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Interview with Rudy DeFelice, Founder of Practice Technologies




Santa Monica-based Practice Technologies (www.practicetechnologies.com) is a company developing software for the legal profession. I spoke with Rudy DeFelice, the President and CEO of the company, and a longtime reader of the newsletter, to understand what Practice Technologies does and how the company was founded.

BK: What does Practice Technologies do, and what products do you offer?

RD: We develop software and content-based products for law firms. Our focus is on tools that enable lawyers to access and use previously-created legal documents. Most legal research and drafting could benefit from work done before, but attorneys have not had effective tools to find similar documents, either in their own firms or in public records. PTI's RealPractice software analyzes legal documents and classifies them by type and subject, automatically. This enables pinpoint search and retrieval of documents that were otherwise difficult to locate, either in a firm or in various public repositories (like courthouses and administrative agencies.) This enables lawyers to incorporate the best thinking of their colleagues, and the profession at large, into their work. PTI also developed a court-rules compliance tool called SmartRules that centralizes all code requirements with just one search. Together these products help lawyers to create new documents and use them effectively.

BK: What's the story behind Practice Technologies, and why did you decide to start the company?

RD: I practiced law for almost 10 years, and confronted the problems PTI is addressing from a user's perspective. Like most lawyers, I was interested in solving clients' problems. However, I found an inordinate amount of time was spent analyzing issues and drafting documents from scratch. Every lawyer knows that the better approach is to stand on the shoulders of prior work, and leverage that intelligently. Clients want that too. Consequently, I was moved to solve the problem. It was a way to have a big impact in a profession that I cared about. When I met John Siegler, who was a lawyer engaged in investment banking, we examined the business behind this need, and it soon became apparent how big the opportunity was. So we were highly motivated, both emotionally and financially.

BK: Having a legal background, was it tough finding the right people and resources to start developing your software? How did you get started?

RD: I think it's always tough finding the right people. My first step was to focus on people who (i) intimately understood the customers and problems I was interested and (ii) had the vision and courage to go the distance. I met many people early on, but John Siegler, mentioned previously, was the first person that fit that bill to me. John signed up as a co-founder, and we built the team together. John knew Russell McGregor, a software architect with 20 years' experience, including significant law firm experience, who joined to oversee development.

We retained Core Objects Software, Inc. a Los Angeles based developer with a branch in Bangalore, India, to assist with software development. Core Objects had a strong track record, were willing to work with us creatively in terms of finances, and had an extraordinary lead in the form of CEO Girish Venkat, a singular engineer and entrepreneur. The partnership has been extremely successful on both sides - we had the benefit of a large, talented development team early on, and Core Objects got a long term partner. Over four years later we're still working together, and PTI has become one of Core Objects' largest customers. Moreover, with our 24-hour development cycle, we're able to be unusually responsive and cost-effective.

So I think no matter what your background, you can build successful software products. The main ingredient is to thoroughly understand your customers, and care deeply about helping them. The rest is just commitment to execution.

BK: How do law firms use your product, and how do most of these firms find and decide to use your software?

RD: Our primary marketing tool so far has been word-of-mouth. Law firm technologists are a tight group; they tend to face similar problems and regularly try to help each other. PTI is addressing problems that have been well-known in the profession for many years. Since we had a deep understanding of the issues and had built innovative solutions, word spread quickly.

We recently launched a national sales and customer support group, and have developed relationships with several of the leading technology consulting firms. These efforts were to support our national presence and handle strong customer interest. Our products are either installed at the firm's site or hosted by us; that flexibility makes the solutions work for a wide range of firms with different needs.

BK: Do you find that law firms are eager to try out new technology, or do they tend to be more conservative?

RD: Like many institutions, law firms have both personalities at various times. For the first few years of PTI's existence, firms were making very little investment in technology. Over the last year or so, that changed significantly. Firms still tend to be highly deliberative and rely a great deal on what each other are doing, so in that sense, they are conservative. However, they are also quite competitive. So once some visionary firms have proven a concept, the rest of the market tends to embrace that solution. So in that sense, they are also eager to adopt innovation.

Still, there are not a lot of easy technology sales in this market. You have to demonstrate a strong understanding of how lawyers work, and offer a product that is at the same time simple to use and a dramatic improvement over current practice. Not a lot of companies get all three ingredients right.

BK: What has been the hardest part of getting Practice Technologies off the ground?

RD: For me the hardest part of this experience was the pessimism that was everywhere after the Bubble burst in March 2000. I don't relate well to pessimism or negativity, and it was a frustrating period. But I knew deep down that we were doing something important here, and that Americans don't stay pessimistic for long. We're hard-wired for innovation and progress. So I always knew, even during the darkest days, that things would turn around.

The silver-lining to this period in history is that it was one of the best times ever to build a company. Largely because no one else was. Good talent was available, and when I brought people on I could be sure that they were looking to build something of enduring value, rather than get a quick cash-out (which was the state of mind a few years earlier). Moreover, there weren't ten other companies with a bunch of VC money cluttering the space. Now we're one of the only emerging companies in our industry, and there's a ton of runway. It was largely a question of staying on the pier long enough for our ship to come in.

I never expected this experience to be easy. That wasn't what I was looking for. My advice to other entrepreneurs is that if you're not inspired by the hard times, you better do something else. So in response to your question I'd say that surviving the hardest part is what makes you, in the end, a company of character and commitment.

BK: Thanks!


 

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