This week on The Geek in Review, we welcome Zach Posner, co-founder and managing director of The Legal Tech Fund. Zach brings a dynamic mix of first‐hand experience and visionary insight into the world of legal tech investments. The conversation kicks off with a discussion of recent high-profile funding rounds—such as Harvey’s $300 million raise—and the growing influx of generalist VC interest in the legal space. This episode sets the stage by framing legal tech as a rapidly evolving market that’s finally getting the spotlight it deserves.

Decoding Funding Dynamics and Early-Stage Challenges
A key portion of the discussion centers on the inefficiencies of early-stage funding in the legal tech arena. Zach explains that, unlike public markets with readily available metrics, early-stage investments rely heavily on personal relationships and entrepreneurial trust. He highlights how the lack of data and public comparables makes each handshake a significant moment of risk and opportunity. The dialogue provides listeners with an insider’s perspective on why leadership credibility and entrepreneurial vision are often more critical than raw business metrics in legal tech startups.

Community Building and Collaborative Innovation
Another major theme in the conversation is the importance of community and collaboration. Zach underscores that the Legal Tech Fund isn’t just about injecting capital—it’s about cultivating an ecosystem where startups, law firms, and legal departments work hand-in-hand. The fund’s unique approach of engaging with 65 different portfolio companies daily has fostered a network that benefits from shared insights and strategic partnerships. This community-first approach, according to Zach, is instrumental in driving both innovation and seamless product integration for legal professionals.

Embracing AI and User-Centric Solutions
The conversation takes a forward-looking turn as Zach discusses how artificial intelligence is revolutionizing legal workflows. While many legal tech innovations focus on enhancing efficiency, he stresses that creating an exceptional user experience is paramount. Zach notes that the rapidly evolving AI landscape demands that legal tech startups not only keep pace with technological advancements but also prioritize intuitive design and seamless integration. This approach helps ensure that even as technology becomes more powerful, it remains accessible and directly relevant to the end user.

Looking Ahead: The Future of Legal Tech
Wrapping up the episode, Zach offers a crystal ball view of the future, predicting that the next few years will see even more dramatic changes in legal tech. From AI-driven workflow automation to innovative partnerships between law firms and startups, the sector is poised for transformative growth. He encourages legal professionals to experiment, learn continuously, and stay curious about emerging technologies. For listeners eager to explore further, Zach directs them to legaltech.com and TLTFsummit.com, promising more insights and upcoming announcements. This episode is a must-listen for anyone interested in the convergence of law, technology, and innovation.

Listen on mobile platforms:  ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Apple Podcasts⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ |  ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Spotify⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ | ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Transcript

Marlene Gebauer (00:08)
Welcome to The Geek in Review, the podcast focused on innovative and creative ideas in the legal profession. I’m Marlene Gabauer.

Greg Lambert (00:15)
And I’m Greg Lambert and on this week’s episode, we are joined by the fantastic Zach Posner, who is the co-founder and managing director at the Legal Tech Fund. Zach, welcome to the Geek in Review. So yeah, Marlene has gone, I think, to multiple TLTFs. still, well, that’s multiple, two is multiple.

Zach (The LegalTech Fund) (00:29)
Thanks for having me.

Marlene Gebauer (00:38)
That’s true, that is a multiple, you’re right.

Zach (The LegalTech Fund) (00:38)
that

Marlene Gebauer (00:40)
Great,

great event, really,

Greg Lambert (00:40)
take my

we’re happy you’re here. We thought we’d start off with a little banter. So this week we had, we saw some funding, $300 million and I think an over $3 billion valuation for Harvey, which was a whole group of funders that pitched in on this round. enough, RELX who’s the parent company of LexisNexis.

was one of some somehow involved in that. But really wanted to kind of talk to you about, yeah,

Marlene Gebauer (01:09)
Yeah, everybody’s questioning that. Everybody has lots of questions about that. Like, hmm, why?

Zach (The LegalTech Fund) (01:13)
That

meeting may or may not have happened at the TLTF summit, by the way. That introduction. or may not have.

Greg Lambert (01:17)
Okay. May or may or may not have

can’t cannot confirm nor deny. But I was really kind of wondering as you know, thinking about this, are there some deficiencies in the way that the that you think the legal tech markets being funded some of these startups, whereas you know, I think you see a lot of funding going in certain directions.

Marlene Gebauer (01:21)
You were in the room where it happened. That’s great.

Zach (The LegalTech Fund) (01:22)
Yes.

Greg Lambert (01:42)
Do you think there’s certain parts of the market that aren’t necessarily getting the right amount of attention that they may deserve?

Zach (The LegalTech Fund) (01:51)
Absolutely there deficiencies absolutely look we’re in the we’re in the private markets and You know some of the stuff you just is some of the transaction We just talked about a little bit later stage, but at the earliest stage of this there’s no public comparables You know at the end of the day these are handshakes when two parties agree to you know to raise capital so it’s

It’s not an efficient market. It’s not like a stock trades in a real time basis and there’s buyers and sellers and it’s kind of, you know, we’re about as far away as you can get from that. so it has just conception, I think, but I think that that always exists. I think that getting more to your question, legal is having a moment. You know, you have a trillion plus dollar industry per year.

And I think it’s the first time that people are really seeing a path where technology can play a meaningful role. you know, it started out by the folks that have been tracking this space for a long time and in around it. But what happened with the advent of LLMs is all of sudden, this became the popular space because, know, what do these things do? They go, they synthesize.

and they read large bodies of information, they analyze that information and they output some text. It sounds a lot like a human capital worker does. So while people had resisted investing in innovation and around legal for decades, I think the whole world is now looking at it. So what that means is, it’s not just sector VC funds like us that are focusing on this, but it’s every generalist VC fund in the world.

That says hey, we think there’s something interesting happening in legal So what happens is they come in and they all want to bet in legal They all want to be able to say we’re gonna be a part of this and here’s our opportunity But what that does is for certain cohort of companies that bids up the prices of these So I see that and then at the same time I see when we really started thinking about this vertical five six seven years ago

the trends that we saw that were fascinating had to do with like broken workflows and just a level of software that didn’t exist, that basically exists in every other vertical. You know, this is the last C-suite to go through a technology revolution and that’s kind of what got us excited. But then the AI brought a whole other level to that. And I think that’s what got the rest of the world excited about things.

Marlene Gebauer (04:07)
So you mentioned the stock market, and I thought that was interesting because in the stock market, you have information on what you’re going to be trading on, what you’re going to be buying and selling. You have data. We don’t really have anything like that in terms of legal tech startups, in terms of being able to evaluate that way.

Zach (The LegalTech Fund) (04:31)
we do like, cause, cause this is all that we do. we see a lot of things, but, but, I think, I, I think, but I think what you’re really saying, what you’re really suggesting is just like, um, in general, early stage companies and ones that we make bets on that times, there is no data. Like when, if Marlene and Greg come to us and say, Hey, we want to do this. We have this idea for this company. You know, you’re, you’re.

Marlene Gebauer (04:33)
Right, because you’re doing this, this is your job, but mean, it’s not public.

Zach (The LegalTech Fund) (04:57)
starting the company right there that you can’t send us 30 customer contracts to review. You can’t send us your financials from last year because he didn’t exist. you know, like, well, like just to give you a little bit of framing, I mean, the way that we think about the world is like, the entrepreneurs are the most important people in the room. And I think that you kind of have this spectrum where, if this is time,

In the beginning, and this is like business versus entrepreneurs, in the beginning, you’re all about the In the later stage companies, like the example that I think about is like, if there would be a change of CEOs at Coca-Cola, I’m pretty confident you’re gonna walk into your 7-Eleven tomorrow and you’re still gonna be able to buy So over time, the company becomes more important and the business becomes more important and the metrics become more important. But in the stages that we play at,

pendulum is way more on the entrepreneurs and part of that’s because yeah, because look You like you guys are come to us and with your idea and and and most entrepreneurs that come to us with their idea like their idea is wrong and the question is do they test that out and do they realize wait a second? It’s not really a that we want to do for our cut that our customers want it’s B So let’s just like go like this

Marlene Gebauer (05:50)
It’s more about the people. Do you have trust in the people?

Zach (The LegalTech Fund) (06:13)
But you need the people that can make those decisions. So that’s why, like, as an early stage venture capital fund, like, we’re all about the people that we’re investing in.

Greg Lambert (06:22)
Yeah. Let me ask what might be a dumb question. What benefit do these startups have in essentially announcing the amount of funding that they’re getting? I mean, we’re coming from an industry that announces what their revenues and profits per partner are so, and I mean, there’s certain bragging points to it, but.

Zach (The LegalTech Fund) (06:43)
It’s actually the same thing.

It’s perceived value of leadership. So, you you guys have both procured software before. when you bet on a company that just raised $300 million, chances say they’re not going to go out of business tomorrow. You know, when you bet on a company that raised $300,000, which doesn’t get advertised that much, well, there’s some inherent risks with that.

Greg Lambert (06:47)
Okay.

Zach (The LegalTech Fund) (07:07)
So I think that the bigger the dollars are, the more that people are proud to announce them and tell that And I said perceived value leadership because there are times where you want to bet on the company that’s raised a million dollars opposed to a hundred million dollars. it just breeds, you know, it breeds different mentalities. They hire different people and if those things aren’t aligned, you may be much better off partnering with a company that raised a million opposed to a hundred million.

Greg Lambert (07:30)
Yeah, well as a buyer I know sometimes we flinch when we see how much money because we’re like, well we know they’re gonna raise that money out of our subscriptions.

Zach (The LegalTech Fund) (07:39)
Yeah.

Look, it happens at time, I think that this is also a competitive space. So, my guess is AI, you know, some of these LLMs were pricing a lot higher a year ago than they are today.

Greg Lambert (07:53)
Absolutely.

well let’s jump into the Legal Tech what’s your vision behind the Legal Tech Fund and kind of what’s the motivation behind getting into this and selecting startups to invest in?

Zach (The LegalTech Fund) (08:09)
So just kind of always been a fan of pushing things forward, pushing innovation forward in different areas and kind of helping entrepreneurs. I think that, that’s where this all started from. I’ve sat in their shoes a couple times, made every mistake you can possibly make and some of the most fulfilling.

some of the most fulfilling conversations that I have in my career are just stopping people from making mistakes or just being like, hey, I’ve seen this, I’ve seen this movie before. I’d recommend you think about this, this and this. And, know, that was kind of the start of it. I think what happened is we’re, I’m personally really passionate about building communities. And this is an area where

Building a community can advance an entire ecosystem that has the ability to accelerate our portfolio companies. And so it feels like you’re waking up and doing something in service of a lot of different things every day. it’s, you know, most days are pretty awesome.

Marlene Gebauer (09:04)
So.

Zach, probably a lot of our listeners, you know, don’t really know what goes on in terms of, of, you know, creating a fund and, know, funding legal tech. So, you know, hopefully we can take a little peek behind the curtain here. And you know, beyond the obvious, the funding of, of, of these startups, how does TLTF support the portfolio companies? You know, and what are your plans to, to stay ahead of trends with your portfolio? Like, you know, web3

or just AI and whatever, quantum, or whatever’s coming up behind those.

Zach (The LegalTech Fund) (09:37)
Yeah, well,

I mean, that goes back in like service of the entire community. know, collectively, we’re a small team. We’re on directionally about 50 Zoom calls a day at this stage. And you got to think about that. Like our whole universe is like a shared universe.

You know, we’ve publicly announced we’ve had some large law firms and some strategics invest in us. so what that means is like, we get to talk to our investors about what we’re seeing in the marketplace, about what they’re seeing in the marketplace. we get to talk to early stage companies about the types of technology that they’re building. We get to talk to the later stage companies about the types of companies that they want to acquire and the gaps that they see in their product. So I think that,

Just understanding what’s happening and being current and understanding who the partners are that can help to accelerate the growth of the early stage companies that we’re investing in is a massive advantage compared to almost any other fund in the world. And it’s because we’re thematic.

and you know we’re the largest, we have 65 invests, there’s nobody that comes close to having 65 investments as of today in this vertical and it just enables us to see further. You know it’s almost like unfair, it’s almost like there’s a, I think Isaac Newton is quoted for this quote but it’s, I don’t know if it was actually him but it’s, if I,

If I see further, it’s because I stand on the shoulder of giants or whatever it is. And that’s how I feel like what we get to do every day.

Marlene Gebauer (11:05)
We’ll just say it is.

I mean you also give them a platform, you know, just in the conference where they, you know, they get to showcase to, you know, a variety of people kind of outside the fund. So, and I don’t know that any investment places do that. Oh, okay.

Zach (The LegalTech Fund) (11:22)
Well, that’s the ironic part. That’s actually the one thing we don’t do.

And I say that because when we have the event, it’s meant to be a community event. And if we just put our companies up on the stage, that wouldn’t be… So for I mean, some of our companies end up on the stage, but I’d venture to say 70 % or not. And…

Marlene Gebauer (11:39)
Right.

Zach (The LegalTech Fund) (11:47)
You know, so we actually, it’s the one thing we stay away from is picking the companies on the stage. And we have a team of judges that gets to go through about 400 applications and everybody’s all enthusiastic to like sign up to help us be an advisor to the summit and be a judge. And then we actually email them and they’re like, hey, here’s your hundred companies and decks and videos that you have to review and you have three days to do it. thank you.

Marlene Gebauer (12:10)
You

It’s important to sort of keep it, you know, keep it sort of outside, but you know, they do get the chance to, they do get the chance to competitively try.

Zach (The LegalTech Fund) (12:14)
Yeah.

Oh, we, we, oh, we, by the way, we,

there’s lots of other opportunities and we are out there. I mean, at the end of the day, we’re out there talking about our companies every day. Like we know, I’ll bet I mentioned of our portfolio companies on a daily basis, you know, and that’s, you know, when we’re sitting there and we talk to the, this morning, we talked to the chair of the AmLaw 100. talked to.

Marlene Gebauer (12:22)
Yes.

Zach (The LegalTech Fund) (12:44)
two different general councils, they were telling us some of their challenges. We were like, hey, have you talked to this company? Have you seen this? Have you seen that? And so, I mean, that’s where the magic really happens. We are so proud of the companies. We are so impressed with their technology that like we want to just take the megaphone and shout as loud as we possibly can.

Greg Lambert (13:04)
You mentioned that you’re talking to law firms, law firms are investing in TLTF as well. So why is it that law firms and legal departments should be paying attention to legal tech startups and how can they collaborate with these startups to help them improve?

the needs that they have for legal services.

Zach (The LegalTech Fund) (13:28)
Look, it’s the ultimate strategic investor construct. mean, you see this in almost every industry that says, for the forward thinking customers, if they can get a sense as to what’s coming around the corner and help these companies shape their products, that’s like a massive win for them, a massive win for our companies, and hopefully a win for us along the way.

Greg Lambert (13:52)
you finding that law firms are breaking out? Because I know for years, we were kind of stuck with the budgets, no real long-term strategy because things turned over after the end of the fiscal year. or profits needed to be divested.

what caused a change that the firm started looking a little longer term?

Zach (The LegalTech Fund) (14:18)
So multiple levels of answers to A larger level, one of our portfolio companies, Ted at InfoDash, he posted something on LinkedIn that I saw and it said something like 15 years ago, he went to Ilta or one of these shows and there was like seven people with the title Chief Innovation Officer. And now I think he fast forwarded and I think he, I forgot what he said, but it was.

some number that has multiples of that in the hundreds. You know, if you just search on LinkedIn. I think there’s been a longer trend that said, hey, legal is the last of the C-suite to adopt with technology. So that’s going to happen. And then I think more recently, look, the, think it was November 30th, 22, that’s when they came out with the chat GPT demo. And when people saw what a large language model can do, the demo was so good.

Marlene Gebauer (14:46)
lot more.

Zach (The LegalTech Fund) (15:13)
that I’m sure you guys remember where you were when you saw it and you’re just like, wow. And I don’t even know to what extent it worked at the time, but it just looked so good that I think that for the first time, every person in every human capital industry said, my gosh, this impact our business in a meaningful way. And then, so I think from that point forward,

everybody took it seriously. You your Fortune 100s that have mandates that say every division of our company is going to be using AI in a cost, so I think that that pressure then comes back from the general counsels to the law firms. So I just think that that was a milestone moment. So there’s like two levels, this.

Let’s let technology catch up and legal but then there was this accelerator that said, here’s some technology that looks like it can really do a lot of interesting things.

Marlene Gebauer (16:05)
It’s like a significant change as opposed to kind an incremental like how some of them were prior to that. Yeah.

Zach (The LegalTech Fund) (16:10)
Exactly.

Now, by the way, I still believe the incremental workflow, like that there’s still massive opportunities there and that’s the, that’s probably the stuff a lot of people are ignoring right now, but we’re kind of seeing some pretty amazing businesses being built.

Marlene Gebauer (16:14)
Yep.

Greg Lambert (16:24)
Yeah, had a guest on recently that talked, well we’ve had actually a couple of guests that talked about the stress on the buyers in the market right now. There’s just so much coming at them. got a solution. Every company that you’ve ever dealt with suddenly now has an AI functionality. There’s thousands of new things.

Marlene Gebauer (16:46)
figuring out how it’s gonna integrate with your existing

stack, all of that.

Greg Lambert (16:49)
Yeah. So

how do we keep our head above water here and not just, for me on 50 calls a day, just looking at every new thing that, comes in.

Zach (The LegalTech Fund) (16:59)
So it’s tricky. I think the first thing that I recommend is to just familiarize yourself with this stuff as much as you can, even in a personal capacity. Open up ChatGPT, even in your personal life, and understand it. Because I think there’s actually bigger questions than just sorting through the noise now. You have a construct of, there super specific applications, or are there…

broad tools. where do you think legal is going to end up operating? is this something that like you can just work with Microsoft on and they’re going to provide you enough tools? Or is this stuff like, no, we’re going to need 800 point solutions. So I think that there’s some larger strategy questions, I think that no matter how you think about these, no matter how your law firm thinks about these,

There’s going to be, you’re going to have to experiment with this stuff. You you’re going to have to understand it in a meaningful way. And I think that things are changing so quickly that the more you’re experimenting with it, the more on top of it, the more you’re going to be able to seek out what it is that you’re looking for. And…

You know, that’s a firm by firm bet and that’s a, or you know, that’s like unique to almost every situation. You know, the thing on the back of my mind is all of this stuff is a heavy lift. There’s a lot of change management that comes with this and that’s like a challenging thing for folks. So it’s almost like, pick the areas that you want to implement this stuff in carefully because…

Marlene Gebauer (18:10)
Yeah.

Zach (The LegalTech Fund) (18:25)
the same amount of work for something that matters versus something that doesn’t. So pick an area that matters and it matters to your business and kind of double down. And I think that if you’re experimenting and you understand what’s possible, that will help you navigate through all of the vendors that are out there. If that makes sense.

Marlene Gebauer (18:42)
does. It sounds like the innovation team or whatever team, there should be some sort of dedicated resource to kind of keep an eye on that and do that type of investigation. Do you think? Yeah, we may have a bias on that.

Greg Lambert (18:54)
Of we may have a bias on that.

Well, let me just kind of pull it.

Zach (The LegalTech Fund) (18:57)
20 dedicated resources. Everybody needs 20 dedicator.

Greg Lambert (19:02)
Absolutely. Well, let me pull on that thread just bit, Zach, and get your, get your opinion on it. Are you, mean, you’ve, you’ve looked at enough law firms. are you seeing a, a better strategy? Is this a, is this a technology issue? Is this an innovation issue? Is this a lawyer workflow issue? Because I, I’ve seen kind of just off the top of my head, kind of three methods that you can, that

firms are approaching this. One is it’s an IT technology, how do we integrate it into our stack? Two, it’s an innovation, it’s a change. We have to look at the different solutions and figure out how it fits best into the overall practice of the firm. Or three, I’m a lawyer that has a certain workflow and I’ve got to have this tool and so you’re going to go buy it for me.

Are you seeing anything that works better than one over the other?

Zach (The LegalTech Fund) (19:58)
I don’t like the first, I don’t love the first one. The little bit more of the IT, like looking at it from that lens versus innovation because like that kind of captures the change management construct. Like, you know, to do these, these are expensive implementations. They’re heavy. people are going to like be…

You know, you’re going to upset people. It needs to be a strategy. It needs to be… And then the individual attorney thing, like they’re usually the best to equip to understand if you go down to that like point level type of solution. Like, you know, they’re not getting a hundred things a day, but they may be getting two a week and those two are very much aligned to what they do. So…

No, see it. Look, I think the only thing you can’t do is ignore this stuff. And we definitely see two cohorts of firms and we, and it’s just interesting, the ones that are leaning into it, you know, like if you want to keep unpacking, you can be like, wait a second, does this have the risk of hurting law firms revenue in some capacity? And what we see is like the innovative. Yeah, it certainly does in it, but it certainly does at like the lowest level of work for the next couple of years. And

We see a couple of law firms that want to lean into this stuff. Like they don’t want to charge their clients infinitely for contractor views at a thousand dollar an hour associate rates. You know, they want to be a thought partner. So I think that, I think there’s a whole mentality that comes with this and it needs some buy-in that’s not just coming from the IT side. It needs to be coming from.

the leadership team that says, we’re going to need to understand this stuff, which is the innovation. And then it’s also amazing when it comes to the practice level and individual attorneys are saying, we want this.

Marlene Gebauer (21:35)
So I’ve been doing some reading, Zach, and sort of hearing in sort of different spaces where people are talking about continuing legal education, but we also need to have attorney continuing technical innovation given the fact that we are seeing this incredibly rapid changing and potentially changing of products or changing of the way we use existing products.

Where do you see this happening best? What advice would you give to law schools, CLE programs, firms, the companies that put together training should they be doing to best keep people educated?

Zach (The LegalTech Fund) (22:23)
I mean, from an individual perspective, being experimenting with this stuff is… Because when you experiment with it, you understand what it can do, and then you can connect the dots in your head for how you can apply it in your day job. And the type… That is the most important thing. And it’s just like, imagine you’re interviewing somebody out of law school, and you’re interviewing two candidates, and one is telling you about this story, how they used AI to, you know…

Marlene Gebauer (22:33)
Basically get your hands dirty and do it.

Zach (The LegalTech Fund) (22:48)
planned their vacation two weeks ago and it did everything for them and it took them to the wildest place in Japan that you’ve ever heard of and here’s the… And one doesn’t use any of this stuff. Like who do you think is going to be more creative I think the skill set that we all need to have and that I would… That I’m trying to instill into my kids but they don’t listen. It’s just the ability to learn… to…

You have to learn how to learn. Like that’s the skill set for the future, because then when things are changing in a rapid way, so people that are open-minded with a growth mindset are the ones that are going to like grab this stuff in the next couple years and take advantage of it. you know, this is nothing we’re talking about. Bill Gates has a famous quote, people overestimate what happens in two years and they underestimate what happens in ten.

kind of where we are with this stuff. So I think it’s going to take longer than people think to have a dramatic impact, but the ones that can understand it in the next couple years are gonna be the ones that can reap the benefits from it.

Greg Lambert (23:48)
Yeah. Let’s switch gears a little bit and go back to the startups. I want to talk about collaboration. I know you’ve stressed about knowing your client, the KYC process for startups and understanding what roles do law firms and legal departments in collaborating with them. And then kind of vice versa, that law firms and legal departments need to also

collaborate back with the the startups so your views on that kind of knowing your client for startups

Zach (The LegalTech Fund) (24:24)
Well, I think that the way we’re talking about moving into new worlds here, I think that there’s lots of people at law firms or at clients of startups that are fascinated and want to be a part of building the future. So we see almost all of our companies at the earliest stage finding prototype partners and finding early customers that are beyond influential in the roadmap.

and what happens to these products. So we encourage all of our startups to, you know, the mask off and say, hey, we’re just a company trying to figure this out. You’ve been doing what you’re doing for 20 years. Can we work really closely with you?

and try to help you achieve your goals. Because chances say there’s a lot more people just like you. So yeah, we’re big believers in that innovation approach and working closely with your customers. And that’s usually when good things happen. Opposed to the opposite, think that you know everything in the back of your mind. So you take a year or two and you build the perfect product for you. And then you found out nobody wants to use this thing.

Greg Lambert (25:29)
Yeah. No, that’s never happened to us, it?

Zach (The LegalTech Fund) (25:30)
So I go, look.

Marlene Gebauer (25:32)
That I’m

gonna say that that does and that does happen.

Zach (The LegalTech Fund) (25:35)
Yeah,

mean, look, the tighter the relationship with the end customer, the less surprises, you know, the whole agile development construct of saying, let’s kind of move in tight cycles. Like, what that does is that gives you quick feedback that lets you know if you’re, you know, go down this path, tweak it, tweak it, whatever it is.

Marlene Gebauer (25:57)
I know you can’t stress how important it is to kind of do your diligence and understand your client and how they work and what they’re trying to solve. Because even if you’ve done it before, your problem may be slightly different or you may have a slightly different approach than what they are. So one of my favorite words lately is seamless,

Zach (The LegalTech Fund) (26:12)
Exactly.

Marlene Gebauer (26:17)
We’re hearing that a lot, like we want solutions that are seamless, that basically integrate within an attorney workflow. They don’t have to think of anything. They barely need to be trained, if at all.

of course that’s always been the goal, but we seem to be a little bit closer, you know, given some of the advancements in the last couple of years. Yeah. Yeah.

Zach (The LegalTech Fund) (26:42)
the golden ticket in our opinion right now.

Marlene Gebauer (26:46)
So what advice

would you give startups on that user friendliness? And are there examples of companies that you think have excelled in creating this type of experience?

Zach (The LegalTech Fund) (26:51)
That’s.

That’s where the focus would be. That’s what we’re encouraging our startups to do. Almost like user experience, arguably is the first time, it’s really like almost, it’s more important than the underlying technology at this stage. Because what’s happening is the tech is evolving so quickly that every six the power of these things is doubling and tripling.

What you need to focus on is making sure that that experience is perfect and that you’re working to have to move towards that seamless goal. Because if you can be seamless, you know, what may be 95 % accurate right now is about to be 98 % accurate. So opposed to saying, hey, all we’re going to do is focus on the technology, I would say right now we think a lot about focusing on an amazing user experience. And that’s also the ticket when people see the software like…

That’s it. That’s what I’m looking for. You know, and it’s…

Marlene Gebauer (27:53)
They kind of have that aha

moment. like, that’s exactly what I need.

Zach (The LegalTech Fund) (27:57)
Yeah,

and I mean, look, at the end of the day, it’s the evolution of verticalized technology. Like, Microsoft Word came out and it was pretty cool, but then you had the word plugin that came out, and that’s why firms spend hundreds of millions of dollars a year on, there are billions of dollars a year on these plugins. It’s just trying to create a little bit more of a seamless experience. And I think that we’re about to see that in a much bigger way with this next wave of tech that we’re seeing.

Greg Lambert (28:23)
Yeah, and I think, you know, I’ve been seeing that and think a lot of us thought that the big vendors who already had a presence, who already had users that knew their products were, was gonna be a slam dunk for them. And I’ve noticed that, you know, some of the big legal research vendors, even Microsoft with their office suite have kind of,

forgot about the ease of use, that seamlessness. And instead, they’ve kind of like, I think, tried to force an AI product, had learned to use through like a chat interface. And then they just kind of shoehorned it into their product. And I get lots of complaints of, well, I…

I want to use it but it is clunky, I can’t figure it out, it doesn’t give me the answers that I think.

Zach (The LegalTech Fund) (29:17)
Look, look,

all of this is just the reason startups start, you know what mean? That’s it, and that’s why we’re in business, you know, and it’s not the incumbents or the big companies’ fault. Like, there’s reasons that this, you know what I mean? You get years and years of building and stacking things on top of each other, and startups don’t have to carry the burden of that past with them. they get the pleasure of just starting from a clean slate.

Marlene Gebauer (29:42)
things, I

hope we can whip up a point solution then, but the big vendors can’t necessarily do that so quickly.

Zach (The LegalTech Fund) (29:46)
Yeah,

so yeah, that’s exactly, that’s the calculus, you know.

Greg Lambert (29:53)
Before we get to the crystal ball question, I want to ask you one off script here. I think we all know Toby Brown. has a saying, he has multiple kids and he will always say, I always have a favorite kid but it’s not always the same kid. And so I’m wondering your stable products, are there any real success stories that you’re really…

hyping up right now.

Zach (The LegalTech Fund) (30:17)
We have a lot of favorites. No, no, no. I just think that it’s… No, no, it’s not even… You can’t. You can’t publicly… No, no, it’s physically impossible from the construct of… I was on… They told you guys I just got back from Denver. I two board meetings in the last two days. One was for Proof Serve, which was Uber for process serving.

Marlene Gebauer (30:19)
Can’t make him publicly pick a favorite.

Zach (The LegalTech Fund) (30:45)
So think about that construct. then actually the other one sounds very similar, but it’s not. A company called Single File, is helping to incorporate, it’s helping law firms when they incorporate companies, where instead of using, know, basically it can sync up both systems, both companies sync up to law firms through their systems.

can interact automatically to on a process serve or to form a new company. These are very different worlds. One in the corporate world, one in the litigation world. And you can point to almost any area in and around, any practice area that a law firm has, any type of software that’s used in general counsel. When you have 65 of these things, they take different shapes, different sizes, different forms.

They all have fascinating stories and they’re all doing interesting work. but I like that quote from Toby.

Greg Lambert (31:43)
So now we’re at the crystal ball part of our conversation. So Zach, out your crystal ball, which I know you have because your whole life is like projecting the future here. So looking over the next couple of years or so, what do you think are the biggest opportunities or even the biggest challenges in legal tech innovation?

Marlene Gebauer (31:55)
That’s what you do.

Zach (The LegalTech Fund) (32:08)
The two biggest, the three big constructs that are out there, I know this, I sound like a broken record when I just talk about basic workflows being fixed. You know, I just told you about two great companies, Proof doing process serving and Single File doing entity formation.

and they both, they’re both going to be accelerated via, they’re both using AI and interesting ways to help, you know, but almost like round corners. It’s basic workflows. instead of calling faxing over something to a local mom and pop company that does serves in Minnesota, you can now just log on and hit one button and you’re there.

So I the basic workflows, there’s tons of opportunities. I think AI, like again, that two year, 10 year thing, we haven’t seen anything. Like we haven’t even started. And then the third one that I’ll pull a little bit out of right or left field is the construct of what’s happening in Arizona with these ABS’s. you know, I think we’re up to four or five states right now that that list seems to continually be growing.

So what gets me really excited is like the combination of all of these and what happens when you get a vertically focused law firm that aggressively uses software and AI, you know, and that can be owned by non-lawyers. So you can see outside capital coming into that for significant investment. So I think what gets us most excited are the things we can’t even see right now.

And I think they’re there in the crystal ball. I don’t think they’re a decade off. I think you’re going to start seeing some of this stuff in the next couple years.

Greg Lambert (33:40)
Like I keep saying, it’s a very exciting time to be in the market right now.

Marlene Gebauer (33:44)
Yes, exactly.

Zach (The LegalTech Fund) (33:44)
This is the greatest,

I mean, I guess if you’re an optimist and you’re technologist and you think the early stage, it’s always the greatest time because the technology keeps enabling you to do more and more things. And I mean…

Greg Lambert (33:56)
Web

pages are really cool in the late 90s.

Zach (The LegalTech Fund) (34:00)
There you go.

Well, well that’s what I use the example Marlene. I don’t know if you heard my speech like, you know, this thing came out in 2007 and Greg I want to ask Marlene, but do you know what the number one app was in 2007? The number one free app was when this thing came out?

Greg Lambert (34:19)
I’m cheating because I think I’ve heard this one is is the beer drinking app

Zach (The LegalTech Fund) (34:22)
is the beer and then the

number one paid app was flashlight. the paid app was flashlight and you just think about how now, if you go away, if you’re on vacation and something pops up, you have access to everything you’re doing in your office right here. can write a…

Marlene Gebauer (34:26)
That’s because Greg had it.

Greg Lambert (34:29)
It’s true.

Zach (The LegalTech Fund) (34:44)
You know, you can write an email, you can call people, you can do a Zoom call. In fact, you could do this whole podcast on this thing. So it’s like, that’s the difference between two years and 10 years. And I think that that’s what we have to look forward to.

Greg Lambert (34:57)
All right, well, Zach Posner from the TLTF, thank you very much for coming in and talking to us today.

Zach (The LegalTech Fund) (35:04)
Thank you guys for having us. Thanks everybody for listening.

Marlene Gebauer (35:07)
And of course, thanks to all of you, our listeners, for taking the time to listen to the Geek in Review podcast. If you enjoyed the show, share it with a colleague. We’d love to hear from you, so reach out to us on LinkedIn.

Greg Lambert (35:18)
And Zach will put the links on the show notes, but if the listeners want to learn more about TLTF or Reach Out, what’s the best place for them to look?

Zach (The LegalTech Fund) (35:27)
The fund and all of our company and all the fascinating companies that you need to check out and interact with is at legaltech.com and it’s kept it simple and then the event that you mentioned is at TLTFsummit.com and then we do lots of stuff on LinkedIn and YouTube and lots of other places.

Greg Lambert (35:43)
And that’s that’s in December

Zach (The LegalTech Fund) (35:46)
We’ll be making an announcement next week about it.

Greg Lambert (35:48)
All right.

Marlene Gebauer (35:49)
Terrific, terrific. And as always, the music you hear is from Jerry David DeCicca who I understand has a new album out. Is that right, Greg? All right, well, everybody go check it out.

Greg Lambert (35:57)
Yeah, just dropped a new album out, so go check it out. All right,

all right, talk to you guys later.

Marlene Gebauer (36:04)
Bye.

Zach (The LegalTech Fund) (36:04)
Thanks.