“Two hammers looking for a nail” secure $2 billion, a timeline of Clio
A deep dive into Metro Vancouver’s latest unicorn.
The road to Unicorn Country is long and winding. There are jaw-dropping peaks and sweeping valleys. Sections where you could be in cruise control are paired with many white-knuckle S curves. For those that reach the destination, though, a moment of reflection and a reminder of where they’ve come is called for. For Clio, who surpassed $2 billion in valuation early Tuesday morning, we thought it necessary to play back the dashcam footage from over a decade of growth.
“Two hammers looking for a nail”
It almost seems like a disservice to co-founders Jack Newton and Rian Gauvreau to start this in 2007. Like every entrepreneurial journey, I’m sure that the basis for Clio correlates to the first memories of their founders. Every moment of life impacts the inertia of something you build from the ground up.
But, in the name of efficiency, we start in 2007 where the foundation of Clio was poured. To belabour the use of metaphors even further, here is how Jack described the era to Legal Tech Founder:
To do Clio was, like many startup stories, filled with a lot of serendipity. I’d describe myself and Rian circa 2007, when we came up with the idea for Clio, as being two hammers looking for a nail. We saw this huge technology wave that was coming, which was cloud computing. Salesforce was just starting to take off, and we saw that it was this once in a lifetime opportunity to capitalize on this tech launch, technological transformation wave that will be disruptive in an industry.
“What I can only describe as an act of God”
By 2008, Jack and Rian were ready to ride that wave. They started building the technological basis of what would become Clio and navigating the bureaucratic hurdles of entering the legaltech space, which is outlined in this 2019 piece.
But the bigger hurdle was gaining initial funding. That was, until they received some divine intervention. Here’s how Jack puts it:
In what I can only describe as an act of God, Rian while he’s on hold with some vendor and just bored out of his mind, wonders ‘I wonder what’s in my spam box,’ which I don’t think he’s ever, ever asked or done since, and just stumbles across this email from Christoph, and forwards it to me and says this, ‘this looks legit.’ I follow up with Christoph and we jump on a call and, he said, ‘look, I just became an angel investor. I just finished my first investment, which was in a small little company out of Copenhagen called Zendesk, by the way,’–so he invested in Zendesk when it was four guys in a bar in Copenhagen, obviously now a wild success story–and his second investment was in Clio and he ended up leading our million dollar Series A, and that got us to our $6 million, Series B, and that got us to our [$20 million] Series C, which was led by Bessemer Venture Partners, which is one of the most highly regarded venture firms in the US. And you know, we finally made it. We got through that funding gauntlet, but it was a struggle.
Christoph Janz @chrija🤣🤣🤣 https://t.co/c8BHxghQVO
“It just felt like the future”
This is how Clio’s first customer, Catherine Merino Reisman, described the software. Reisman first heard of Clio from Bob Ambrogi, a Massachusetts-based lawyer turned journalist. A Clio blog post catches up with her a decade later. After the recommendation from Ambrogi, Reisman was hooked.
The idea of being a beta tester for the software intrigued her, and the rest is history.
“An important moment”
By now, Clio is one year into providing solutions for their clients. The roles were reversed for one North Carolina client.
An important moment for Clio and cloud-based practice management software was a 2010 North Carolina State Bar decision to issue a positive ethics opinion on the acceptability of cloud computing. The NC State Bar was the first state bar to do so. ‘It was prompted in 2009 by a Clio customer who requested guidance if using a system like Clio was ethically acceptable,’ according to Newton.
“That’s exactly what a great company blog should do, and what makes it CLawBie-worthy”
With all due respect to The Oscars, 2010’s most exciting award was a ClawBie. Canadian Lawyer Magazine bestowed the honour upon Clio in the “Best Legal Technology Blog” category. At the time, it was still penned by Newton and published a survey on the use of Macs in Law Firms, wrote on lawyer usage of mobile devices, and addressed methods to increase website speed.
Upon learning of this award, you can’t help but respect the approachability of Newton and co. This seems to be an ethos of Clio from the start. The ultra-relatable spam folder story. A willingness to follow up with a first client. A company blog applauded for working to understand the landscape of their customers.
It seems this approach is paying off for Clio. Not only have they built a robust client base of active law firms, they are working with the next generation. A Texas Tech report highlights a series of law schools, most notably Columbia, as users of Clio. At the time, Newton said:
Law students are keen on getting exposure to practice management software during the course of their education, as they are increasingly aware that practice management is a skill they need the day they graduate. Because Clio is cloud-based, deploying it in the classroom is much easier than it was with traditional desktop-based systems: teachers can get their students up-and-running on Clio in minutes without needing to ask for support from IT. By making it easy to use a real-world practice management system in a classroom environment, we're hoping more law students will be able to graduate with the knowledge of how to run an efficient and error-free law practice.
“A reminder to all looking to build that hustle, relationships, and client service matter”
Jack Newton @jack_newtonThrilled to announce @goclio’s $110M Series E funding round, led by T. Rowe Price and OMERS, at a $1.6B valuation. This is a huge milestone in our journey toward building an enduring company that is transforming the legal experience for all. https://t.co/UUJzaFBbJB
Apparently, even three years into building Clio, becoming a client meant personal time with the founder.
“The legal sector was ripe for disruption”
2011 was also the year Clio received financial backing from Acton.
The two founders realized this was a massive opportunity and began looking to raise venture capital. ‘We don’t invest if founders are already thinking about an exit while making their pitch,’ Acton’s Christoph Braun states. ‘We invest in entrepreneurs like Jack and Rian who want to be on board for the long haul and have a real vision for their company.’
"There was nobody that was embracing the kind of web based delivery model for [legal sector] software”
2012 brought more capital Clio’s way. In the immortal words of our editor, “[Remember when the Vancouver Sun did regular tech coverage?!]”In the Sun’s piece, Boris Wertz echoed the sentiment that "disruption" was due.
’In a time where technology really drives productivity and efficiency, the small guys just never have the internal resources to build technology that can help them achieve those goals,’ Wertz said.
“A tremendous year of growth”
Clio celebrated their 5th birthday in style:
“The company’s service is used by legal professionals in 50 countries”
“Their passion and determination makes them all inspiring success stories. They are vital to the Canadian technology sector”
This is what Robert Nardi, Technology, Media and Telecommunications Managing Partner for Deloitte, had to say about the league Clio was in. Clio was named the 20th Fastest Growing Company in Canada by the consulting firm.
“In typical Clio fashion, we took the bar we set ourselves in previous years and soared over it”
As the company neared double digits, Clio leaned into the solid foundation that had been laid. But, it appeared that a solid foundation allowed for renovations and expansions. Software updates and a growing Clio Cloud Conference combined with an inaugural “Legal Trends Report” and a tongue-in-cheek minting of “Clio LLP.”
“That’s unheard of in this community”
According to Clio, 2017 was their “Biggest and Best Year Yet.” Customer Jordan Couch of Palace Law would likely agree.
I know one of Clio’s values is ‘Customer success comes first,’ and this is a huge example of that. Clio is not just saying ‘You have to use our tool for everything you do.’ They’re saying ‘No, we want you to have the flexibility to use other tools, and we’ll even invest in those tools, because we think it’s important to have them.
“Lawyers do more than just practice Law”
“Cloud Practice Management Software Grows Up”
You could see this sentiment--the title of a piece in Above the Law—across various facets of Clio in 2018, the year they celebrated a 10th birthday. It reads as a perfect encapsulation of Clio at the time. The software was still at the forefront. But the period of reflection upon reaching double digits of a company shines through.
The Clio blog was still firing on all cylinders but took an introspective turn with a series of pieces:
“We thought it would take some time to ramp up hiring from 10% to 35% women, but in reality, it happened immediately”
2018 was also an important year for the continual work towards diversity, equity and inclusion (DEI) as Clio sought to move the needle on their own DEI structures. Ainsley Robertson, Manager, Developer Experience, penned a deep dive into this process in a piece entitled: How we doubled the representation of women in Engineering at Clio:
We decided to aim for our total engineering team composition to include 25% women by the end of the year. We chose 25% because it felt doable, but hard: an ambitious goal that we might be able to come close to.
We reached our goal of 25% women on Dec 16, 2018, five months after rolling out the quota formally. Today, 27% of our 104 folks in engineering are women.
“One of the largest in legal technology and the largest in Canadian history”
Another series of funding came Clio’s way in 2019. In a Series D round, the company received a whopping $250 million. As evidenced by the chart below, this blew the previous round out of the water.
“In the midst of the turmoil that was 2020, some remarkable things happened”
The 2011 sentiment—that the legal sector was “ripe for disruption”—received its largest test last year. Legal tech was always a worthwhile pursuit, but the value provided in 2020 was unmatched.
“A historic moment for legaltech”
Which moments stood out? What did we miss? Which company would you like to see a timeline of next? Join the conversation on Twitter.
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