Jack Newton describes himself and Rian Gauvreau, co-founders of the legal-tech firm Clio, as “two hammers looking for nail.”
That was back in 2008, after the emergence of the cloud signalled a whole new wave of disruption in software. Newton and Gauvreau, who are software developers, had been looking for business niches to fill.
They settled on law firms and founded Themis Solutions Inc., which does business as Clio. Specifically, they focused on practice and customer relationship management software for solo lawyers and small law firms – ones that lack the resources enjoyed by large law firms for managing all the non-legal administrative tasks of the legal profession, like client intake, contact management, calendaring, document management, timekeeping, billing and trust accounting.
“They don’t have the human infrastructure supporting them that a lawyer in a large firm does,” Newton explained.
What they ended up building was the equivalent of Salesforce (NYSE:CRM) for lawyers – a cloud-based platform that automates and simplifies much of the non-legal work conducted by paralegals, secretaries, bookkeepers and lawyers.
Neither Newton nor Gauvreau have legal backgrounds, although Gauvreau ran the IT department of Gowling WLG, where he identified potential opportunities for software. Through the Law Society of British Columbia, they learned that most of the lawyers the society deals with are solo and belong to small firms.
While there are other enterprise software programs available for small business, like Salesforce, Newton and Gauvreau saw there was a need for something tailored to the legal profession, and especially the small law firm market.
“Law firms do have very specific needs,” Newton said. “They’ve got very rigorous standards when it comes to compliance and security and handling customer data. And also, I believe that lawyers have a very strong preference for solutions that are designed specifically for lawyers.
“There’s a lot of lawyers that work really long hours, and part of that is because they’ve got really poor systems in place, and Clio can help give them some of that time back. It simply helps law firms run the business aspect of running a law firm and handles everything related to interacting with your client as well.”
Clio’s clients now range from single lawyers to firms with as many as 100 lawyers.
“Our core market is still made up of mostly solos and small firms, just because that’s what the demographics of the space are overall,” Newton said.
Momentum Business Law in Ottawa is a typical client. It has 18 employees, and has been using Clio since 2012. Founder Megan Cornell worked for a big law firm for 10 years before starting her own small firm. She has been using Clio since the beginning and likes the fact that it is cloud-based and integrates with other software, like Microsoft Office.
“It’s really a collaboration tool, so it’s meant to be able to share within your firm really well,” Cornell said.
It dramatically cuts down the time and money that she would otherwise have to spend on billing and scheduling, she said.
“At my old firm, billing took the first three weeks of every month,” she said. “It was just a total nightmare, and it would take up a huge portion of our staff time. Now, for us, it’s just seamless. Booking appointments would be another example that can take up a lot of human time.”
The fact that laws and court systems differ from one country to another is not an issue for how Clio operates.
“Because we focus on the business aspect of running a law firm, not on actual law itself, we don’t need to worry about any of those specific changes in the actual law,” Newton said.
Clio operates on a subscription basis, with costs ranging from US$39 to US$99 per month. It automates many of the tasks that would otherwise have to be performed by a secretary, bookkeeper or lawyer, which reduces administrative costs.
For example, a scheduling tool allows potential new clients to easily schedule an initial consultation over a secure Zoom call – something that more people are now comfortable with, thanks to the COVID-19 pandemic.
The Clio for Clients app allows clients to receive secure messages from a lawyer on their app, review and fill out documents and pay bills on their smartphones. It also offers search engine optimization, making it easier for people to find them online.
“The Clio-using lawyer stands out because they’re using our Clio Grow product that ensures that they’ve got a great Google My Business listing,” Newton said, adding that customers are encouraged to provide reviews. “So we optimize their online footprint.”
In some cases, using Clio allows law firms to get recurring revenue from clients, Newton said. He cited wills as an example.
Typically, a person hiring a lawyer to make up a will would pay a one-time fee of anywhere from $300 to $1,000. Using Clio, lawyers can offer a will service that is updated annually for a small annual fee, making it more affordable for some people.
“All of a sudden, a $100-a-year subscription or a $50-a-year subscription is something that is way more accessible to the average consumer, as opposed to $1,000 up front,” Newton said.
Newton confesses that he and Gauvreau never imagined that the company they built would become as big as it has.
“We thought, initially, this would be a cute little niche to build a lifestyle business in, and we wondered how big the solo/small firm lawyer market could be,” Newton said. “And it turns out it’s enormous. Eighty per cent of lawyers practise in firms of 10 lawyers or less, and a full half of all lawyers practice as solos.”
Clio is now officially B.C.’s newest unicorn company. Following a recent US$110 million Series E financing, it is now valued at US$1.6 billion and has 150,000 users in more than 130 countries. •