In the competitive – not to say testosterone-laced – world of legal tech, size generally matters. No surprise then that much of the initial coverage of a massive US$250m investment in the Canadian cloud-based case management provider Clio focused on its sheer extent. It was, proudly announced by a slew of Canadian sources from the website close to its base, Burnaby Now, to the nationally most eminent newspaper as the largest single inward investment in Canadian tech investment since 2000. It has been given an even wider significance. The local MP claimed it an indication of the area’s success and ‘Jill Tipping, CEO of BC Tech Association, said the investment shows “that we can breed unicorns” in the still-burgeoning B.C. tech industry.’ Yet, the most interesting element of this investment may not be the size itself of the investment but the market assessment behind it.
From its base in Vancouver’s suburbs, Clio already has a global reach. It has three Canadian offices supplemented by one in Dublin and LA. This is the pitch from its North American site on the comprehensive nature of its product. It allows you to: ‘Manage your firm, cases, and clients easily from the cloud—and get back more of your day; Manage cases, organise contacts and automate documents Streamline day-to-day processes, and keep cases organized so you can focus on billable work and grow your revenue. Generate bills, run reports and get paid faster Keep track of financials and client accounts with easy-to-use reports and dashboards. Make billing easy with online payments, automated billing, and customized plans; attract potential clients, track their progress and secure their business Create easy-to-use client intake forms, automate client communication—such as emails, reminders, and requests—and organize referrals to seize every opportunity.’ You get the idea even if you are unfamiliar with Clio itself. The UK site adapts to the terms solicitor and recognises the impact of the Solicitors Regulation Authority.
Clio has, by all accounts, a good product and it certainly has the PR to match. Its twitter account has 14,500 follows. Its co-founder, Jack Newton, has an wide public profile. It holds annual conferences, including the Clio Cloud conference in San Diego in October to be addressed by a range of techies and such public luminaries as Glenn Greenwald, Edward Snowden’s lawyer, and where it is savvy enough to have women as only 5-4 down on its announced speakers. It produces an annual legal trends report which gets wide coverage. It produces a range of blogs and guides: it holds webinars. The firm pitches itself to the whole legal profession but has made a particular effort to get the market of small and medium-sized firms. It gets good reviews with pricing for the UK, Europe and North America said to be competitive though found a little high in the not for profit world.
So, Clio is undoubtedly an impressive operation. You can hear Jack Newton interviewed by US doyen legal tech journalist Bob Ambrogi in a recent Lawsites podcast. Clio has raised the money from two pretty impressive sources of venture capital, TCV and JMI Equity. These are serious players with TCV, an early backer of Netflix, Spotify and Airbnb.
For all the coverage of the deal, Mr Newton and Clio are rather shy about exactly how they are going to spend the money. If you reckon that investors like theirs are probably looking for a ten-fold increase in their stake, then their actions are a bet on Clio returning US$2.5bn. In interviews, Mr Newton stresses the opportunities in filling the ‘justice gap’ and meeting, in Richard Susskind’s phrase, ‘the latent legal market’. He wants to ‘redefine’ the future of legal services.
And how will this redefinition be done? Well this is as specific as he gets: ‘The client journey starts well before a client hires you, and well after they pay their final bill. The myriad of tiny interactions that happen before, during, and after a client engages with a law firm can make or break a business. Today, people expect frictionless experiences from start to finish, and we believe this will only become more prominent in years to come. If you aren’t able to deliver the experiences clients expect, they will go somewhere else. To ensure you remain top of mind for customers, while being able to deliver those experiences, we will be building out our offerings and expanding our app ecosystem more than we ever have. This will unlock greater successes for law firms of all sizes and practice areas by creating more options, functionality and tailored workflows.’
So, this is a serious investment by serious venture capitalists in a serious company. What is particularly interesting is that the money is not going to a direct provider like Co-operative Legal Services, RocketLawyer or LegalZoom. The vehicle for transformation is once humble practice management software for which the plan is that it presumably develops as a platform in two senses – adding elements developed by Clio itself and plug ins from others (already possible). So, Clio will provide those offering legal services with the tools to streamline their operation; upgrade their clients’ experience; migrate much more to the web; sweep away opposition; and provide its subscribers with the means to deliver low cost services to clients unable or unwilling to pay current rates. This is a variant on the old saying: ‘Give someone a Fish, and You Feed Them for a Day. Teach someone To Fish, and You Feed them for a Lifetime.’ Clio is offering you a chance to fish for yourself in the wider pool available to those who can price their fees lower than at present.
The radical element of this development is that it does not challenge, by itself, the centrality of lawyers in legal services. Like the corralling of new initiatives in firm-based incubators, it provides a chance for traditional providers to retain their market share by co-opting innovation rather than being wiped out by it (which was the old Susskind thesis). And the result is that other practice management operations are going to have to step up to the plate (to use an American image) or they will, frankly, be toast (an image apparently originated in Europe). Traditional high street practices may well find that this is much more of a challenge to their high street operations than the ones they saw off in England and Wales in the form of attempted national web-oriented brands like Quality Solicitors or Co-operative Legal Services. And, were I in a practice orientated to low income clients, I would sit up and take notice of this development hailing from Canada’s far west. Its impact on service delivery could well be much more local than that.