The Future of Legaltech: Why Clio is Investing in Legal Technology Innovation – Shubham Datta – S5E8

00:01 Rob Hanna:

Welcome to the Legally Speaking Podcast. I’m your host Rob Hanna. This week I’m delighted to be joined by Shubham Datta. Shubham is the Vice President of Corporate Development at Clio, our sponsor, he brings to Clio years of M&A experience on both sides of the table as a strategic acquirer and sell side advisor with experiences in sourcing, deal execution and integration. Prior to Clio, he was a corporate development lead at Shopify, where he worked on acquisitions and investments. In his spare time, he is usually hosting and editing the Backbone Podcast cheering on the Toronto Raptors or thinking about what to eat next. So a very, very warm welcome to Shubham.

00:45 Shubham Datta:

Thanks so much for having me, Rob. It’s, it’s a pleasure and always good to chat on a podcast or chat with a fellow podcaster.

00:53 Rob Hanna:

Absolutely. And before we dive in all your amazing achievements and what you’ve done in your career to date, we do have a customary icebreaker question here on the legally speaking podcast, which is on a scale of one to 1010 being very real. What would you rate the hit TV series suits? In terms with reality?

01:14 Shubham Datta:

I’m going to go right down the middle. I feel like this is a controversial question. I’ve heard a few other guests on your podcast as well. So I’m going to go with a five, maybe a personal story about the podcast when I first started my career in Toronto at KPMG. They used to film a lot of the episodes in that very building. So believe it or not, I have met Harvey, and now the name escapes me but his associate, Mike Ross. Yes, yes, yes. So I’ve met both of them on the set, and I have pictures with them. So there’s my little suit story for you.

01:57 Rob Hanna:

Sure. Well, that is the first out of five seasons, 100 and whatever episodes we’ve done, somebody actually met the see. So what we’re going to try and do with this particular episode, then he’s trying to dig those photos out. And we’re going to share them with all the media’s and graphics for your for your episodes. That’s super cool. But thanks so much for sharing that story. So let’s start at the beginning, though, tell our listeners a bit about your family background and upbringing.

02:21 Shubham Datta:

Sure. So I was born in India, and my family had moved to Canada when I was six years old. So they move to Toronto, and Toronto has been home ever since. I’ve grown up in Toronto, went away to university or college depending on where your audiences are and what the Moniker is. But I went away to the University of Waterloo to study mathematics, accounting and finance. And then came back to Toronto when all was said and done to begin working and haven’t looked back. So Toronto is home.

03:03 Rob Hanna:

Good stuff, a place I’ve yet to visit, but a very much on the to do list once we’re in a normal world once again, so I’ll have to come out and visit.

03:12 Shubham Datta:

Yeah, you will. Toronto is a great city and would love to host you when you’re out here.

03:16 Rob Hanna:

Sounds good. Sounds good. So prior to Clio you worked in the corporate development at, I think Shopified. Tell us a bit about this role and what experiences it actually provided you with?

03:30 Shubham Datta:

Sure. So corporate development teams in general, in any organization tend to be quite small, relative to the overall team. So when I was at Shopify, I started when the company was about 2000 people. But the corporate development team was two people, myself and my boss. And so in that role, our objective or the reason for the corporate development team to exist, is to think about how to grow the company’s team and the company’s products and innovations through acquisitions. And that’s what we first started with. And in my time at Shopify, we also added investments to our portfolio or toolbelt, if you will. And so we would help Shopify or the company more broadly, executing M&A transactions. So acquisitions mostly, as well as investment opportunities, and in my time there, I worked on for acquisitions, as well as for investment opportunities as well obviously looked at a lot of more opportunities. You don’t always execute the ones that you look at. But that that’s what I got to work on while I was at Shopify.

04:53 Rob Hanna:

Great stuff. Yeah, it sounds fascinating. And I guess following that, then why did you decide to make the transition and join Clio I believe in late 2020.

05:03 Shubham Datta:

That’s right, I joined Clio in late 2020, October of 2020. So just coming up on just over a year. And when I was first looking at the opportunity, I guess I should, someone had reached out from Clio, and said, Hey, we’re thinking about, you know, starting a corporate development function. And at that time, I had said, I don’t really have any, you know, reason to leave, and kind of happy where I am. But they said, Well, why don’t you just, you know, no harm, no foul conversation with Jack, who is our CEO at Clio said, Okay, CEO, and founder, and I said, Okay, I’ll chat with Jack, no harm, no foul. And once I had the opportunity to chat with Jack, I really got to understand what Cleo is about, and the very real impact that it was having on the world and society at large, you know, you can join many software companies, but joining an organization that’s very mission aligned. And mission driven, was something that I really loved about working at Shopify. And I saw the same at Clio. And so you know, to fast forward, our mission at Clio is to transform the legal experience for all and when I heard Jack talking about that, it really resonated with me, in really impacting society at large, you know, the legal system is the fabric of our society. I mean, I don’t have to tell your audience or your listeners this, feel like I’m preaching to the choir, but the ability to impact that with software, and the ability to improve the lives of legal professionals and get out of their way so that they can truly practice law, and not have to worry about all of the other things that can just be taken care of. With technology. That’s something that really resonated with me. And you know, I’m not a lawyer, but I know how hard it is to be a lawyer. And so if I can take my skill sets and and make the job of legal professionals easier. That’s something that really resonated with me.

07:22 Rob Hanna:

Yeah, no, absolutely. And I think that makes a lot of sense. But let’s dive a little bit deeper than so. For those perhaps less familiar with Clio, what is Clio specifically, and tell us about some of their products.

07:36 Shubham Datta:

Of course, so, Clio is a legal software provider. We have many products today, our flagship product is Clio, manage Clio manage is a legal practice management solution that helps you run your law firm. With software, it’s cloud based, and allows law firms and legal professionals to be client centric. And what that means is, the practice of law is as challenging as it is, you know, you’re dealing with clients, you are dealing with cases and matters. And you’ve got maybe court dates to go to and all of the things in between. And what Clio manage really does is takes care of all of the maybe administrative or practice management aspects of running a law firm, so you don’t have to so you can focus on the client experience, and you can focus on the practice of law. And so it has a kleos software has case management, matter management, time tracking, billing, invoicing, and payments. And so you can run your entire law firm on Clio manage, we also have other products such as Clio grow, which works seamlessly with a manage, that allows you to grow your law practice with tools like CRM, and contact management, and intake. In fact, you could do intake with if you so chose, chose to have billing directly embedded. So for your initial consultation, if you wanted to charge your client, you can do that. And it all works seamlessly between Clio grow, and Clio manage. And so we’ve got a portfolio of products that are deeply embedded into manage we think of manage as the operating system of legal and we believe that we are building the first operating system for legal in the world. And that’s something that again, going back to your question around. what excited me to join Cleo? I do believe that legal is, as I said, the fabric of our society. The legal system is and every system needs an operating system as well. And so that’s what we’re focused on building at Clio.

10:09 Rob Hanna:

Yeah. And that’s, that is super, super exciting. That’s, that’s for sure. And, you know, there are so many things that clear provides that it’s just helping, you know, lawyers, current practicing lawyers, the future generation of lawyers, and of course, enabling them to be even more client centric. So absolutely love that. Tell us a bit more about kleos New Project Clio ventures.

10:30 Shubham Datta:

Here, do Ventures is a project that I’m super excited about and Cleo ventures, so maybe to, you know, give some background of where Cleo ventures came to be. Every year, as you as you know, Rob, we host a annual cloud conference. And this conference, one of the highlights, for me has been the Launch Code competition. The Launch Code competition provides new integrations to Clio, an opportunity to showcase those innovative new solutions that are being built on top of the Clio platform. Ever since Clio started, we’ve had world class API’s that allow integrations to seamlessly work with Clio. Because at its core, we know that in order to transform the legal experience for all, there are millions of permutations and combinations of how that legal experience is delivered. It depends on the stakeholders that you are interacting with, it depends on the jurisdiction that you practice. It also depends on the practice area of law that you are practicing. And so it’s not possible for Clio to build for all of these permutations and combinations. But what we hope to do is we want to make the important, really easy, and the rest possible. And so this is what the intention of our API’s have been from the beginning. And when there are tremendous amounts of innovation that are happening on top being built on top of Clio, we feature these companies in our annual Launch Code comp competition. And the winners each year, take home $100,000 us in a grant to help them grow that company to the next level. And so, as you know, we just finished off the fourth year of the Launch Code competition. And in that, so each year, there are five finalists. And so, you know, throughout the years, there have been 20 companies that have gone through this Launch Code program. And there have been four winners as well. And so as some of these companies that were part of the cohort, or part of the finalists, in the earlier years have grown their companies, we have seen a tremendous amount of innovation happening right on top of the Clio ecosystem. Some of them have gone on to attract, you know, outside capital through venture capital investments, others have gone on to build exceptional businesses in their own right. And the launch of Clio ventures was to participate alongside these amazing companies and innovations that were continuing to grow past LaunchCode and allowed us Clio to make direct equity investments as they continue to grow as well. And, and so that’s what Clio Ventures is really about. And it’s a program that we’re super excited by.

13:48 Rob Hanna:

Yeah, and I’m super excited about it as well and can’t wait to see where it will go. And I guess on that, you know, you’ve touched on sort of what you hope for it to achieve. But where do you see Clio ventures going in the future? So, I know it’s all still relatively, relatively new.

14:03 Shubham Datta:

Yes, it is very new. And I think, you know, where we would want it to go is to one of our key focus areas for Clio Ventures is to fund opportunities and companies that are led by diverse teams and founders. One of the things that we are thinking about is, in order for legal tech to innovate, we actually need more voices at the table than few. And so if we can take a highly opinionated view on funding diverse and underrepresented founders, as part of that journey, we think that’ll actually lead to more innovation in the category, which will be a win for everybody. So that’s one of the things that we’re focusing on, as well. Like I mentioned, our approach with Clio Ventures is to find fund innovative solutions in legal tech. And we believe that maybe we’re biased. We believe that that’s always happening in the Clio ecosystem. However, if there are innovations that are happening outside of the Clio ecosystem, I mean, there’s no better way to reach small and medium sized law firms. Then Clio, on Clio, we have over 150,000 legal professionals that use it worldwide. And so, you could imagine if you are creating a solution that helps law firms, there’s no better place than to have that innovation live, then on Clio, where you can get access to 150,000 legal professionals who are using the, the product. And so we’re really excited about growing the category as a whole. And this past year, earlier this year, Cleo became a unicorn company. When we raised our series, he led by T Rowe Price and Omers, growth, capital. And we believe that there are many other legal tech unicorns to be made. And we believe that we can have a hand in in the next group of those and so that’s, that’s where we think Clio ventures could go.

16:29 Rob Hanna:

And that is super exciting. And you know, the fact that you know, Clio is, as you might mention their unicorn, the future is bright, I love what the platform provides and help so many, so many people within the legal industry, and you touched on it, but what types of organizations are you looking to invest in? And what stage should they be at?

16:50 Shubham Datta:

Yeah, I think for now, we are targeting companies and startups that are I would say, seed stage or series A stage companies, we’re looking mostly at a SaaS solution. So, software as a service type of companies, and those that are either seed or Series A, as a strategic, corporate venture arm, we currently we are not leading rounds. And so we are looking at folks much smarter than we are when it comes to venture capital to lead and price these rounds. And we are happy to follow along with those with those investors to be part of the cap table. But some of the values that are the things that Clio hopes to bring outside of just the Capitol are things like access to our ecosystem access to folks within our company, such as product and engineering folks that have, you know, building Clio has been here, 13 and 1413, going on 14-year journey. And throughout that time, we’ve learned a lot about the legal market, and what it means to build a solution that is used by 150,000 legal professionals. So, we’ve got some insights there that we can share what it means to, you know, market or sell to law firms. We’ve understood what that means. And we’re how we hope to share those insights with our portfolio companies. We have a lawyer in residence, whom I believe you might be chatting with as well. Joshua Lennon, and you know, not every single legal tech startup has access to a lawyer in residence. And so. having access to Joshua and being able to speak to him on, hey, would this really impact legal professionals? How could they use this or just bouncing off feedback that way? And then being part of Clio ventures. As I mentioned, we have an API, but that API is ever evolving. And so, it becomes a two-way street with the portfolio company or the startup to say, we want to do X, Y and Z things. But the API today doesn’t necessarily allow that. Can we work together on make making that better? And so, these are the kinds of things that we’re hoping to bring about as a strategic or a corporate venture program. Outside of just the capital, so value outside of the capital.

19:39 Rob Hanna:

Yeah, no, thank you for giving us such a comprehensive overview there. I think it’s super exciting. I can’t wait to see the future of clearer and clearer ventures and all the other sort of products and services but you also sort of switching lanes. You also have your own podcast, as I mentioned in the introduction, The Backbone podcast so a journey inside finance as a startup, tell our listeners a bit more about it. And what made you start the world of podcasting?

20:07 Shubham Datta:

Sounds good. So, the backbone, as you mentioned, is a look inside the journey of finance within a startup. And what it aims to do is interview finance leaders at high growth technology companies, and talk about the opportunities and unique challenges that finance professionals face in that seat. So, think about a CFO or a VP, finance, or director of finance, the challenges and opportunities that they face in a high growth technology company. And over the years, I’ve had the opportunity to interview many distinguished guests. And it’s been an incredible experience to learn from finance operators, and see how they run in finance and operations at high growth technology companies. So that’s, that’s the backbone podcast.

21:06 Rob Hanna:

There we go. And I’d strongly encourage people to check it out. And before we wrap up Shubham, you know, do you think that future lawyers will need to be legal techies?

21:18 Shubham Datta:

I, that’s a great question. I don’t think they themselves need to be legal techies. I think if technology does its job correctly, then they shouldn’t even realize that it’s using technology, they should just have an experience that is so much better. That they don’t, they won’t know it’s technology power, the best technology just blends in. And I think legal tech should be that way as well. There are many solutions that are like that, where they just blend in and they just work. And I think legal Tech has a tremendous amount of opportunity to do that and be that for legal professionals everywhere. And so to answer your question, I don’t think they themselves, lawyers, attorneys, and legal professionals need to be legal techie themselves. But it’s our job as technologists, as builders of technology companies to make legal technology so easy, that it doesn’t feel like we are a bet to legal professionals that they are adopting technology is just a better way. And I think if we can achieve that, then it’ll be it’ll be a win win for everyone involved.

22:36 Rob Hanna:

Yeah, no, absolutely. I couldn’t agree more. And I’m looking forward to seeing how that transition evolves over time. And finally, what are you expecting to see in terms of legal trends for 2022? And do you expect to see a continuation of sort of technological adaptation by the legal sector?

22:55 Shubham Datta:

Yeah, I think first and foremost, we’ve seen tremendous amounts of legal tech adoption throughout the past couple of years. And I think that that will only continue, as firms look to become more cloud based and client centered, they are looking at solutions that are not tethering them back to their bricks and mortar law office. Um, you know, when the pandemic hit, folks had no choice but to either work from home or work from an area where they didn’t have access to their office, and so that tethering back to the office, it kind of got, that cord got pulled. And I think, you know, every legal professional that have gotten used to now over the past 18 to going on 24 months of having to not rely on those kinds of solutions, then that’s encouraged everybody to adopt technology. Firstly, out of necessity, but I think now as they’ve gotten to use them, they’ve realized the benefits that these technologies do bring. And I don’t think there’s any going back to the way it was. And so, I think it will only continue to increase the adoption of legal technologies. But it’s the job of founders and startups of legal tech, to build technologies that are innovating on the workflows that already exist. It’s much harder for someone to say, here is a new workflow and I want you to fully adapt or change your existing workflows to accommodate my startup or my company. But if you can work within the existing workflows and make those workflows better for legal professionals, and just make the technology work without having to jump through hoops, I think that will be a big win for not only the legal tech startups, but also legal tech professionals that will be able to adopt those technologies and really make their practice more client centric. And I think that’s what folks are really looking for. The legal consumer is a consumer in all other aspects as well, they you know, they they’re watching movies and videos on Netflix, they are maybe ordering or hailing their cab on Uber and the expectations of legal consumers have just gone up. And it’s no longer okay for legal professionals to leave their experience behind. And so couldn’t legal consumers are expecting those types of behaviors when they go to look at legal when they look to have legal help or legal services. And so, the consumer expectation has increased. And our job as technologists is to help legal professionals meet that bar and help them become more client centric, and provide them with the tools and technologies to do that, such as when you know, there’s an appointment coming up, you can send a text notification automatically, you don’t have to remember as a legal professional that, hey, I have an appointment coming up with with John Doe, and I need to send them text notification software, like Clio can automatically take care of that in the background. And what we found is that has increased or decreased rather no shows, which is really important to make sure that you can make the most of the limited time that you have. So I think overall, we will continue to see more adoption of legal technologies. But it comes back to working with legal professionals versus against them, and providing them solutions that truly allow them to do their work and just get out of their way.

27:13 Rob Hanna:

Yeah, no, I love that. And I use the analogy collaborate versus combat. You know, particularly with some legal professionals, I’ve been super excited to see the what the future in terms of legal technology and further adoption that that happens over the line. So, if people want to follow or get in touch with you about anything we’ve discussed today, Shubham what’s the best way for them to do that? Feel free to shout out any website links or relevant social media will also share them with this episode for you to

27:40 Shubham Datta:

Yeah, the best place to find out anything about Clio is obviously our website www.koco.com. If you want to find out anything specifically about ventures, that’s just cleo.com forward slash ventures. And that has all of the details that we chatted about today as it relates to Clio ventures and the program. And if there’s anyone listening that’s building innovative technologies for legal tech would love to hear from you. So, give us a shout.

28:11 Rob Hanna:

Yeah, no, thank you so, so much about it an absolute pleasure having you on the show, wishing you all at Clio lots of continued success, but from all of us on the legally Speaking Podcast over and out.

28:23 Shubham Datta:

Awesome. Thanks so much, Rob, for having me. It’s been a pleasure.