Max, thank you so much for joining us here at the end. We saved the best for last.
We're so excited. This is great.
I happen to know that you have some fans in the audience, at least as far as legal tech is concerned. So you will have both users, potential customers. So you didn't expect that.
Amazing. I'll be on my best behavior.
They also all happen to be on my team, the legal team. But we're here to really talk about the success story of Legora, and we've got a ton of go-to-market professionals in the audience. So I want to start first by setting the stage, quite literally, with the story of Legora, because I think a lot of those in the audience, the lawyers, will be familiar with the product, but they won't be familiar with necessarily the full story of Legora. And first, I have to say thank you on behalf of the lawyers, because I feel like we've been left behind for so long, and now we've had wonderful technologists like yourself come along and bring us into the future. But tell me, you have a background in both economics and computer science.
And you could have gone into a lot of different spaces. So it's not like you came out. Sometimes people start a company because they're solving their own problem. That was not you. So why did you pick law?
Yeah. Thank you so much, Erica. I was one of these kids who absolutely couldn't pick what they wanted to do in college and in work. So I decided to go to two colleges so I could do both computer science and business. And coming out of that, we had the GPT-3.5 moment or ChatGPT moment. And I sort of looked at that and went, wow, this feels like my generation's internet moment in many ways. And we started going down the list of, you know, which industries will be significantly transformed, and coding came first to mind. But then I thought, wow, coding is probably going to be really competitive. There's a lot of really smart people who are going to go build for this because engineers, to your point, want to build for engineers. And it's one of the reasons why we've had so much delightful software produced for ourselves over the years. But legal, in many ways, have sort of been left behind, and we started exploring, you know, how can we put GPT-3.5 into the hands of lawyers and actually make it productive. Now, in the beginning, there were so many foundational problems with that technology. It would hallucinate. It couldn't work with large context windows, and we wasn't even sure if the data was being trained on by the big model labs. So the first year all went to these like foundational problems that today are solved out of the box, right? And our job has sort of been let's stay two, three standard deviations ahead of the model providers and build all of the scaffolding, all of the infrastructure, and all of the platform and software around those models themselves. And it was really hard because I started this company in Sweden, a smaller legal market than today our biggest customer. And so one thing we had to learn was, you know, internationalize really, really quickly. And because we started the company during summer, there was nobody around. Everybody was in their vacation homes in the archipelago, and I was like looking for our first customer and three engineers and no lawyers were not great for our brand. So I thought I have to go and get the biggest, the baddest law firm to sort of associate with our brand.
And one of our early angel investors introduced me to the managing partner of the biggest law firm in the Nordics. But with a small caveat, breaking into his calendar was going to be harder than breaking into Fort Knox. But I am relentless, and nagging is an underappreciated form of negotiation, my father once taught me. So I kept nagging. I kept nagging, right? Kept nagging, kept nagging, kept nagging, kept getting a no. But then I thought, what if I send him an email and say, 'If you don't have time to meet me today, I'm going to see your second and third biggest competitor.' And whoops, there was a slot in the calendar. So I went to their office, and it was so nice, and I realized, 'Wow, we picked a really great customer group because they're going to be able to pay for our software.' And you walk through these big doors, you sit down, I had 30 minutes, and I realized now I really need to turn on the confidence level. And that's not something that Swedes are typically good at. You know, whenever we come to the US, we have to learn to oversell a little bit. But I sat down, we were three people in the company at the time. This was pre-vibe coding, so we barely had a working prototype. I sat down and I said, 'John, you've got an amazing office. It reminds me a lot of McKinsey.' And then he went, 'Oh, have you been at McKinsey?' And I said, 'For a while.' I had done an eight-week internship two years earlier, but he didn't have to know that. And you know, we sat down in the meeting and I said, 'John, respectfully, you don't know that much about AI, and I don't know that much about law. So I think together we're going to make a great pair.' And by the end of it, we shook hands, and we actually moved into the firm. So by combining and working with our customers, that was sort of how we figured out what the problems were that we wanted to go after.
That's awesome. And you moved into the firm. Say maybe just a little bit more detail, what room specifically did you move into in the firm?
So we got this conference room, and I thought it was really nice of them, actually, because we couldn't afford an office space. Our initial angel round was $50,000. That was enough to buy a couple of nice screens and noodles, and we managed to get a room which unfortunately didn't have any windows, but it was really close to the Coca-Cola fridge, which was awesome for productivity. And the AC would turn off at about 5:00 p.m., and we would stay to midnight. So there was a daily ritual of somebody in the team standing up, going to the door, and starting to wave it to get more oxygen into the room. And we sort of became known as like the AI guys in the firm because what the partners would do is the partners would bring their clients by our room, and then the clients would look, 'What's going on in here? There's like four or five guys with big screens in one of the conference rooms.' And they go, 'Yeah, yeah, yeah, don't worry about those guys. It's just the AI team.' And you know, we'd look like little goblins, like, you know, hunched over on our screens. But that became the first press release that we got, which in a Swedish business newspaper said, 'Young AI company modernizes big law firm,' or something like this. And what's so interesting about law firms in particular is that it's a real herd mentality and the sort of real FOMO, because if you're competing on quality and speed of your work, if your competitors have a tool that you don't have, you better get that tool really quickly. So after that announcement, we got 150 demos immediately.
And my calendar just filled up, and I started doing back-to-back demos for well, basically an entire quarter.
You were a marketer before you realized it, and we're going to get to that because that's like some pretty thoughtful marketing, and I think maybe you didn't even realize that you were doing it at the moment.
Yeah. It's like the winner gets to write the history, right?
Yeah. Yeah. But I love that, and you moved in for months.
Yes. So, you know, I think slowly the clients sort of understood, wait, we don't just have these like guys in a sweatshop in the back. Like, they're actually going to add value. And the really hard thing was like when we had to take meetings with other law firms, I couldn't go, 'Oh, let's meet at this, you know, let's meet at our office.' So I was always like, 'Oh, you know, the office is too busy. Let's meet at a coffee shop.' And I thought that was...
And that is like the best example of literally sitting with your customer and solving the problem. And so talk a little bit here. We have customers of our products. You all are a customer of our marketing products. We have partners in the audience, and everyone is having this whiplash moment with AI where, you know, one week we all download the latest thing and we learn a few tricks and we feel like we're on top of the world and we're at the front of the pack, and then the next week something happens that we didn't know about or we read about it and we're like, oh, we're behind. So how do you, how is that customer obsession approaching it with humility? You know, the customer is the expert in this, you're the expert technologist. How did you become a partner, not just a technology provider?
Well, I think first off, you got to realize that it's like very unprecedented times, and it is extremely tiring to keep up, but that's like part of the gig. And the way that we've sort of thought about it is it's our job to squeeze the most juice out of the available technology for our clients today and for the next six months and for the next 12 months. But if you're building for where the model capability is right now, then you're probably building for like three months ago because you got to look a little bit ahead. And it's been a real fine balance of, you know, do we build this thing that we kind of know that the models are going to consume in 12 months, but it will deliver a lot of value today? The answer is like yes. But I tell my engineering team, you know, we're not building this like skyscrapers. We're building sandcastles. And you know, the sandcastles will get wiped out every six months, and that's okay. But at the same time, you need to have these bets, right, that sort of last a little bit longer in time that you know will be foundational core pieces of your product, of your platform, and of your service going into the future. And it's been really important for us to bring our customers into that conversation and into that mix for many reasons. One, we want their opinions, but two, it's a really scary time for them, right? This is like existential. You know, really nailing the introduction of AI into a law firm or a legal function in an in-house department is the thing that you have to do right now for our customers, and allowing them the medium to be part of the solution, I think, is a lot more comfortable than us just coming and saying our way or the highway. And we have three values at Legora: LFG, let's go, but more importantly, G, grow together, right? And that's both growing together internally, but also growing together with our customers. And what we find is actually that some of our most successful customers are growing their teams, right? And I don't think that is the sort of headlines if you listen to these, you know, general AI leaders. It's like, oh, AI is coming for all white-collar jobs, and it's going to be so much disruption and da da da da. But what's happening in legal is it's a fundamentally supply-constrained market where attorneys were actually really smart. They said in order to practice law you need to get this very fancy piece of paper, and so they sort of capped the supply, really smart of them. And the demand is much, much larger, right? If you could review every document, if you could keep up with every new regulation, if you could look at every single deal in a private equity firm and run a legal due diligence before you take it to investment committee, like you would, like the ability for the market to absorb an increased supply in legal services is true.
And a lot of those new legal services are being delivered with the help of software, and I don't think that's only true in law. That's likely true in all of your markets as well. And I think having this expansive mindset also makes the transformation a lot more fun, and it actually makes it land inside organizations a lot better because if you go, 'All right, guys, time to cut, you know, 25% headcount because we've got this new AI tool,' like good luck, you know, getting the team and like getting the organization with you. I rather see it as a huge expansion of capability. And you know, we're not hiring fewer software engineers. We're hiring more software engineers. What you might say is you need different skills, right? You're not just hiring the person who knows how to review an NDA really well. You're hiring the person who's, you know, smart and sort of a go-getter who can design the upstream process where AI helps with that.
Yeah. And I love what you said about the optimism here, and I think it's really important to just dwell on for a minute because we're, you know, the news cycles are not always optimistic.
And you know, well, like if you listen to the news, we're all going to be dead in five years. Just go pina coladas.
And I think it's incredible what you've done in the segment that you're in because I think part, you know, you see these charts where you see coding as the first use case and you see legal right behind it. But I have a theory that part of the reason legal is right behind it as the opportunity is because the floor is so low. Like it's just like so much room for improvement, and go-to-market's probably somewhere in between. But we tend to look at these things like very binary, like, you know, this is the way that this is going to go, rather than actually what does this technology unlock for who can actually be a customer of this technology and who can access the services then that enable this technology. And I think that is just a very important mindset to keep on all of this.
Oh, 100%. And I think that we're also approaching a lot of these problems like how can we retrofit AI into what we're already doing, or how do we retrofit AI into our current process, rather than going, how do we completely redesign the process and like how should it look if we rebuilt it knowing what we know now. And this has been fun for us building a company in this AI age. We're about a thousand employees at Legora. We were 250 by the beginning of this year. And we're feeling the how do we build an AI-native marketing function? How do we build an AI-native finance function? And like everything is getting redesigned. And I think in those moments, like the things that I really look for in our people is curiosity, why slope, not how experienced they are, but actually how much sort of what is their ceiling and how quick are they ramping. And you're right in that legal particularly had a really low ceiling, really low floor. I mean, when we arrived in this market, I was just surprised that every single tool looked like it was built with Windows 95. Well, our original mission statement was build delightful software for the best legal professionals in the world, and delightful is like the important word there because the software was so undelightful. It was painful to use even, and so there's just so much greenfield opportunity in our space, which I'm very thankful for, and it sort of continuously increases our ambition level as well.
Yeah. And I want to talk to you about the ambition and the innovation. Two things. One, I feel that in my bones about the technology, and almost every lawyer starts in a law firm. And when I came in-house to a tech company, I had only worked with Microsoft tools, right? Word, Outlook. And I was stuck in that platform. I just didn't know otherwise. And I went to work for a tech company where I was working with engineers and product managers. And I remember doing a presentation, sharing my screen, and Outlook was on my screen as I plugged it in, and there was like a collective gasp in the room. They were like, 'What is she using? Why is she here?' So we've got a lot to come along. But yeah, you saw that opportunity, and you're humble. So I'm going to give you the opening directly here. Not only did you grow from a headcount perspective, but you started with how much revenue and went to how much revenue in what period of time?
Yeah. So we went into general availability in October of 2024. It again, it took us some time to like solve all of these foundational issues. And what was interesting for us was if a lawyer onboards onto Legora and they have a bad first experience, they're never opening the software again ever. Like you get one shot.
Very tough crowd. But what was interesting was sometimes the expectation was also here because, you know, some people almost wanted to prove that, ah, the AI cannot do the thing that I can do. And so a partner would go, 'Draft me a share purchase agreement,' like one of the most complex documents you can imagine, and then the AI would do like a fine job, but not an excellent job, and then go, 'Ha, I knew it couldn't do it.' Right now, I think the approach and the excitement is a little bit different. But going into GA in October of 2024, we were about $1 million of ARR, and we had basically stayed flat for about six months because we didn't want to onboard more clients onto a platform that we weren't confident in. And instead of saying, 'Oh, I can't, you know, you can't come on the platform because it sucks right now,' I would tell people, 'We have so much demand, and I am busy onboarding clients every single day until October. So you will just have to wait. But we can sign the contract now. You can break it until October. That's fine. But I can onboard you in October.' And people would go, 'Wow, this must be the best thing ever. If I have to get into a line that's three months long, it has to be really good on the other side.'
