Legal Geek North America 2019: Innovation from In-House Out

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By Caroline Hansen
| Event Recap

On June 25, 2019, co-founders Basha Rubin and Mirra Levitt spoke at Legal Geek North America in Brooklyn, NY, to a crowd of over 400 legal tech entrepreneurs, attorneys, journalists and thought leaders. In “Innovation from In-House Out: Priori’s Collaboration with Hearst,” Basha and Mirra shared key takeaways from Priori’s partnership with Hearst, as well as tips for how startups can drive innovation, and unlock future business, by working closely with in-house teams. We’ve provided a transcription of their talk and slides below. 

Basha: Good morning! I’m Basha Rubin, and this is Mirra Levitt. We’re the co-founders of Priori, the legal marketplace reimagining legal services’ delivery for in-house teams using a global vetted network of boutique firm attorneys. LegalGeek invited us here to tell you about our decision to embed our whole company within the Hearst Corporation Office of General Counsel for the past 18 months and how that has shaped our perspective on how startups can best work with in-house teams to drive innovation. 

We’re all here today because technology has the potential to improve the legal profession -- by making legal work more efficient, driving costs down for end-users and enabling lawyers to focus on the more creative aspects of the craft. Certainly, that’s what convinced Mirra and me after graduating from Yale Law School to do something very different than our peers by starting Priori. But the devil resides in the details, and it’s not news to anyone either that lawyers have a well-earned reputation of being risk-averse.

 

Forgive a quick story, when Priori was first starting out, we were looking to hire ethics lawyers to evaluate our business model. One who came highly recommended to us told me on our initial consultation that Priori was the stupidest idea he’d ever heard, and there was no way we’d be successful. Why would anyone ever trust an online service to find them a lawyer? 

A stupid idea, I’ve had plenty of, but it couldn’t possibily be that I had come up with the stupidest idea someone who had lived on this earth for 50 years had EVER heard. 

(Oh, and in case you were wondering, he closed the call by asking us for a retainer…). 

That was the first time our idea was called stupid, but it was not the last. Lawyers are trained to vigilantly identify and mitigate risk, so it’s no surprise when businesses like so many of ours come in and threaten to upend the way “things have always been done” that some lawyers’ overprotective instincts go into overdrive and refuse to engage. But experimentation is the only way to find the solutions that work. 

When my team interviewed Richard Susskind last year, he told me that he sees Clayton Christensen’s “innovator’s dilemma” in full effect in the legal industry today. He said: “When I’m addressing partnership meetings at major law firms, I find it hard to convince a room full of millionaires that they’ve got their business model wrong.” The idea is that when a market leader is doing very well, there isn’t an incentive to change, and most often don’t change until it’s too late. 

This is certainly true for law firms but it is discussed much less frequently that in-house teams stand to lose too. Theirs is a bifurcated future: one in which the in-house department is relegated further into the back-office, and one in which the in-house department steps up to a business partner and a revenue-driver. The question for startups like ours is how to implement change in the absence of an imminent, perceived crisis. 

At this point, you probably need to know a bit more about us: Priori partners with in-house teams at companies of all sizes: from the Fortune 500 and top technology firms to solo in-house counsel to reduce their outside counsel spending by 60-80%, using: (1) a global vetted network of boutique firm attorneys, whom we vet using a proprietary data-driven process we’ve developed; and (2) a technology platform that sits on top of the attorney network and aims to drive efficiency at every stage of the process of engaging with them, from initial RFP through to billing and invoicing. We believe that the marketplace is poised to replace the law firm as the primary delivery mechanism of legal services, and our goal is to become a single-source solution for in-house teams’ “run the company legal work.” 

At its most basic level, our business works like many other marketplaces you’re familiar with in other facets of your life - like an Uber, Upwork or Airbnb. We’re the connective tissue that provides access and facilitates scalable logistical support to disaggregate a traditional firm model. The key to our growth is repeatability, so we needed to find ways to tap into something universal at myriad, very heterogeneous in-house teams. 

One impediment to that repeatability is that we’re asking in-house lawyers, the gatekeepers of risk, to rely on our technology rather than their personal relationships to do an integral part of their job. But 90% in-house budgets go to outside counsel spending, and we see tremendous opportunity to make that more efficient. 

With all that said, when Priori first launched, our earliest adopters were in-house legal teams at fast-growing startups without preconceived relationships or processes. That was all well and good, but in order to scale our business, we needed to find a way into more traditional legal departments.  

 

In December 2017, we had a game-changing opportunity. Hearst, the leading global media and information services company that owns and operates more than 360 businesses, led an investment in Priori. Why this might be the case isn’t immediately clear, except when you learn that one of Hearst’s investment arms is founded and run by Hearst’s Chief Legal Officer, Eve Burton. 

She is laser-focused on attracting top talent to her department and making its practices cutting edge, so Eve invested because she saw how Priori could improve the outside counsel selection process, improve in-house satisfaction and rightsize costs. 

To maximize those benefits, Eve invited team Priori to move into the Hearst Tower onto the same floor as the Office of General Counsel when she made the investment, and so we uprooted our very startuppy startup team and moved them into the heart of corporate New York. For us, it was an unprecedented opportunity to enter the belly of the beast - and try to unlock growth from a more traditional user base.

I’m going to turn the floor over to Mirra to tell you what we learned. 

Mirra: Through our experience at Hearst, we have landed on three key principles that have unlocked relationships with more traditional corporate buyers for us. The principles may also help in-house departments themselves move past the innovator’s dilemma.

  1. Start from a baseline of mutual understanding and build from there. When we first connect, traditional companies often group Priori with staffing firms. Hearst was no exception. Our network of lawyers at boutique and midsize firms globally was just outside of Hearst’s law company experience. So, we started by delivering wins on the work they expected. Once we built trust, we added on the higher-impact work that is our core capability.

  1. Embrace agile’s messiness. Agile development allows you to iterate quickly, but some messiness is part of the game. Lawyers are perfectionists by nature. There is a tension there, which we saw in real time when lawyers, confronted with even a small issue, disengaged. 

For example, our matter onboarding flow used to be a free-text RFP, which was a high velocity but low specificity solution. This meant that - fairly annoying - follow-up was sometimes required to get additional data. We wanted to do better, so when developing our structured data RFP builder, we included a Hearst lawyer in our agile process starting at the design phase, to excellent results. 

For that attorney, the project changed how he thinks about hiring outside counsel generally & legal tech. For us, we realized needed to engage our clients as co-conspirators in more fulsome ways, not just one-dimensionally post-deploy. 

  1. Innovate don’t disrupt. We’re suggesting that in-house departments do an old thing, a new way in order to achieve significantly better results. This mission is disruptive, but it can’t feel disruptive of team culture or work standards. So we stayed away from broader narratives at Hearst, instead winning over skeptical lawyers by focusing on how we save time so lawyers can do more of what they excel at.

Stepping back, the relationship between Hearst’s OGC and Priori has changed both organizations for the better. 

For the OGC: By integrating us into the department, Hearst could see barriers to adoption and work to eliminate them. It also accelerated Eve’s efforts to instill a culture of innovation, shifting the focus from cost to partnering with Hearst portfolio businesses to look towards the future. 

For Priori: we learned to collaborate more effectively with clients in order to tap into the network effects that define a successful marketplace. This has created a flywheel where usage of the product by a user increases the product’s value for all.

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