Monday, September 13, 2010
Interview with Carey Ransom, RealPractice
For today's interview, we thought it would be worth visiting with Carey Ransom, CEO of Irvine-based RealPractice (www.realpractice.com), a firm which develops legal-based software products. We have spoken with the firm in the past, and the company recently raised some new funding and went through some reorganization, including moving the firm to Irvine. We thought it would be worth hearing about where the firm is today, as well as Carey's strategy to create something similar to LegalZoom, but for attorneys.
Thanks for the time today. Tell me how you ended up at RealPractice, and a bit about the recent funding?
Carey Ransom: I was approached with the opportunity late last year. I had known several of the investors, both at the angel and venture level, and they were interested in a fresh set of eyes, and new energy in looking where we could take this business in its next phase of growth and evolution--and, ultimately, to look for some successful exit down the road. I was interested in the opportunity, because although the firm had been around for some number of years, they had an interesting product, great customers, and the legal market is a massive market. It seemed like we had enough assets there to do something interesting with the company. So, I took the bait and decided to jump in and give it a whirl.
For those who aren't familiar with your background, can you talk about what you've done before?
Carey Ransom: I like to think of myself as a startup guy. Since I've come to California, I've done a number of early stage startup companies. Even when I was at UCLA, I got involved in a startup, which we ended up selling to Frontbridge, which obviously has since become part of Microsoft. I was an early executive at WebVisible, which we grew into well over 100 people while I was there. I like that startup to growth phase, and although I'm not an engineer, I've pretty much done everything else, from sales, marketing, to business development and product management in a company. I have always enjoyed the opportunity to figure out the biggest and best opportunities within a startup.
It looks like you've put in a completely new executive team?
Carey Ransom: Yes, it is pretty much all new folks. We found out that with the existing business, and where we wanted to go, we needed some strong functional leadership. We had a lot of legal background and depth in the company, as well, which we've kept. But, we saw the opportunity to bring that intersection of people between people who understand strong web businesses, and that interaction with the legal profession. There haven't been a lot of strong success there. I see us compared with a LegalZoom, which has done phenomenally well. They are catered more to the consumer who have a legal need, however, rather than helping attorneys or small firm. We look at ourselves as advocates for legal practitioners, who makes them more effect and more efficient in how they practice.
Describe how you do that, and what is your business about nowadays?
Carey Ransom: We see that the number one, fastest growing segment of the legal market is the small, solo firm. Big firms are shedding attorneys, and people are coming out of law school without larger firm jobs. That means lots of attorneys are having to hang out their own shingle, very early after getting out of school, and have to figure out how to make a business. They don't get that background in law school. The number one growth opportunity in the market is to reach those folks, using newer mechanisms like the web. We're using a better, and more effective means of delivery, using software-as-a-service and the cloud, as a way to get products and services to them, and also to be more cost effective. What we saw, when we came into the industry, was that most products were typically created from within the industry.
The attorneys who created those weren't always aware of the best practices outside the legal industry, and often don't have a great understanding of user interfaces or user interaction and design, in order to make things intuitive. They've often made products which were overly complex and over-engineered. There also has been a lot of point or tactical tools, but many of those tools don't talk to each other. We spent a lot of time over the last few months talking with attorneys, to understand what their portfolio of technology solutions and tools are, in their day to day, and find that they often have four disparate database with all of the same information, but one is for contacts, another for managing tasks and cases, another for billing, another one for accounting, and so forth. When a client changes their address, they have four places to change it. It doesn't make sense, and that's not what people have to do in other business industries.
That's one reason we changed our name, to reflect that as we've evolved, we're now building things the way attorneys should practice, in order to be the most efficient and most effective. With bad tools and technology, they are forced to handle at most five concurrent clients--but if you adopt best practices, you could double or triple that. That makes them more profitable, and more effective, and that allows them to afford that part time or full time staff member to take on other burdens.
Didn't the software start out as a traditional, enterprise package?
Carey Ransom: It was originally enterprise software, but in recent years--even before I came in--we made some adjustments to make it more Internet deliverable, in software-as-a-service mode. The product today on RealPractice is very much a legal content product. We have sample legal documents, practice guides, and information very deeply specific to attorneys in certain areas, such as litigation and corporate transactional law. It's all delivered over the web. We believe, given some additional tools around that content, that we've create some efficiencies. There are millions of sample employment agreements, merger agreements, and so forth, but there's not many people helping attorneys to do document assembly or do things more efficiently such as creating blueprints and templates. But, that's where the market is going.
Folks like LegalZoom have taken commoditized documents, for things which don't necessary need an attorney. But, if it starts to get complex, you need an attorney for some or part of that. That said, people don't want to pay for an unlimited number of hours. There's pressure to adopt fixed fee engagements, and at the moment that occurs, an attorney is then very sensitive to efficiency. They want to be as efficient as they can be. If they use templates and best practices, and are able to track their work, they can then track how many hours they actually spent and price things right. That makes it a profitable project, and they are now looking at a true return on their investment.
Finally, what's next for the company?
Carey Ransom: Right now, we have a big launch planned for the fall, where we have a whole new solution. We're heads down in development, and are starting to do some seeding of the market. It's a new strategy, focused on how to support solo attorneys and small firms, and make them more efficient and effective across the whole continuum of getting clients, serving those clients, running a good business. As I tell our team, our success will be gauged on success of our clients, and how successful they are on differentiating themselves on particular segments of legal practice and figuring out how to grow their practices and realizing their potential.