundational barriers. 338 00:25:58,697 --> 00:26:04,760 talked a little bit about, the partnership model and cash basis accounting and R and D being a foreign concept. 339 00:26:04,760 --> 00:26:06,341 Um, 340 00:26:06,889 --> 00:26:19,132 I also think that the, what we were talking about with professional management, um, I, posted a blueprint, uh, for big law 2.0 how to transition. 341 00:26:19,132 --> 00:26:20,829 And I think it's a good idea. 342 00:26:20,829 --> 00:26:23,473 I didn't, I didn't come up with it myself. 343 00:26:23,473 --> 00:26:31,336 I stole it from somebody who was talking about it in a different context, but it's essentially where a law firm spins up a C corp. 344 00:26:31,336 --> 00:26:36,997 Uh, and when I say spin up, mean, separate entity, not a wholly owned subsidiary separate entity. 345 00:26:37,193 --> 00:26:49,918 and starts investing maybe 20 % of net proceeds into building out tech-enabled legal services, a delivery machine within that. 346 00:26:49,978 --> 00:27:03,774 And what I think the C-Corp model gives that the current state doesn't is, well, A, you typically have lot of legacy. 347 00:27:03,774 --> 00:27:04,725 There's retirement. 348 00:27:04,725 --> 00:27:06,085 uh 349 00:27:06,453 --> 00:27:09,775 obligations associated with the existing firm. 350 00:27:09,775 --> 00:27:15,018 There's all the decision-making in a traditional C-corp. 351 00:27:15,018 --> 00:27:23,843 You've got investors that elect a board that install and hold accountable management, and you have decision-making that happens differently. 352 00:27:23,843 --> 00:27:28,024 And that management layer is empowered. 353 00:27:28,165 --> 00:27:29,886 And it won't be lawyers. 354 00:27:29,886 --> 00:27:36,073 mean, there may be some lawyers in there, but it won't be exclusively lawyers like much of leadership is today. 355 00:27:36,073 --> 00:27:37,416 in big law. 356 00:27:37,416 --> 00:27:39,300 yeah, I write about it a lot. 357 00:27:39,300 --> 00:27:43,919 um I thought that catalyst article did a really good job um writing it. 358 00:27:43,919 --> 00:27:48,037 What's your take on law firm 2.0? 359 00:27:48,274 --> 00:27:51,945 Yeah, and it's fascinating. 360 00:27:51,945 --> 00:27:56,277 It's what we spend the preponderance of our days thinking about here at the Legal Tech Fund. 361 00:27:56,277 --> 00:27:59,888 It's really what we think the future of the industry is. 362 00:27:59,888 --> 00:28:08,472 And I think the line that you took us down there was relative to, call it big law, and how they think about getting to the future. 363 00:28:08,472 --> 00:28:10,892 And I think it's going to be fascinating to see that journey. 364 00:28:10,892 --> 00:28:17,835 Those that are willing to make the investment, and you talked about maybe tactically some of the things they could do. 365 00:28:18,167 --> 00:28:28,522 I think it's about weaving modern technology into the fabric of what they do to try to think through how do you deliver for clients in a world five years from now where their 366 00:28:28,522 --> 00:28:31,873 needs and wants are different and their expectations are far different. 367 00:28:31,913 --> 00:28:33,994 And I think it's going to be interesting. 368 00:28:33,994 --> 00:28:42,788 um we have obviously a lot of partners um of ours here at the Legal Tech Fund that represent many of those big law firms. 369 00:28:42,788 --> 00:28:46,149 And we want to play a role in trying to help them get there. 370 00:28:46,393 --> 00:28:52,803 I will say like we believe in law firm 2.5 or 3.0. 371 00:28:52,803 --> 00:29:03,011 uh In some of that future we believe in, we're not sure that law firm is even like, they're not a firm, like they're a technology company. 372 00:29:03,193 --> 00:29:14,819 And you know, it's the incumbents, the AMLaw 200, they have every right and ability to make these investments and to own their kind of share they have. 373 00:29:15,023 --> 00:29:26,216 Obviously at our end of the spectrum, we're intrigued by the companies that are starting today as a pure technology company with no law firm, no lawyer around the table thinking 374 00:29:26,216 --> 00:29:32,928 through how they deliver some value prop along kind of the value chain of legal services. 375 00:29:32,968 --> 00:29:37,249 And maybe at the end of the line, there is an attorney as needed. 376 00:29:37,249 --> 00:29:44,621 uh you know, we're entering a new world or paradigm where there's some shifting in kind of regulatory expectations here. 377 00:29:44,780 --> 00:29:48,602 And do you need to be an attorney to own a law firm? 378 00:29:48,602 --> 00:29:53,703 And ah some of those, they've been breaking down internationally. 379 00:29:53,724 --> 00:29:56,525 They're starting to break down in certain states. 380 00:29:56,525 --> 00:30:00,446 And ah it's a fascinating time. 381 00:30:00,446 --> 00:30:05,068 we've been kicking the can of how do we organize around this and how do we talk about it? 382 00:30:05,068 --> 00:30:12,251 And one of the things we talked about is the law firm 2.0, as we call it, doesn't start. 383 00:30:12,251 --> 00:30:16,474 with a partner or managing partner, it starts with a line of code. 384 00:30:16,474 --> 00:30:19,815 Like it's a technology company at its ethos. 385 00:30:19,815 --> 00:30:27,730 And then it thinks through at the end, how do I provide that street strategic level of guidance, that advisory, that, that consultative approach to clients. 386 00:30:27,730 --> 00:30:32,323 And so that's what we're intrigued by with this concept of law firm 2.0. 387 00:30:32,323 --> 00:30:40,227 And, you know, as we think about the labs that we just talked about, or we think about our core fun, you know, we'd be disappointed if 388 00:30:40,227 --> 00:30:46,393 over half of our capital is not deployed in some version or concepts of these types of models. 389 00:30:46,393 --> 00:30:49,726 And they're baby steps to get there and we'll play along that spectrum. 390 00:30:49,726 --> 00:30:53,559 But this is the future and this is what we think about all day. 391 00:30:54,059 --> 00:30:54,649 Yeah. 392 00:30:54,649 --> 00:31:00,013 Well, here's the good news about being a tech company as opposed to a traditional business. 393 00:31:00,013 --> 00:31:01,433 It's the multiple. 394 00:31:01,433 --> 00:31:06,986 So you typically sell for a multiple of revenue instead of a multiple of EBITDA, right? 395 00:31:06,986 --> 00:31:09,308 So um you're a finance guy. 396 00:31:09,308 --> 00:31:10,719 You're familiar. 397 00:31:10,719 --> 00:31:15,061 I've been an entrepreneur for a long time, owned a lot of different types of businesses. 398 00:31:15,061 --> 00:31:17,032 My wife and I own five gyms here in St. 399 00:31:17,032 --> 00:31:17,523 Louis. 400 00:31:17,523 --> 00:31:20,084 uh Pretty successful. 401 00:31:20,084 --> 00:31:21,739 But if we were to sell those 402 00:31:21,739 --> 00:31:26,581 businesses, they would sell between three and four times EBITDA. 403 00:31:26,581 --> 00:31:32,513 If we were to sell InfoDash, it would sell for in today's market, six to eight times revenue and maybe more. 404 00:31:32,513 --> 00:31:35,325 um Yeah, right. 405 00:31:35,325 --> 00:31:40,607 So if you do the math on that, let's say you're operating at a 20 % margin, right? 406 00:31:40,607 --> 00:31:43,518 And you've got a uh $10 million business. 407 00:31:43,518 --> 00:31:46,920 That means you're making $2 million a year. 408 00:31:46,920 --> 00:31:50,081 Bottom line, you'll sell it for six to eight. 409 00:31:50,535 --> 00:31:51,377 Yeah. 410 00:31:51,969 --> 00:31:52,639 Sure. 411 00:31:52,639 --> 00:31:53,959 EBITDA multiple. 412 00:31:53,959 --> 00:31:59,942 If you're 10 million in revenue and you sell for six to eight times that, it's 60 to 80 million. 413 00:31:59,942 --> 00:32:11,456 So like, I feel like the earning potential, um it's going to be a tough transition and there's going to be fewer, there's going to be much less head count in the tech company by 414 00:32:11,456 --> 00:32:12,496 design, right? 415 00:32:12,496 --> 00:32:17,608 You're selling tech, not your inventory isn't people's hours. 416 00:32:17,608 --> 00:32:19,829 It's your tech, right? 417 00:32:19,865 --> 00:32:21,709 Um, but man, that's a pretty picture. 418 00:32:21,709 --> 00:32:24,071 I feel like, I feel like lawyers can get behind that. 419 00:32:24,071 --> 00:32:24,671 That's right. 420 00:32:24,671 --> 00:32:25,591 You think so, right? 421 00:32:25,591 --> 00:32:28,031 You can put the math on paper and explain it. 422 00:32:28,031 --> 00:32:29,391 I think that's right. 423 00:32:29,871 --> 00:32:41,471 I think your point is valid on thinking through how the market might perceive a multiple of a business at some level based on services or technology. 424 00:32:41,511 --> 00:32:50,623 I think what intrigues us is the ability to provide a similar service at such a higher margin, like the same unit of output. 425 00:32:50,743 --> 00:33:02,061 whether or not it's historic legacy expectation legal services versus call it law firm 2.0, that same unit of output should be able to be provided at a significantly higher 426 00:33:02,061 --> 00:33:02,421 margin. 427 00:33:02,421 --> 00:33:09,416 It's for all the same reasons you said, repetitive using technology and using less people and human to do that. 428 00:33:09,416 --> 00:33:12,548 so um we're intrigued by the opportunity. 429 00:33:12,548 --> 00:33:19,522 And frankly, what that can mean for the end buyer, and especially I think we're intrigued by what that can mean for the end consumer. 430 00:33:19,522 --> 00:33:20,455 um 431 00:33:20,455 --> 00:33:22,615 Not everything we do is enterprise. 432 00:33:22,695 --> 00:33:27,315 Many of it is SMB or consumer. 433 00:33:27,495 --> 00:33:37,755 In a world we live in today where hourly wages are 20, 30 bucks in this country, depending on where you are on average versus, and I won't even speculate depending on who's 434 00:33:37,755 --> 00:33:41,495 listening here, but what the hourly rates of attorneys are. 435 00:33:41,755 --> 00:33:45,675 You'd do the math and legal services are largely only addressable. 436 00:33:45,675 --> 00:33:47,575 It's like the one or 2 % out there. 437 00:33:47,575 --> 00:33:49,215 Good legal services. 438 00:33:49,768 --> 00:34:00,513 you know, the promise of what the law firm 2.0 can do is it can provide access to legal services to a group of people that have never had access to good legal services. 439 00:34:00,674 --> 00:34:01,954 And like, that's a great thing. 440 00:34:01,954 --> 00:34:05,636 And ah it's good business as well. 441 00:34:05,636 --> 00:34:11,640 And so we think about this, I alluded to this trillion dollar global legal services market. 442 00:34:11,640 --> 00:34:17,323 We think that TAM is increasing because of the law firm 2.0 and it's exciting and it's got good... 443 00:34:17,323 --> 00:34:18,265 uh 444 00:34:18,265 --> 00:34:20,378 implications for access to justice. 445 00:34:20,378 --> 00:34:21,479 It's good business. 446 00:34:21,479 --> 00:34:25,153 And, you know, we're excited about the role that we can play in that. 447 00:34:25,741 --> 00:34:37,001 Let's talk a little bit about consolidation because I would bet my next paycheck that we're going to have a significant amount of consolidation. 448 00:34:37,061 --> 00:34:42,081 And one reason is the legal market, just how incredibly fragmented it is. 449 00:34:42,081 --> 00:34:44,541 My listeners have heard this stat many times. 450 00:34:44,541 --> 00:34:51,161 If you add up the revenues of the AmLaw 100, it's about $140 billion. 451 00:34:52,749 --> 00:34:55,869 That's maybe a Fortune 150 customer. 452 00:34:56,289 --> 00:34:58,009 I Nvidia is $4 trillion. 453 00:34:58,009 --> 00:35:02,409 That's like a rounding error on the top 100 law firms, right? 454 00:35:02,409 --> 00:35:10,629 The top five law firms only control about 6 % of the total legal spend in the United States. 455 00:35:10,629 --> 00:35:19,789 The big four have 98 % on the audit side of public company audit work. 456 00:35:19,789 --> 00:35:20,342 Yeah. 457 00:35:20,342 --> 00:35:21,805 an interesting analogy there. 458 00:35:22,039 --> 00:35:22,669 crazy. 459 00:35:22,669 --> 00:35:26,672 It's crazy just how different in terms of fragmentation. 460 00:35:27,253 --> 00:35:34,329 and I think that, you know, one of the reasons for all the fragmentation, one is you've only had lawyers in leadership. 461 00:35:34,329 --> 00:35:38,202 haven't had a traditional, you haven't had a scalable business model. 462 00:35:38,202 --> 00:35:40,304 It's hard to scale people. 463 00:35:40,304 --> 00:35:48,140 And it's also really difficult when you don't bring in professional managers, like professional management wants, they want stock options. 464 00:35:48,140 --> 00:35:50,012 They're probably going to get paid more than your lawyers. 465 00:35:50,012 --> 00:35:51,533 They're not going to like that. 466 00:35:51,666 --> 00:35:54,031 Um, so it's just not been a scalable. 467 00:35:54,031 --> 00:35:58,152 How do you see, are we going to have in five years Amal 200? 468 00:35:58,152 --> 00:36:00,336 Like, what do you, what do see that looking like? 469 00:36:00,336 --> 00:36:02,857 Yeah, it's going to be fascinating. 470 00:36:02,857 --> 00:36:05,198 I think you're absolutely right. 471 00:36:05,198 --> 00:36:10,660 And we can point to other industries as analogies for where this may go in legal. 472 00:36:10,660 --> 00:36:19,443 If you think about, let's go back 20 years or for the past 20 years, you take healthcare as an example, and you think about kind of physician practice, roll-ups and the 473 00:36:19,443 --> 00:36:22,304 consolidation going on in healthcare. 474 00:36:22,304 --> 00:36:29,369 You just talked about CPA firms and that's maybe a little bit more of a recent, call it last five years or so, but 475 00:36:29,369 --> 00:36:37,454 very, uh a market undergoing a significant amount of consolidation, wealth management being another aggregation of these platforms together. 476 00:36:37,454 --> 00:36:46,592 And I think we're entering a period where the next five, 10 years will be dominated by a significant amount of consolidation in the legal world. 477 00:36:46,592 --> 00:36:56,973 um I think the promise of technology and what that can do will allow attorneys to hopefully operate at the highest level. 478 00:36:56,973 --> 00:37:01,427 of their capabilities, their credentials, spending more time with clients, more strategic in nature. 479 00:37:01,427 --> 00:37:12,816 You hopefully can deliver info dash plan, a key role here in um creating that infrastructure, the interconnectivity that hopefully should allow for easier 480 00:37:12,816 --> 00:37:13,897 consolidation. 481 00:37:13,897 --> 00:37:20,563 Attorneys can spend more time doing what they want to do, getting out of the business of law side, which probably they have less interest in doing. 482 00:37:20,563 --> 00:37:23,155 And that lends itself to an opportunity for consolidation. 483 00:37:23,155 --> 00:37:25,423 like absolutely. 484 00:37:25,423 --> 00:37:35,536 And then I think the biggest thing that we've kind of danced around it a little bit in the conversation is again, we're, we're, we're at a point today where for the most part, 485 00:37:35,536 --> 00:37:39,347 private capital has not touched law firm world. 486 00:37:39,347 --> 00:37:44,568 And there's a reason and there's regulatory barriers that have prevented that that is changing. 487 00:37:44,568 --> 00:37:48,109 And so, um, you know, we're starting to see it. 488 00:37:48,109 --> 00:37:51,620 We're seeing some bankers talk about certain assets in market. 489 00:37:51,620 --> 00:37:54,271 We're certainly seeing some cross border things. 490 00:37:54,290 --> 00:37:58,664 thinking about law firms that are emerging and what role could some capital play in that. 491 00:37:58,664 --> 00:38:07,931 And then, you know, I think one of the most interesting things is I don't know if we're perfect clarity yet and we're getting our crystal ball out here. 492 00:38:07,931 --> 00:38:13,115 But as we mentioned, it's been an incredibly lucrative period past five years for law firms. 493 00:38:13,115 --> 00:38:20,431 ah And ah they've been compensated for great work they're doing and delivering for clients. 494 00:38:20,431 --> 00:38:22,609 And certainly on the client side, there's... 495 00:38:22,609 --> 00:38:26,841 aspirations of better service, all those types of things you expect in the industry. 496 00:38:27,061 --> 00:38:33,754 That being said, despite how, and law firms oftentimes get dogged for being sometimes bad business, they're not good at business. 497 00:38:33,754 --> 00:38:37,306 Well, like you get out of the P &L, they're pretty freaking great businesses. 498 00:38:37,306 --> 00:38:44,749 So they're doing something right here, but we're in a world where law firms traditionally think about the world on a year by year basis. 499 00:38:44,749 --> 00:38:48,971 The vast majority of profits get distributed to partners every single year. 500 00:38:49,339 --> 00:38:56,364 Well, private capital and private equity in particular often also gets dogged for being short-term in nature. 501 00:38:56,545 --> 00:39:02,430 But you're talking about, you know, when they think about the world from a three to five year period. 502 00:39:02,430 --> 00:39:12,428 Well, this might be the one time in history where at some point private equity is going to sit on top of legal and be thinking about the world for a longer time horizon than the 503 00:39:12,428 --> 00:39:13,959 underlying industry. 504 00:39:13,959 --> 00:39:19,033 And what that will allow people to do is make investments in the things they've historically ignored. 505 00:39:19,033 --> 00:39:28,550 And we don't believe, or I should say, I don't believe in a world where even some of the largest law firms in the world, when one decides to take a big fat check from someone else 506 00:39:28,550 --> 00:39:39,037 to make those long-term investments, to make them more competitive, to try to take more market share, that the others don't say, man, we should probably do the same thing. 507 00:39:39,037 --> 00:39:41,248 So it's a matter of time. 508 00:39:41,248 --> 00:39:48,203 I don't know if it's in 12 months or 18 months and when some of the regular story stuff works itself out, but it's going to happen. 509 00:39:48,413 --> 00:39:53,337 And uh that's going to kind of going to usher in a period of consolidation in the space. 510 00:39:53,422 --> 00:39:53,942 Yeah. 511 00:39:53,942 --> 00:40:03,942 So it's ABA model rule 5.4 that disallows non-legal ownership of law firms. 512 00:40:03,982 --> 00:40:04,502 So you know what? 513 00:40:04,502 --> 00:40:07,022 There's a lot of complacency around that. 514 00:40:07,142 --> 00:40:10,622 So I've worked with more than half the AmLaw. 515 00:40:10,622 --> 00:40:12,742 I stopped counting at 110 AmLaw firms. 516 00:40:12,742 --> 00:40:14,722 It's definitely more than that. 517 00:40:14,862 --> 00:40:17,122 And so I've had a real good cross-sectional view. 518 00:40:17,122 --> 00:40:21,462 I got a pretty good Rolodex of people that I talk to regularly. 519 00:40:21,565 --> 00:40:27,058 And a lot of people point to a couple of data points that I think are somewhat irrelevant right now. 520 00:40:27,058 --> 00:40:34,352 Like they say, well, the Legal Services Act was 10 years ago in the UK. 521 00:40:34,352 --> 00:40:37,514 And that hasn't changed the market at all. 522 00:40:37,514 --> 00:40:50,801 In fact, non-traditional, the alternative business um entity roles uh or firms have underperformed. 523 00:40:51,037 --> 00:40:52,267 And okay, yeah. 524 00:40:52,267 --> 00:40:55,758 And the big four have tried to make a push in the US market before. 525 00:40:55,758 --> 00:40:59,259 So they're like, yeah, we've tried this and it, eh. 526 00:40:59,259 --> 00:41:03,000 Well, what's different is that the means of legal production have now changed. 527 00:41:03,000 --> 00:41:08,882 So that completely rewrites the equation on in terms of likelihood of success. 528 00:41:08,882 --> 00:41:19,645 But I still hear people that I really respect that are really smart who go, yeah, but, and I feel like they think I'm over indexing on all of this. 529 00:41:19,991 --> 00:41:23,446 transformation talk and I'm like no no you're under indexing. 530 00:41:23,446 --> 00:41:25,640 don't know what do you think? 531 00:41:25,640 --> 00:41:28,543 we're a biased party here, but we certainly believe in that. 532 00:41:28,543 --> 00:41:40,872 And I think, as we've alluded to or talked about, you have to remember that you're telling very successful organizations to think, and to take that risk and challenge when life is 533 00:41:40,872 --> 00:41:41,752 good right now. 534 00:41:41,752 --> 00:41:51,430 ah And so we do think it's those firms that are willing to forego a little bit extra distribution to think about those investments. 535 00:41:51,430 --> 00:41:58,642 and to think about whether or not it's even they're just thinking nuclear to themselves and what they can do to make themselves more competitive. 536 00:41:58,662 --> 00:42:03,443 And it's those firms that are making that starting to make those long-term bets that we think will be most successful. 537 00:42:03,443 --> 00:42:10,725 um it's, I'm not trying to predict the end of the world. 538 00:42:10,725 --> 00:42:13,806 Like we have lots of great law firm partners. 539 00:42:13,806 --> 00:42:17,316 They're going to be around for a long, long period of time, maybe forever. 540 00:42:17,316 --> 00:42:18,867 But. 541 00:42:20,775 --> 00:42:32,295 there's almost no segment of legal services that we don't think AI and technology can play a material role in disrupting, changing the model, playing a factor there. 542 00:42:32,295 --> 00:42:34,775 And so, you I think it's a reality. 543 00:42:34,775 --> 00:42:45,015 And I think to your point, I think you're naive if you really don't think that it will be perverse and it will infiltrate the entire industry. 544 00:42:45,015 --> 00:42:46,015 so it's... 545 00:42:46,539 --> 00:42:49,502 We hope and we're advising our friends, like think about this. 546 00:42:49,502 --> 00:42:50,951 Think about what five years looks like. 547 00:42:50,951 --> 00:42:58,759 Think about what 10 years, know, what do you, maybe another way of thinking, was like, what do you have to believe won't happen for you to keep with the status quo? 548 00:42:58,759 --> 00:43:02,221 It's just like the world's changing very quickly. 549 00:43:02,325 --> 00:43:03,225 Yeah. 550 00:43:03,487 --> 00:43:04,028 Yeah. 551 00:43:04,028 --> 00:43:16,264 The, your point about law firm, like once one law firm, once the rules change and once somebody takes them outside capital. 552 00:43:16,625 --> 00:43:19,627 I saw a really, you know, the other law firms following suit. 553 00:43:19,627 --> 00:43:24,651 saw a good post this morning that said law firms don't buy technology, they buy social proof. 554 00:43:24,651 --> 00:43:27,313 And it is so incredibly true. 555 00:43:27,313 --> 00:43:28,084 It really is. 556 00:43:28,084 --> 00:43:35,159 And you know what, as when we were first starting out and we had no legal resume, it was so hard to get conversations. 557 00:43:35,159 --> 00:43:40,904 Like we had to eat table scraps, like do gigs that we really didn't want to do that weren't in our wheelhouse. 558 00:43:40,904 --> 00:43:42,385 We were just trying to like 559 00:43:42,385 --> 00:43:42,716 Yeah. 560 00:43:42,716 --> 00:43:43,667 paycheck. 561 00:43:43,667 --> 00:43:47,040 And then over time, we built trust and credibility. 562 00:43:47,040 --> 00:43:52,995 And now I can walk into any law firm anywhere and have a credible conversation because we've earned it. 563 00:43:52,995 --> 00:43:54,636 took years. 564 00:43:54,636 --> 00:43:56,438 It took more than a decade. 565 00:43:56,438 --> 00:44:00,561 But um they follow each other like lemmings, right? 566 00:44:00,561 --> 00:44:05,109 It's very much a peer-driven dynamic. 567 00:44:05,109 --> 00:44:07,324 where, what's the firm over there doing? 568 00:44:07,324 --> 00:44:07,926 they're doing that? 569 00:44:07,926 --> 00:44:09,580 Hey, maybe we should think about doing that. 570 00:44:09,580 --> 00:44:15,320 It's great when you're a tech company and you've got lots of momentum because, like, everybody wants to have a conversation. 571 00:44:15,320 --> 00:44:20,964 mean you just got to get to this one inflection point, this one bit of scale and kind of the scales tip in your favor. 572 00:44:20,964 --> 00:44:22,785 And that's for sure. 573 00:44:22,785 --> 00:44:32,952 And again, I think it's, um and I don't want to talk to spirit, people are being thoughtful, they're risk averse, they're thinking through that and they don't want to 574 00:44:32,952 --> 00:44:34,653 upset the apple cart to some extent. 575 00:44:34,653 --> 00:44:43,139 um And I think that some of that mentality is changing and we're seeing it and the great CIOs across the country that 576 00:44:43,331 --> 00:44:54,381 partner with us and are thinking through how do they take their firm to the next step and uh they're testing, they're innovating, they're pushing technology through, but it'll take 577 00:44:54,381 --> 00:44:55,122 time. 578 00:44:55,122 --> 00:44:56,203 There's just no doubt about it. 579 00:44:56,203 --> 00:44:57,313 It'll take time. 580 00:44:57,389 --> 00:45:04,009 Well, that's a really good segue into maybe our final topic because we're almost running out of time. 581 00:45:04,609 --> 00:45:11,069 What do you think the timeline looks like for real fundamental transformation? 582 00:45:11,069 --> 00:45:18,049 Like, I don't think we're going to see big impact to law firm financials in 2025. 583 00:45:18,049 --> 00:45:22,629 I do think that we're going to start to see some of that in 2026. 584 00:45:22,629 --> 00:45:26,509 And it's really hard to predict after that, but 585 00:45:26,509 --> 00:45:28,955 ah How do you see the timeline? 586 00:45:28,955 --> 00:45:33,799 Yeah, you're really putting me on the spot here as a VC predicting exactly the timing here. 587 00:45:33,799 --> 00:45:35,420 I don't want this to be used against me. 588 00:45:35,420 --> 00:45:47,311 um Look, I'd say for the concept of law firm 2.0 as we see it and people innovating out there and doing some of these things uh in a new way, it's here. 589 00:45:47,311 --> 00:45:47,851 It's now. 590 00:45:47,851 --> 00:45:49,512 It is absolutely happening. 591 00:45:49,512 --> 00:45:56,999 Now, like a broader question might be like where, where, yes, where will it be seen publicly or visibly? 592 00:45:56,999 --> 00:45:57,520 And 593 00:45:57,520 --> 00:46:00,923 I think we're a little bit a ways away from that, to be honest. 594 00:46:00,923 --> 00:46:09,510 It's just, um you know, for you or I, or more than likely your listeners that are thinking about this, we will start seeing it. 595 00:46:09,510 --> 00:46:16,015 But on the front of the Wall Street Journal or people seeing it publicly or thinking about I think we're several years away. 596 00:46:16,015 --> 00:46:24,122 But we're already, we're just, seeing people ship away and starting some things and people starting to try to break a little glass and those types of things. 597 00:46:24,122 --> 00:46:25,422 you know, we're seeing it, but... 598 00:46:25,422 --> 00:46:26,463 um 599 00:46:26,913 --> 00:46:32,388 know, thing we do uh internally, we talk about the quote from Bill Gates. 600 00:46:32,388 --> 00:46:46,630 It oftentimes gets uh changed around a little bit, but people often ah underestimate the change that will occur in 10 years, but uh overestimate the change that will occur ah in 601 00:46:46,630 --> 00:46:47,621 one year. 602 00:46:47,621 --> 00:46:51,004 And that kind of 10 year, like maybe now is five years. 603 00:46:51,004 --> 00:46:54,046 Like it is, it's happening so quickly. 604 00:46:54,046 --> 00:46:55,193 ah 605 00:46:55,193 --> 00:46:56,384 with the innovation. 606 00:46:56,384 --> 00:47:00,488 mean, we're days away from GPT-5 coming out. 607 00:47:00,488 --> 00:47:02,350 It's going to be massive. 608 00:47:02,350 --> 00:47:04,933 um So I don't know. 609 00:47:04,933 --> 00:47:06,554 I'm not sure if I answered your question, but. 610 00:47:06,554 --> 00:47:07,615 uh 611 00:47:07,644 --> 00:47:08,695 there is no answer. 612 00:47:08,695 --> 00:47:10,857 It's just really kind of broad brushstrokes. 613 00:47:10,857 --> 00:47:14,031 Like, again, I don't think no impact this year. 614 00:47:14,031 --> 00:47:15,527 Yeah. 615 00:47:15,527 --> 00:47:16,747 with that 100%. 616 00:47:16,747 --> 00:47:21,727 And I would probably say I'm not sure we'll see an impact in things at the law firm financials. 617 00:47:21,727 --> 00:47:25,587 And look, these law firms are like, sophisticated. 618 00:47:25,587 --> 00:47:34,247 They've got great people now as like, you know, business leaders to partner with these attorneys and like, the great ones are going to be taking on these things. 619 00:47:34,247 --> 00:47:43,047 like, their P &L might look different and their balance sheet might look a little different, but many of them are going to be incredibly successful in this journey. 620 00:47:43,127 --> 00:47:43,987 So, 621 00:47:45,338 --> 00:47:46,592 It's going to be interesting. 622 00:47:47,118 --> 00:47:52,478 I just saw an update 58 seconds ago, OpenAI launches GPT-5. 623 00:47:52,478 --> 00:47:53,938 we're there. 624 00:47:58,098 --> 00:47:59,138 It's so true. 625 00:47:59,138 --> 00:47:59,338 All right. 626 00:47:59,338 --> 00:48:01,638 Well, hey, this has been a great conversation. 627 00:48:02,578 --> 00:48:08,229 first question is, how do people find out more about the Legal Tech Fund and the work that you do? 628 00:48:08,229 --> 00:48:09,790 Yeah, Ted, we're very much like yourself. 629 00:48:09,790 --> 00:48:12,200 We try to meet people where they are on all types of platforms. 630 00:48:12,200 --> 00:48:17,012 So come to our website, www.legaltech.com. 631 00:48:17,012 --> 00:48:19,563 We made it very easy for you with the URL. 632 00:48:19,563 --> 00:48:24,555 Find us on LinkedIn, find us on YouTube, and certainly find us in person. 633 00:48:24,555 --> 00:48:25,315 We're on the road. 634 00:48:25,315 --> 00:48:27,546 We're at all major legal tech conferences. 635 00:48:27,546 --> 00:48:28,727 Come say hi. 636 00:48:28,727 --> 00:48:30,637 We'd love to start a conversation. 637 00:48:30,861 --> 00:48:44,520 Speaking of which, you and I are going to do a keynote um presentation at the Legal Tech Connect, is like the sister conference to the KM &I that's been around for about three or 638 00:48:44,520 --> 00:48:45,051 four years. 639 00:48:45,051 --> 00:48:45,561 Patrick D. 640 00:48:45,561 --> 00:48:48,673 Domenico did a great job pulling that together. 641 00:48:48,673 --> 00:48:56,289 And now he's doing a Legal Tech Connect, um is in New York, which I think is different than you guys. 642 00:48:56,289 --> 00:49:00,101 But same kind of general concept, bringing together investors, 643 00:49:00,375 --> 00:49:04,420 tech companies and law firm people and seeing what happens. 644 00:49:04,420 --> 00:49:06,715 So that'll be in October, I think. 645 00:49:06,715 --> 00:49:08,161 That's right, I'm looking forward to it. 646 00:49:08,161 --> 00:49:10,792 uh And I'll even see you next week, right? 647 00:49:10,792 --> 00:49:11,727 Ilta-Con. 648 00:49:11,727 --> 00:49:12,870 that's right. 649 00:49:12,870 --> 00:49:13,461 Good stuff. 650 00:49:13,461 --> 00:49:14,815 All right, well, hey, I appreciate the time. 651 00:49:14,815 --> 00:49:16,259 This has been very insightful. 652 00:49:16,259 --> 00:49:20,264 And um we'll, I guess, see each other next week. 653 00:49:20,264 --> 00:49:21,296 All right, Ted, thank you for having me. 654 00:49:21,296 --> 00:49:23,124 I appreciate it. 655 00:49:23,380 --> 00:49:24,361 Be well. -->