This is the second article in a two-part series. Part one introduced three legal technology entrepreneurs whose businesses have launch dates between December 2016 and December 2017. Part two discusses the market they face and their plans to succeed.
Marketing consists of determining what the market wants, developing that thing and selling it. Ottawa’s Colin Lachance, Edmonton’s Barry McMullan and Toronto’s Aaron Wenner, Canadian legal technology entrepreneurs all, are part of the target market for their products, so they’re using their industry knowledge to structure their offerings and their companies.
Technology market conditions
McMullan’s economic viewpoint ought to encourage budding legal technology entrepreneurs. “The market for this type of software is oligopolistic,” he said of his child and spousal support calculator iGuideline (now available via Apple’s App Store). “Prices are higher than they would be in a more competitive market.
“I don’t think it’s a question of whether building and maintaining this type of software is profitable. I think it is profitable, and the market will quickly inform me.”
At a 2016 event, Lachance, CEO of Maritime Law Book (now compass.law), said that many lawyers aren’t ready to invest in legal technology. “This is the year (2017) when buyers become ready,” he said. “There’s a greater comfort with technology, combined with greater tension on lawyer profitability and legal business management. When lawyers see their ability to operate squeezed, they start looking for solutions.”
“Lawyers need to contemplate their competitive advantage: their ability to think about complex problems and write about them in cogent ways,” said Wenner, CEO of document drafting assistant developer CiteRight (CiteRight.net). “The more that lawyers do repetitive manual labour that machines can do, the more open they are to disruption.”
Lawyers’ technology needs
Lachance noted two key insights that influenced Compass. “As many as 50 per cent of all lawyers in Canada don’t use (one of the major research services),” he said. “For most people who do use those services, interoperability of their tools is their primary goal. Our objective is to make our knowledge and functionality accessible through the interfaces that clients prefer.”
“Lawyers want fine control over document output,” Wenner said of his product. “They’re fussy about how things should look.” A product’s name can conjure immediate impressions. McMullan’s iGuideline ought to clue in anybody who has heard of a certain technology company; his software is Apple-only.
Naming a technology product
Wenner’s “CiteRight” may lead writers of lengthy legal documents to the right conclusion. If it doesn’t, the tag line ought to do the trick: Citeright.net: “We make legal research faster, cheaper and less awful.”
Lachance views “Maritime Law Book” as “a blessing and a curse,” and he has a long-term plan to deal with the issue. The name engenders respect and familiarity among courts and the client base. “We have users at several national firms who have always used it so they moved with us to the new platform,” he said. But he anticipates questions like “Why Maritime? Is it law of the sea?”
He concluded: “It’s not a name that will age well. We’re emphasizing the platform name, vLex Canada.” When asked whether the initials MLB might cause confusion with a certain sports league, Lachance paused. “I’d stop using the name for a pile of money,” he quipped.
Making money on legal technology
All three ventures intend to run in the black using strategies that don’t involve baseball. Compass offers subscriptions and CiteRight will do the same.
McMullan released iGuideline through the App Store as a free download. The software will then prompt for in-app purchases tailored to a buyer’s needs.
“Parents can buy from one to five calculations,” he explained, while professional users can opt for an annual subscription that allows creation of an unlimited number of files.
In a world of cloud- and Windows-based software, McMullan’s platform choice may be the most limiting. His Apple-only software product won’t sell to users of Windows PCs, which still dominate the legal market, and he isn’t considering a cloud-based solution. On the flip side, iGuideline ought to be a better fit for Apple users than the competition which, he said, offers versions for Windows only.
Identifying the target market
The target market can be as narrow as the lawyer who wants the product. It can also be much wider. Rather than recite the typical list — law firms, law schools, legal libraries, government and so forth — Wenner identified a key attribute for his ideal customer: “If you must absorb the cost of legal research, our product is good for you,” he said.
The market need not be limited to attorneys. Lachance admitted Compass is primarily geared toward lawyers and professional users, but “our objective is to break the law into pieces that consumers can assemble into what they need.” He contemplates how companies in areas like accounting and business intelligence “need some combination of facts and law that fits into something they’re doing, maybe negotiation, maybe risk analysis.”
McMullan initially developed iGuideline for himself, but “my thoughts on the market have changed. I thought that peers (lawyers, mediators, parenting coaches, accountants) would also benefit from the software. Then it finally occurred to me that there’s nothing out there currently for parents who want access to software that’s affordable.”
Eyeing the competition
Existing competition affects both a startup’s business plans and product designs. Setting competitive prices may seem obligatory for a startup entering a market with well-established incumbents, but few companies survive on low price alone.
Wenner plans to make CiteRight a better citation creation tool than similar features embedded in current research tools.
Lachance recognizes the gaps between Compass and its established competitors, as well as the need to close those gaps. Rather than acquire products for their features or build those features in-house (and incur unwanted delays and financial strain), Compass intends to integrate with existing tools.
“When we choose not to move in a given direction, we will partner and co-operate with others who are in that space,” he added. “The big players need to be in all spaces. We would rather be in an ecosystem that connects with many different sources.”
This article originally appeared on The Lawyer’s Daily website, published by LexisNexis Canada Inc.