Scaling a company can sometimes feel like a high-speed dash to the top, making it easy to prioritize activities that yield immediate growth. But it can also take time to educate the industries that a company is transforming with tech, and even more time to build trust with prospective customers. These were headwinds facing Clio, today’s leader in cloud-based legal software, when it introduced the first ever SaaS legal practice management software for attorneys.
When Clio launched in 2008, digital transformation was already driving an increasing number of industries towards cloud adoption. Yet in the legal industry, the question wasn’t which product to use. Instead, it was whether attorneys could be convinced that cloud-based applications were usable and secure enough to become part of their core operations. To foster acceptance around the concept of cloud-based legal software, the Clio team knew they had to plan for the long game by investing significant time into educating its market.
In this episode of Growth Journeys, Clio CEO and Founder Jack Newton joins TCV Principal and Clio board member Amol Helekar to discuss why Clio invested in educating an industry that is known for slow adoption as they climbed to the top and became the market leader for cloud-based legal technology.
Here’s what you’ll learn:
- Why Clio invested in actively educating its market, rather than waiting for the market to come to them
- How a strong partnership strategy can become an impenetrable moat
- Choosing a mission statement that can foster growth
- How to draw clients, employees, and investors into your mission
- Jack’s tips on fundraising later rounds
To learn more, settle back and press play.
Please find the transcript below, which has been edited for brevity and clarity.
Amol Helekar: Welcome to Growth Journeys, a podcast series from TCV focused on lessons from the field from entrepreneurs in TCV’s network. I’m Amol, a principal at TCV, and I’m here with Jack Newton, CEO and co-founder of Clio.
Jack has been instrumental in driving adoption for cloud-based technology in the legal industry. In 2008, he brought the first SaaS legal practice management application to market. Today, Clio is a market leader and the only end-to-end solution for law firms.
As an investor and advisor to early-stage startups, Jack is a nationally recognized speaker and author of the bestselling book: The Client Centered Law Firm. I’m really excited to chat with Jack about how to get a business off the ground in times of uncertainty, how to foster a strong community and how to galvanize the team around a joint mission. Thanks for joining me, Jack, and welcome to Growth Journeys.
Jack Newton: Thanks for having me, Amol, happy to be here.
Amol Helekar: Jack let’s rewind back to 2008. When you founded Clio, you were the first to market cloud-based legal practice management software at a time when businesses were really hunkering down. On top of this, you had a baby on the way, and were working with your co-founder, who is hundreds of miles away in Vancouver.
Talk about a challenge! Many would have shied away, and yet you saw an opportunity there. How did you do it and what kept you going?
Jack Newton: Yeah. Great question, Amol. And what we saw back in 2008 was obviously a really tough macro environment from a financial crisis perspective. Fundraising was extremely difficult, people were really hunkering down and battening down the hatches for the impact of the great recession.
But we also saw at this point in time, a unique opportunity to bring the cloud to legal. When Rian and I came up with the idea for Clio back in 2007, what we saw with the advent of the cloud was a really clear signal that this was a technology and an approach to delivering software that was going to transform virtually every industry in the world.
Amol Helekar: Yeah. And it’s been quite the journey ever since. You know, it’s one thing to identify a market opportunity, but it’s entirely different to convince skeptical customers that there’s a real need for your product. How did you win customers over?
Jack Newton: Yeah, I would say in the early days of launching Clio, we had some customers just rush to the product and give us feedback along the lines of: “I’ve been waiting for somebody to develop a solution like this for me. Thank you. I’m all in.” And they were our most enthusiastic early adopters and that was obviously a very low friction process.
But for a large majority of the early customers we started onboarding there was obvious advantages to the cloud from an affordability perspective, from a total cost of ownership perspective, from an ease-of-use perspective, all of those things were obvious advantages to the cloud. But what was less clear back in 2008, 2009, was whether it was ethically acceptable for lawyers to put their practice in the cloud and to put really sensitive client data in the cloud. They have a very high bar with regard to privacy and security that they need to meet when they adopt and deploy IT infrastructure into their practice.
What we realized pretty early on in that growth journey was we’re going to need to get ahead of that conversation. We’re actually going to need to lead that conversation and educate the space around the security and ethics of cloud computing as it relates to legal professionals. And that was a big lift. We put a lot of energy into thought leadership, into speaking on this across the country, putting on seminars and writing white papers and even advocating at the bar association level for ethics rulings relating to cloud computing. And in the end, we ended up being successful in educating the market on cloud computing and really helping drive cloud adoption in legal, which is traditionally a pretty slow adopter of new technology.
Amol Helekar: Yeah. And I know it takes a lot of effort to build that type of trust amongst your customer base. And you know, something that a lot of people talk about is building a community. How do you go about doing that? What are the steps and how do you maintain momentum?
Jack Newton: Yeah, it’s a great question. And I think when you’re really trying to transform an industry and how it operates, what we realized pretty early on in Clio’s growth journey is that the product isn’t enough. Just having great technology is part of the solution, but it’s not enough to actually drive that true transformation in how an industry operates.
What we realized was we needed to spark a revolution in legal and a revolution in how lawyers thought about delivering legal services to their clients and how they embraced technology as a really foundational and integral part of the value they’re delivering to their clients.
And we’ve spent a decade building this movement around digital transformation in legal, and also around this concept of a client-centered law firm that is thinking about the way they deliver legal services in a completely different way.
This is something we also realize is bigger than any one company can do. We’ve built a huge integration network with over 200 integration partners that have built on top of the Clio platform. We’ve locked arms with bar associations from around the world to help bring the message around digital transformation and client-centered lawyering to lawyers as well.
Amol Helekar: A decade is a long time to build that type of community, but you guys have put a lot into it. Along the way, how did you know you were on the right track?
Jack Newton: I think one of the really early signals is that you’re seeing the snowball effect build from year to year. And I think one of the really important messages for our listeners today is that this doesn’t happen overnight. When you’re making the kinds of investments that we have been at Clio on thought leadership, on building this community, on building customers that will shout from the rooftops about your product, but also help enroll additional customers in the movement that you’re helping drive.
Partnerships are another example that take years to forge. But once you have those relationships built, you’re building a really defensible moat around your business.
Whether it’s through social channels, or other forms of engagement, you’re seeing evidence that the number of people that are enrolled in the movement and the community you’re trying to create is growing over time. And importantly, you’ve got a high net promoter score and they’re pulling more of their colleagues into the fold.
Amol Helekar: Yeah, that’s fascinating. I know one of the aspects of the community is the Clio Cloud conference, which is now the largest legal tech gathering in North America. What is the event all about and what made you invest the time and money to build it to where it is today?
Jack Newton: Yeah, it’s another great example of one of these investments that takes time to build. It’s the largest legal technology conference in North America. And it’s something we’ve put a huge amount of energy in over the last nine years to make successful.
And if we rewind all the way to the very first year we did the Clio Cloud Conference, it was very humble. It was just over 200 attendees and a very modest venue in Chicago, Illinois. We had 4,000 attendees at our virtual edition of the Clio Cloud Conference last year. We had over 2,500 attendees at the in-person Clio Cloud Conference in San Diego the year before that. And it’s an event that is just so energizing for both our attendees and our employees that attend this conference and just get so energized and excited by the opportunity to connect with both our customers and the prospects that attend this conference.
The way we frame this conference with attendees is really this conference is not about Clio. This conference is about innovation and thinking about what the next 10 years of innovation in legal will look like. It’s really a gathering of the best and brightest minds in legal coming together and what’s amazing for Clio is we’ve become an intrinsic part of that discussion. The conference is continuing to build year over year, and I can’t wait to get back to an in-person conference next year for our 10th year anniversary.
Amol Helekar: Yeah. Having attended the Clio Cloud Conference for the past few years now, I can attest to how inspiring it is for customers, employees, and investors too. Everything we’ve talked about is about community building, but it’s also part of your mission to transform the legal experience for all. What does that mission mean to you?
Jack Newton: The mission is really an important part of everything we do at Clio and it’s really become a north star for our company, our employees and our customers attached to our mission. That mission, which is to transform the legal experience for all, is number one, big and audacious.
At the heart of this is a massive access to justice gap. And one of the statistics that I was blown away by the first time I heard it, is that 77% of consumers that had a legal issue, did not see that legal issue resolved by a lawyer. And I describe this as the latent legal market. This is a vast market that is not currently being served by how legal services are delivered today. What I see as the opportunity is to better connect the millions of consumers that have legal issues with lawyers that can help them solve those legal issues.
Jack Newton: But to do that, we both need to create more efficiency and ease around accessing legal services in the first place. Most consumers are scared off by how lawyers price their services. They’re scared off by the idea of paying 400 plus dollars an hour to arrive at a solution to their legal problem. We believe what Clio, in particular, and what technology in general will enable law firms to do is to deliver their services in a much more efficient way. In a way that is more affordable and accessible by the average consumer, that automates big parts of what is done manually today.
And importantly is delivered over the internet. What we’ve seen over the course of Clio’s 10-plus years of growth is a very steady march away from on-premise law systems and bricks and mortar law firms toward a new cloud-based era where lawyers are delivering their legal services online and they’re delivering them in a client-centered way.
Ultimately, we believe being a cloud based and client centered law firm is what is going to unlock our ability to achieve this audacious mission to transform the legal experience for all.
It’s something that inspires not just “Clions,” which is our nickname for our employees, but also inspires our customers and inspires our broader integration partners. Because everyone understands that this mission is so deeply important and something that is going to be good for the public.
But it’s also, if we execute on this well, going to help make lawyers more successful. It’s going to help make lawyers feel like they’re truly bridging that access to justice gap that frustrates so many lawyers today.
It’s a big audacious mission. It’s exciting. It’s so multifaceted in terms of how we’re realizing it. But it is something that inspires our team on a daily basis.
Amol Helekar: Absolutely. And you know, some companies simply put a mission statement on their website, but Clio is really embracing yours. So how did you put that mission into practice across your business?
Jack Newton: I think when you arrive at a mission that is truly resonant with your team and you see the impact and inspiration it can drive in your team, you need to make it a part of your daily discourse. And that’s exactly what we’ve done at Clio.
We’re making decisions around how much this helps accelerate our ability to achieve our mission.
I believe that there’s also a huge role in the importance of the mission as it relates to recruiting. There’s an increasingly large percentage of the talent that’s out there today that is not just looking for pay and benefits as the important factors they’re looking at in the company they choose to work for.
We’re able to recruit the best talent on the planet in large part, thanks to a mission that is powerful and resonant. I really can’t understate how important that is to the overall success of a company, especially when you’re thinking in the long-term and thinking about building a multi-decade company.
Amol Helekar: I can tell you’re really passionate about it and how important it is to Clio’s success. You know, some people feel there’s a tradeoff between tackling the mission or driving growth. You’ve seen both tremendous growth and progress against achieving your mission. What’s your secret to achieving that?
Jack Newton: So, yeah, Amol completely agree. I think we’ve been really successful in pursuing both a mission that resonates and driving extraordinary growth and, and rather than being at odds with each other, I think in a lot of ways we’ve actually seen these be in service of one another. What we really talk about is, is our growth is what enables us to have broader impact and to achieve our mission.
The energy needs to go into finding how you can actually build, a bit of a flywheel where the progress you’re seeing on your mission and the team, and customers, and the broader movement that is helping attach to your mission is actually helping drive your overall flywheel of growth.
Amol Helekar: It’s something that Clio has put a lot of effort into and has been able to execute against. You know, over the years you’ve grown tremendously and successfully raised your series D and E rounds. Any advice you’d give to entrepreneurs who are fundraising?
Jack Newton: Yeah, absolutely Amol. One thing is you need to be executing really well and have a long-term vision that you’re talking about with investors and hopefully inspiring them in a way that they want to be part of that story and part of that mission and want to be partners with you in realizing that mission.
If you look at how lawyers practice today in the year 2021. In a lot of ways, it’s not that different from how they were practicing in the year, 1981. And when you’re looking at that scale of transformation, that scale of opportunity, it can be just such a gigantic opportunity that is hard for investors not to get excited about the opportunity.
The second piece, I think that is really exciting about the Clio opportunity in particular, but in general, something entrepreneurs can think about when they’re fundraising is, are you driving the kind of transformation in your industry that will actually expand the TAM of your customers? As a first step, can you expand the TAM of what your customers are able to address?
And with Clio, if we’re successful in our mission, we’re going to allow our customers to address that latent legal market which will vastly expand the TAM of the legal industry. Which in turn will expand our TAM as well. So that’s been one part of our story that I think is, is really powerful and exciting.
But Amol maybe you’re best positioned to comment on, on what attracted you to Clio in particular and what attracts you to companies in general. What advice do you have for other mission-driven founders and entrepreneurs?
Amol Helekar: I think to your point, investors are really recognizing how important it is for companies to have a strong vision and a culture that supports their growth agenda. So being mission-driven is not only great for the broader community. It also leads to stronger company culture, a deeper focus on the product and the customer experience and brand.
And ultimately this is in service of the company’s growth over time and can differentiate it in the market as it has for Clio. My advice to other entrepreneurs is to lean into their company’s mission statement and really incorporate that statement into the company’s products and growth strategies and to consider it central to their culture, rather than at odds with the growth agenda.
Jack Newton: I love that.
Amol Helekar: Jack, thank you. This has been an incredibly educational and inspiring discussion. It was great to have you on Growth Journeys today. And thanks to all of you out there for listening.
Jack Newton: Thanks for having me, Amol. It was a great conversation.