First, here are two things I won’t pitch:
(1) A Business to consumer (B2C) solution; and
(2) A legal referral network.
What I will be pitching is a business to business (B2B) solution. Before I tell you what, let me tell you why (and why not B2C).
Business to consumer is hard! Ask LegalZoom and RocketLawyer. They both have massive B2C product lines. There’s limited up-sell opportunity. Client acquisition is difficult, even with large ad budgets. And if your goal is recurring revenue, retention is next to impossible. The typical consumer doesn’t need on-going legal (document) support.
I’m not saying that B2C isn’t a noble endeavor at #LegalTechSW.
Access to justice is one of the challenges, after all. And while we can debate whether Google and services like LZ and RL increase access to justice (I do here and here), you won’t get me to stay up past my bed time to build a business model around it.
What I do believe in is solving meaningful problems for businesses, law firms included. And as any SF based SaaS business will tell you, the B2B market has a playbook that can be studied and perhaps even mastered. B2B is by no means easy, but compared to B2C which is virtually impossible for legal tech to penetrate, I’ll place my bets on business services.
In the words of Jon Bischke, CEO of Entelo:
“At the end of the day, starting a successful SaaS company seems to boil down to finding a major problem that businesses face and are willing to pay to get rid of and then solving it for them in the best way possible.”
Now for #LegalTechSW, there are a couple of obvious paths I can take for B2B:
- Solve a major problem for law firms; or
- Solve a major problem for businesses that might otherwise be handled by a law firm (but that doesn’t fall into UPL).
I know that Clio, which raised $18 million in Series C funding earlier this year, is successfully penetrating the small and midsize law firm market. I’ve heard great things about their solution. But the limitation is with the total available market. How many small firms can there be? At a monthly cost of $65 per month, Clio, IMHO, neither has a high enough price point, nor a wide enough market to really blow it out. That being said, I’m sure Clio will eventually tilt upward to service big law, which will come with larger ACV.
Personally, if were going to approach the law firm market, I’d go after an existing big law budget– and focus on perfecting a solution currently bundled into a Westlaw or Lexis product. Unfortunately, I think that’s a bigger problem than we can solve in a weekend.
Which leaves me with only one option– and that’s B2B (non-law firm).
I propose we unbundle a single B2B product currently being widely offered by most of the legal document service providers in the market (unsophisticatedly so), and convert it into an enterprise-grade SaaS solution that can be priced for both small and large businesses.
What is it?
A signable, savable, legally compliant, employee handbook (integrated with DocuSign for employee signature, and Box for storage). That’s it!