Almost nine years ago Lachlan McKnight was a corporate lawyer with an interest in SaaS (service as a software) who saw a lack of innovation in the traditional legal services space. Starting with the idea of “what can we do differently to traditional law firms?” he has now growth LegalVision has grown to a global business worth $29 million. Yahoo Finance caught up with co-founder and CEO Lachlan McKnight to hear how it happened.
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What gave you the idea for your business?
About eight years ago I was a corporate lawyer and a friend of mine was a developer. We got talking about the legal services space and the fact that at the time there wasn’t much innovation and it was a very traditional industry. At the time all of these SaaS businesses were doing really different things in the tech space and we thought there was an opportunity for us to build a similar business in legal services.
Particularly a business that uses system process structures technology to deliver work, one that uses online digital marketing to acquire customers, and then one that delivers a product to customers, which is really much more user friendly with high quality work done quickly and efficiently at a significantly lower cost to a traditional law firm - the whole package.
We thought that because law firms are so traditional, it would take a long time for anyone to replicate or compete with us.
The business has evolved a lot since we got it up and running but the starting point is still: What can we do differently to traditional law firms? what are our customers really asking for? And let's try and deliver that with as much technology as possible.
Who is your target audience?
Small to medium businesses and mid-market style businesses. Our target isn't micro businesses but businesses which have started automated with the ambitions to become a reasonably sized business or existing businesses with employees. We also service a lot of startups or tech startups that are raising capital and are growing quickly. And they're also really good customers for a subscription service.
What have been some of the biggest milestones in your business?
The first milestones is the very first sale right? I still remember that. Because that's the first evidence that there would be someone who's interested in buying what you're selling. But over the last couple of years, I'd say the biggest milestone has been a shift to a primarily almost pure subscription-based business and that is really, really different to the way a traditional law firm works and the sheer uptake in customers. Over the last couple of years we've really scaled up a lot quicker than in the past. The lesson is that when you start out, it can take a while to build out your business, get to real product, product market fit, but once you get there, you can really scale quite quickly if you've got a scalable business model.
What have been some of the biggest lessons faced in business?
When we started out we had a real focus on fixed fee legal work and we were really successful with that. So shifting to the subscription model was a risk for us, and it could’ve gone either way. We had a successful business without the subscription model. It could have failed—and it didn’t—but it’s a lesson in that even if something is going well, always be trying to find the next stage or the next evolution of your business, otherwise you can end up growing but not growing as quickly as you could not doing all that you put in your business.
The key thing for us has always been to listen to the customers above all. So we’re constantly surveying customers, asking them what they want, what additional features they want and what else we can do for them. That has been another big lesson - to be constantly talking to customers when building a product. Make sure that you're getting that input before you build things.
What’s something key you’ve learnt in business?
One of them is when you talk to any lawyer about our subscription offering, an all-you-can-eat business as usual offering so many lawyers are say there's no way it can make money, that it's just impossible.
Our subscription product is profitable and it's great for both our customers and brands; but if we had listened to the traditional legal industry we would never have done it. Go with what you think is right, rather than listening to the people who are currently running businesses in the space. If you really want to build something new then you've got to back yourself and your ideas.
Tell us your best piece of advice to an entrepreneur
Don't delay. There’s only so much preparation you can do, there’s only so much getting organised before you quit your job and do it. The best thing that you can do to be successful is to actually start. Quit your job, start your business, put everything into it and don't worry about too much about the consequences.
Most entrepreneurs fail at the starting point by not actually taking the plunge. There's so many people who wish they'd started businesses that haven’t. So that'd be the number one tip is to do it, you’re already 50 per cent more likely to succeed than your cohort.
Talking about the risk starting in business and quitting your job, if your business fails, I think you are much more employable than someone who has not taken the leap. It's also a great thing to have that on your CV down the track if you do want to go back to paid employment. People worry too much about the risk.