Two legal industry veterans are today launching a company that they believe will change the paradigm for how law firms and legal departments purchase technology — and thereby turbocharge the adoption and use of innovative technologies throughout law practice and operations.
The company, LexFusion, will serve as the go-to-market representative of a collective of legal technology companies that it has thoroughly vetted and selected as best-in-breed in each company’s category. LexFusion will represent only one company per category, so that all the companies are complementary, not competitive.
On behalf of these companies, LexFusion will seek periodic meetings with corporate counsel and law firms to discuss the state of the legal innovation market and help them understand the products available to help them cut costs and increase profitability.
The overarching goal is to offer buyers an alternative to the endless stream of cold calls and emails they receive and help them focus on core products that have been vetted by LexFusion and tested in the industry.
LexFusion’s cofounders, Joe Borstein and Paul Stroka, are legal industry veterans who are well known within the industry and who have direct experience with many of these products. Both are former attorneys who worked together at Thomson Reuters Legal Managed Services (the former Pangea3), where Borstein was global director and Stroka was director of legal solutions. Both also went to Ernst & Young after it acquired the Pangea3 business last year.
Their reputation, credibility and relationships within the industry are part of the capital they are bringing to this company, believing it will form the basis of a trusted relationship with buyers that will lead to what Borstein describes as a “regular cadence” of meetings where they discuss with buyers the challenges they face and the solutions available to address them.
They are launching with a participating group of seven companies, each from a distinct and non-competitive segment of the legal technology market:
- Agiloft, for contract lifecycle management.
- Factor, for managed services.
- HaystackID, for electronic discovery services and technology.
- Intelliteach, for outsourced IT and financial services.
- Litera, for legal workflow and workspace technology.
- Ping, for timekeeping automation.
- Priori Legal, for hiring project-based outside counsel.
In addition, LexFusion has brought on Sanjay Kamlani as founding member of its advisory board. Kamlani is the cofounder and managing director of the 1991 Group who was formerly cofounder and co-CEO of Pangea3 and, before that, CFO and general counsel of pioneering outsourcing company Office Tiger.
“It’s a first-of-its-kind idea in terms of presenting a portfolio of legal tech businesses that is curated,” Kamlani told me earlier this week. “Joe and Paul have picked companies they think are great and that all complement each other. They can explain to a firm how they can address any of their needs.”
Exclusive LawNext Interview
In an exclusive LawNext interview with Borstein and Basha Rubin, CEO of Priori Legal, recorded in advance of today’s announcement, we discussed the company and its mission.
“Think of LexFusion as a collective of best-in-class legal innovation companies representing most – and hopefully, at some point, all – of the mature, ready-for-action solutions for corporate counsel and law firms,” Borstein said.
If you think of these companies as arrayed around a circle, Borstein said, LexFusion is an engine in the middle that is uniting these services and technologies as a collective, of a sort.
“We are going to be able to walk into corporate counsel and law firms and say, ‘We represent the best of what’s out there in virtually every category that you need. Let’s talk through where you are now in your lifecycle, your maturity, and think about things you need to get to that next step, and think about pre-vetted, excellent solutions that you can move forward with tomorrow,’” Borstein said.
In the LawNext episode, I asked Rubin why she wanted to be involved in this venture. A major reason, she said, was her respect for Borstein’s and Stroka’s knowledge of the legal innovation market and landscape.
“They’ve been involved in legal innovation for a decade, and really took the time to understand the overall landscape of the different kinds of technologies that Fortune 500 and Am Law 200 firms are purchasing,” Rubin said.
She also said that Borstein and Stroka truly did their due diligence in evaluating and choosing the companies to participate, reviewing them in detail and developing a deep understanding of their value propositions.
“So I felt like the opportunity to both work with Paul and Joe and be part of a consortium of other technology companies who were pushing innovation forward was too good of an opportunity to pass up,” Rubin said.
Broken Buying Process
In a separate interview, I spoke with Varun Mehta, CEO of Factor, another of the participating companies, who said that he believes the buying process in legal has long been broken and that LexFusion offers an opportunity to fix it.
“What LexFusion is doing really well is building a trusted community – a trusted community where it is bringing together a network of folks in the legal community that truly are interested in how things can be done better, in a process that feels more natural to how lawyers are used to buying things,” Mehta said.
Because GC and law firm partners are busy and inundated with pitches, it is difficult for them to separate the wheat from the chaff in legal technology, Mehta said. That is why they continue to rely heavily on advice and suggestions from people they trust. LexFusion is an opportunity to have those kinds of conversations built around foundations of trust, he believes.
“I see this as bigger than a business development engine,” Mehta said. “I see it as an opportunity to create a truly defined network of people who want to change things in legal.”
I spoke also with Seelin Naidoo, CEO of Intelliteach, who told me that he is participating, in part, because he believes LexFusion’s approach will be successful in bringing the companies it represents to the attention of buyers.
“We have a tremendous solution set,” Naidoo said. “We have a lead position in the market for every solution we have. So we have the recipe, but our biggest challenge is gaining access to the right place with the right people. When we can get in front of the right people, our solutions sell themselves.”
Ninety percent of Intelliteach’s revenue is from Am Law 200 firms, Naidoo said, but because of COVID-19, many firms are struggling to find the time to talk with outside vendors. Many are also reluctant to implement major changes in their technology and services until the outcome of the pandemic is better known.
He was impressed, he said, that Borstein and Stroka invested a lot of time in learning about his company and vetting it in the marketplace. “They’ve taken the time to understand how we position our solutions.”
A Watershed Time
I asked Borstein whether this model of representing a hand-picked collective of companies could have the effect of stifling competition, particularly from fledgling startups trying to gain footholds in the marketplace.
He believes the opposite is true, that his model will foster development of the best and most-innovative ideas. He said he will continue to listen to his customers and watch the market and continually assess whether to bring on other companies as part of LexFusion.
Rubin of Priory Legal agreed. “The pie is getting bigger. This creates a rising tide for all of us in the innovation community and at legal departments and at law firms. …
“I think it’s a really exciting time – a watershed really – in innovation becoming central to the practice of law rather than an afterthought.”