Brian Liu is the co-founder and founding CEO of LegalZoom which is a technology platform giving access to professional legal advice. The company has a $2B+ valuation today with over 1,000 employees. Brian is currently the co-founder and CEO of BizCounsel. Modeled as a Saas service, for a $69 monthly fee, BizCounsel members can get legal advice from its network of business attorneys, without paying by the hour as it is typically structured with lawyers.
In this episode you will learn:
- How to build trust in your company with guarantees and celebrity board members
- Why the days of $500 an hour attorneys and $5,000 retainers may be over
- How to reduce your startup’s legal costs by 50% to 70%
- The magic words to say to save big on attorney fees
- How machine learning and new subscription models can help
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE
About Brian Liu:
Brian Liu is the CEO and Founder of BizCounsel, a revolutionary platform that is modernizing the relationship between small business attorney and their clients.
In 1999, Brian conceived the idea for LegalZoom. With only $1M in total invested capital, Brian and his co-founders launched LegalZoom and built the company into the most recognized legal brand in the US.
Brian served as CEO from launch until 2007, and Chairman from 2007 until 2018.
In addition, Brian currently serves as the Manager of DRC Capital, a real estate investment fund with over $35 million in assets.
Before starting LegalZoom, Brian was a corporate attorney with Sullivan & Cromwell, a prominent Wall Street law firm, and Vice President – Legal at Oaktree Capital Management.
Brian received his law degree from UCLA and graduated from UC Berkeley, Phi Beta Kappa and with honors, in Biochemistry.
Brian was a semi-finalist for the EY Entrepreneur of the Year for Southern California and is an active angel investor in the Los Angeles start-up community.
Connect with Brian Liu:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. Today we’re going to be learning a lot about legal, a lot about legal take, and then also a lot about building, scaling, and financing companies with our guest. So, without further ado, Brian Liu, welcome to the show today.
Brian Liu: Thank you, Alejandro. Thank you for having me on.
Alejandro: So, originally from Taiwan, you were five years old when you moved with your parents to the U.S. So, you guys were going after the American dream.
Brian Liu: That’s correct. We came here on a boat. My parents decided to uproot the whole family. We didn’t know what was happening. One day I was in Taiwan. I was happy in preschool, and the next thing you know, I was in the U.S. I didn’t know anything of what was going on at the time.
Alejandro: Really cool. What got you into law?
Brian Liu: I was, like a lot of people, kind of confused as to what I was going to do with my life after college. I was just trying to pursue my education and prolong the choice of making a decision for as long as possible. So, I went to law school because I figured, “Hey. With a degree in law, I could end up doing anything. I can go into business. I could be a lawyer,” but I had a lot of opportunities, and I didn’t have to make a lot of decisions. Less procrastination.
Alejandro: Got it. Really interesting. Then you graduated, and you went into Sullivan & Cromwell which funny enough is the same firm that Peter Thiel worked for. Then also, I believe, is the wife of George Clooney.
Brian Liu: Right. I saw that just the other day. I couldn’t believe that we were at Sullivan & Cromwell.
Alejandro: Small world.
Brian Liu: Yes.
Alejandro: So, you were doing their IPOs and M&A type of work?
Brian Liu: Absolutely. I was working there, and I remember specifically one day coming back after a meeting in San Jose at Wilson Sonsini’s office working on a big IPO. I was thinking, “I’m miserable.” Alejandro, I’m hating this job. I remember driving in my car on the way back from the airport, and I’m like, “I hate this car because I’m working this job that I hate just so I can have this car?” I thought, “This is not what I went to law school for.”
Alejandro: Right. I can relate a little bit to that because look, I was pushing paper behind a desk as well as an attorney in New York City and crazy hours.
Brian Liu: Yeah.
Alejandro: So, most definitely. When you had that moment in the car, what happened then?
Brian Liu: You know, I felt so disconnected. When you’re working with some of these really giant multi-billion-dollar companies. It seems prestigious, but I really enjoyed working with smaller clients, and I loved working with the smallest client at our firm and the friends and family who would come and ask for help. So, we looked at that time what was happening. This was 1999, everything that was happening on the internet. Everything was being taken online being automated from online tax returns to travel to stock trading. We thought, “Why can’t we do this for law?” So, we came up with this idea for LegalZoom. Low and behold, 18 years later, it’s still around. It’s now the #1. I think it’s got 75% name recognition in the U.S. right now.
Alejandro: Got it. What was the founding theme of LegalZoom? So, you were pointing to, you were starting to see that everything was being brought online, but all of the sudden, you started incubating this idea. Who were the people that you were discussing with and what was that process from being a lawyer to finally being an entrepreneur because that is a very complicated transition right there?
Brian Liu: Yeah, it is a very difficult transition. The good thing is that even when I went to law school, I didn’t think I was going to be a lawyer forever. One of my best friends now, today, my co-founder Brian Lee was somebody I met the first day in law school. I think the reason we got along so well was because we looked at each other and we said, “What are you doing here in law school? You don’t seem like you’re the type who’s going to be here.” He said the same thing about me. So, we were great friends, and we ended up starting LegalZoom together. When we went out to try to raise money, I’ll tell you; it was difficult because every finance person looked at us and said, “You guys are lawyers. What do you know about running a business?” So, our very first meeting with a venture capital person was – I remember. The day the NASDAQ crashed, April 14th, 2000. It was a family friend. We knocked on his door after – I think it was probably about 4:00 or 5:00 pm, and he looked at us at the office, and he said, “Brian, what are you doing here?” I called him uncle at that time. “Uncle Denny, we made this meeting. We’ve had this set up for almost a month.” I had a whole deck. I’d been practicing. I had everything ready. He looked at me and said, “You know, Brian, it’s over. Don’t you understand? It’s over.”
Brian Liu: So, Brian Lee and I looked at each other and said, “Now what?” We could still beg and get our jobs back because we had given notice already, but we could probably get our jobs back and go back to the law firm. We did what any sensible startup entrepreneurs would do. We went to Benihana’s, which is right across the street. We had some beer and said, “Well, what should we do?”
Alejandro: That’s amazing.
Brian Liu: We decided right there that we were going to continue pursuing this because we believed in the cause; not just the business. We didn’t just believe in the hype and the story. We knew that there was a real business that people would pay money for. Based on our experiences, based on all the friends and family and everybody else who came to us looking for the exact same things that we were going to offer online at LegalZoom. So, we knew that there was demand and a real business; something that people would pay money for. That’s what got us through, honestly, for the first few years because we launched at maybe the worst time possible for any business at that time for an internet company. It was almost like saying that I’m starting a real estate company in the year 2008.
Alejandro: And given the fact here, Brian that the two of you were lawyers – I mean, you had the legal background. Did you find some challenges with the fact that you guys were not engineers or product people?
Brian Liu: Because it was a legal product, we thought we understood it. We understood what the clients were looking for. The hardest part, as I said, was that we didn’t understand technology, but very fortunate for us we met a technologist. He was able to essentially program our whole site and really give us help and direction on that side.
Alejandro: Then, what did the prototype look like?
Brian Liu: I still have the original sketches – not just the sketches, but the wireframes for the company. It’s still hung up on my wall. The style has changed. Of course, the design has changed. The colors have not change, though. It’s still, obviously, as 18 years later it’s a little different, but the core of what the company is, we had it figured out at that time. In fact, I just went back and looked at our original business plan in March of 2000. That was when it was written, the iteration at that time. I can’t believe how much of what we said was going to happen actually came true.
Alejandro: So, when you guys gave your notice at the firms, did you already have a clear idea of the business plan, or did you just give your notice and figure out later?
Brian Liu: We had a business plan already when we gave notice. One of the reasons we were able to get the confidence to give notice was because we had recruited Robert Shapiro to be onboard at that time. I think without him it would have been tough for us as two young lawyers and one technologist. We were giving up our jobs. We were giving up everything that we worked for. The good thing was we were young, and we could always ask for those jobs back. I think it would have been a lot harder if we would have waited even a month so that after the stock market crashed when we realized we would never raise a lot of money; it would have been tougher. So, we were lucky that we made the decision probably two weeks before everything crashed.
Alejandro: Got it. So then, let’s fast-forward here. You were having a drink after that little event with Uncle Denny; I think you mentioned.
Brian Liu: Yes.
Alejandro: Basically, what happened is that you and Brian decide that you guys are going to keep going. What were some of those early days like, and what were some of the challenges that you were encountering?
Brian Liu: Oh! The challenges were staggering. Number one, no money. We were living on our savings. We were working out of his apartment. What we did manage to do was we got a lot of first-year law students at UCLA that first summer to work for us for free. They didn’t know that the stock market collapsed, so we promised them stock options. They worked for them because they didn’t have any other jobs anyway. So, we had five interns, essentially doing work for us. We went and decided to build the site and code it ourselves. We pretty much did everything from scratch.
Alejandro: I was just going to ask, Brian, doing everything from scratch, I know that it took you guys a bit to raise the Series A. Then what was the experience like because it seems like you guys bootstrapped the business for the most part. Is that right?
Brian Liu: We did. It got to the point where we raised a total of $333,500 in our Series A. The $500 was a funny story because we were so desperate. Alejandro, we were so desperate. Prior to the time of launch, everybody had promised, “Oh, yeah. $20,000, $30,000.” It seemed like everybody was more than happy to want to contribute money. But then, of course, the stock market crashes; everybody’s like, “Ah, I can’t afford it.” We were so desperate that the person who originally wanted to put in $15,000, $20,000 said, “All I can afford is $500.” I said, “Done! I’ll take it.”
Alejandro: Wow! That’s unbelievable. So, what do you think was happening there? For example, the people that you were putting the product in front of them? Why were they not biting and saying, “Hey, I love this thing. Count me in. Let’s do this transaction.” Here’s the offer.
Brian Liu: I think there’s always going to be a lot of hesitation with anybody who hasn’t had a lot of business experience, and I didn’t. I was not a business person. I was a lawyer and attorney at the time. I’d been business-like. I’ve had little side jobs that we’ve done since high school, but nobody would say that “Oh, yes. This was going to be the next billion-dollar idea at the time.” And they didn’t understand law. That was the other problem. They didn’t understand the legal industry. I think Warren Buffett always says, “Invest in something that you know.” Law is not something that most people know and can understand.
Alejandro: Absolutely. From the concept itself and the idea, you were talking about having the business plan already and how you guys were going to tackle the market. What was essentially the business model, the idea that you guys really set on and how you guys were anticipating to make money?
Brian Liu: Our business model was simple. We were going to create legal documents and charge people for it. Believe it or not, it was kind of, actually revolutionary at the time because the paradigm was to give out services for free and hope that you get tons and tons and hundreds of thousands, millions of users and eventually monetize them. Because we had to bootstrap everything from the start, we needed money and cash flow from the very start. For example, a Last Will and Testament, we charged $59 for it. Incorporation services was $100 plus filing fees. We would do those things not as a lawyer but essentially as an online automated service. Then we’d do the administrative filings, and make money off the services.
Alejandro: Really interesting. One of the things that I always hear is that there are two things where you don’t want to cut corners. One is in lawyers, and one is in doctors. Look, I’m a lawyer as well. I also do agree that there’s a lot of disruption that needs to be made in law because they charge you like for breathing. You know, just for the hours and grabbing a template and changing a couple of things. They’re like $900 an hour. It’s insane, especially in New York City. Did you guys encounter a skepticism of “No, you need a lawyer to do this, and you can’t automate this thing. What were some of the reactions?
Brian Liu: Absolutely. Of course, the legal community and certain lawyers would always say that trying to make a will on your own is like having open-heart surgery. They would exaggerate a little bit, I think. To me, it was more like, “No.” Let’s say you’ve got a cough, and you go and buy cough medicine at the CVS pharmacy. That’s more what it was like because there are so many different levels as you know. Our philosophy had always been if you’re starting up a business on your own, and you’ve only got a limited amount of cash to make this business work, you don’t want to spend as much as possible on actually growing your business. Just the process of filing an LLC is pretty straight forward. It’s an administrative filing for a state. It doesn’t take a lot of true legal knowledge and specialization to get that done. It’s tedious, but it’s not legally difficult. Now, there are obviously different situations, and there can be complications, but for the most part, what most people are looking for is something very plain vanilla. You can always amend. You can always change things in the future, but just getting that business set up correctly at the very beginning, it’s pretty hard to mess it up.
Alejandro: So, you were getting this skepticism from lawyers. I wonder as well from customers. One of the other issues perhaps was that you were actually educating them on what value you could bring to them because Legal Tech, again, is kind of like an industry hasn’t been legally disrupted for the most part. So, what were some of the strategies that you guys used in order to kickstart growth and onboard those customers then?
Brian Liu: We knew that what was really important is that people needed to trust us. So, they needed to trust the company. They needed to trust the people behind it, which is why Robert Shapira was really important. Brian and I went to UCLA. We worked with good law firms. I was at Sullivan & Cromwell. He was at Skadden Arps. Those people didn’t know those firms. So, we had to go out and build an advisory board of other famous lawyers and judges. We had to go out and almost do like a Pepsi Challenge if you can remember that where professors would look at the LegalZoom documents and something drafted by a lawyer. They would go and say, “Well, what’s the difference between the two?” You said, “I can’t tell. They’re the same to me.” I’ll tell you one funny story. Our incorporation, some of the templates. I think you’ll find that there was some similarity to maybe the templates that might have been created at large law firms let’s just say because these templates are pretty straight forward. The documents are pretty straight forward, and they were – I’d say I borrowed some of them from our law firm.
Alejandro: 100%. Also, for the people that are listening, Robert Shapiro – you’ve been talking about Robert Shapiro, part of the founding team as well. He was in the Dream Team that was defending O.J. Simpson. Obviously, here is one of the most popular lawyers in the U.S., especially during this time. Would you say that really helped you guys to kickstart building that trust that you’re talking about with customers?
Brian Liu: Absolutely. It was really important because people recognized who he was, and they understood that he was a litigator. He worked on criminal cases, but they knew him to be a good attorney. That built trust in the documents, whatever we had, would work. The other thing we came up with was this idea of a $50,000-piece-of-mind guarantee, which was a great guarantee, I think. Let’s just say for an LLC document. We guaranteed that if for whatever reason that your LLC failed you, or it was deemed not to be done like set up properly, we would give you $50,000 back. That was our guarantee. Nobody’s taken up on that. It’s never happened. We’ve never had to pay that guarantee out.
Alejandro: Talking about guarantees and potential negative outcomes, were you guys worried like, “We’re disrupting something here legal” and perhaps worried about getting lawsuits or stuff like that?
Brian Liu: We definitely had our fair share of run-ins with the state bar associations. There were a decent number of fights with various states, but we’ve worked through all of them. When it came down to actually a fight, we’ve won them all.
Alejandro: Very nice.
Brian Liu: The reason is what we were doing, it’s true. It might be seen as disruptive by some lawyers, but the truth is LegalZoom wasn’t practicing law illegally. The most important thing is that there was a huge benefit to the consumer, small business owners, and to families. It was just an overwhelming benefit. The lawyers weren’t doing this work anyway. That’s the other thing, Alejandro. You’re a lawyer. Most lawyers, it didn’t make sense for them to pick up a pencil unless you’ve got like a $5,000 retainer. They’re not going to draft a simple will for $50. It’s just not going to happen. They’re not even going to do a simple incorporation for $100, $150. They’re going to want thousands of dollars. So, these people were – they didn’t want to use a lawyer. The amount of people who were doing things without a lawyer back then was huge. I don’t think it’s changed. We were addressing a different market. Not people who were using lawyers, but people who weren’t.
Alejandro: Makes total sense. Obviously, you were talking about you guys were bootstrapping. We know in entrepreneurship there’s no such thing as a straight line. You have the ups and downs, but the fact that you guys had the additional challenge of having to finance this, and God knows credit cards or whatever that was to get the money to finance the operation. I’m sure the dark days were very dark. So, what were some of those dark moments that you have to encounter?
Brian Liu: Eating Top Ramen for five straight days. That’s pretty tough with Domino’s Pizzas. Domino Pizza was our treat at the end of the week.
Alejandro: So, obviously, a tough one. Look. I’ve been there. You go from having your lawyer’s salary, eating in really nice restaurants, having your own secretary bring you water to all of a sudden, you’re dealing with you having to do everything and eating Domino and Ramen as you were saying, which is really tough.
Brian Liu: Yeah.
Alejandro: Is there like one moment where you thought, “I think this is going to go down the toilet,” and it was a very dark period? I’d like to hear what was the breakthrough moment out of that breakdown?
Brian Liu: I think our darkest moment – remember, we didn’t start at a great time, but the darkest moment has to be September 11, 2001, because that was pretty much about a year-and-a-half in. Talk about dark! We were just starting; we were getting going. It seemed like things were on the up-and-up, and then it felt like the whole world was going to end. We didn’t know. Nobody knew what was going to happen. The business world stopped for an entire week. Nobody could do anything. We didn’t know what was going to happen. That was really dark. It was confusing. Nobody knew what was going on, and there was no way to predict the future from that time.
Alejandro: What was this causing for you guys? Was it that customers were not showing up as they used to? What was the challenge or the impact at this time for the business?
Brian Liu: The actual impact – when all was said and done at the end, we took some charitable steps to offer services for free. That’s one thing we did. We came up with a game plan for how we were going to reintegrate and help rebuild. We took some of those offered discounts to help people rebuild, free services for people who were affected. Really at that time, it was another time when we had to hunker down and say, “This is going to be a lot tougher than we thought.” It was going to be at the start. When we started, Alejandro, the reason we quit our jobs was because we thought it was going to be easy to raise millions of dollars at the very beginning, at that time in the early 2000s. I had friends who raised 5 million dollars here off all sorts of different crazy business ideas. We thought with a legal business with Robert Shapiro we were sure it was going to be easy for us. We had already talked to these advertising agencies, and they were trying to convince us to do full-page ads in the Wall Street Journal and spend 200 Grand doing it, and saying, “That’s the way you launch.” “Yeah, that’s right. That’s right.” Just to have setback after setback. You talked about the other challenges and other tough things we had to face. The Top Ramen was okay. What was tough was going back and visiting your friends and family, especially family. Every single-family dinner when I went back up to Seattle turned into a pitch dinner. I asked my dad to invite his friends for dinner, and they turned into pitch sessions. I felt bad because I had to put them in that situation. But they were so nice. They were so loyal, and they really helped me out.
Alejandro: What was the turning point for you guys, Brian?
Brian Liu: The turning point was one Friday afternoon about 6:00. I was going to dinner, and at that time, right before we left the office or even remotely from home, we could take a look at how many orders we were getting. All the sudden, this one Friday night, we started getting these orders. It was like a couple would come in, a few more, a few more, a few more. By the time the night was over, there were like ten orders on a Friday night. This was still early. We’re like, “If people are essentially ordering legal documents on a Friday night, we’re onto something. We are definitely onto something because this is so important for them that they’re not doing this on a weekend, they’re not doing it during daytime. This is a Friday night. So, that’s when we knew there was something to it.
Alejandro: Tell us about how you ended up capitalizing the business because I see that right now, you guys have raised about 800-something million for the business. That, obviously, is secondary and you have some venture in there. But how was the company capitalized, and what were some of the expectations and milestones that had to be met?
Brian Liu: Initially, I think like a lot of companies because we were bootstrapped, we never really got a lot of, let’s just say true capital to spend and to deficit spend. We were always spending whatever we made. We never went into the red too much. The first few rounds were from friends and family and private investors. Then we had one round where we worked with a local venture capital firm, and it was 2 million dollars. From then on, all the other investors were recapitalizations, and essentially additional equity, and some of our original investors were paid out. So, the whole company was built on really – I’m going to say about a million dollars of primary capital.
Alejandro: Wow. Very interesting. For you, you’ve been involved with LegalZoom for 19 years from co-founding and being the CEO to then becoming a board member and being more involved on a strategic level up until recently, 2018. How was it for you to give up the CEO ranks for the business of your baby?
Brian Liu: It was tough. It was really tough, and I think that’s one of the reasons why I’m onto this new business called BizCounsel which is – I missed it. When you’re the CEO, you’ve got a vision for where the company should be, and I’ve got a strong personality where I have strong opinions where I believe that things should be one particular way, and it should be done like this. Sometimes, when people have different visions, and then you bring on new investors, and everybody has different opinions – I’m one of those guys where I think my vision and my drive are really most useful at the start of a business. I think I’m pretty good when the company becomes more mature, but especially at the beginning. That’s really my passion. My passion is starting new things. It’s implementing a vision. It’s getting the team involved. Everybody driving towards something. That’s what I love doing.
Alejandro: Then you became a board member. What was that transition like? Now, like as a board member, who were you being? Who was Brian to be effective and to continue to push this venture, and was it hard to let it go, the CEO title?
Brian Liu: It wasn’t hard to let go of the CEO title. I’ll tell you the trust, Alejandro, what was hard was that you say and you think that you’re going to have more. It’s different. When you’re CEO, you’re calling the shots, and other people are responding to you. Now, you’re more like an advisor. I’d say if anything, not quite the same, but – I was just watching Game of Thrones, so I’m thinking you’re more like the hand of the king or the hand of the queen. Right? As opposed to being the king or queen.
Alejandro: Got it. Really cool. LegalZoom is now this monster companies, one of the leaders in Legal Tech. How big is LegalZoom today for the people that are listening to get an idea?
Brian Liu: It’s pretty big. I can’t disclose all the information about it, but it’s over 1,000 employees with offices in Los Angeles, London, and Austin. It’s doing quite well.
Alejandro: That’s amazing. What does it feel like when you look back, and now you see this company, what it is today?
Brian Liu: It’s pretty amazing. It really felt like the kid. My kid has grown up, and it’s still doing great, and I still want to usher it in with as many positive feelings, and I hope it continues to do well. I’m sure it will.
Alejandro: That’s amazing. Let’s talk about shifting gears for you and going at it again. BizCounsel. At what point do you tell yourself it’s time for me to say goodbye to my kid and to give birth to a new kid?
Brian Liu: Earlier, we talked about there were times when we knew that there were things that were pretty straight forward that you could do without a lawyer. It was more document-related, and things like simple incorporations or wills. The decisions aren’t legal who you want to leave things to. It’s your own personal decisions. But especially in business, we realize that there are times when you really do need a lawyer, and you need something a little bit more complex than just a simple incorporation or getting your tax ID number. You need a custom agreement drafted. You need contracts reviewed. You need people to read a document and say, “Are there any gotchas in here? Is it okay? Is it safe if I sign this?” We realize that the same problems that people had before in terms of not being able to afford an attorney or not wanting to pay $500 an hour or more for an attorney, that’s the same thing that’s happening now with small business owners. Small business owners who’ve been in business for three to five years or even longer, the majority of them don’t want to have a lawyer that they rely on. They, instead, are doing what other people do. They go on Google. They try to do their own research. They download documents and hope it works. The reality is, it’s not that simple, and you need the help, and there’s no solution out there. That’s why we came up with this idea for BizCounsel. It’s filling a similar type of gap where people need legal services. They need real lawyers, but there’s really nothing out there that addresses that need. That’s why we started BizCounsel. That’s why I started it. It’s also because, as I said, I think I’ve just got a passion for not just legal innovation, but just a passion for coming up with these visions and helping people fill in the gaps. I’ll tell you one thing. From the very beginning, I’ve been very enthusiastic and very much of a supporter of small businesses and entrepreneurs. These are the guys who have the toughest road to travel. It seems like all the cards are stacked against them. I want to level the playing field. I want to make it easier for people to achieve that American dream. We always talk about how small businesses are the backbone of the American economy, but they’re also the ones who are getting screwed the most. So, I want to make it fairer and more even for all businesses to succeed.
Alejandro: How do you guys do that for BizCounsel? What is the business model?
Brian Liu: The business model here is instead of relying on a transaction. Every single time you need something to happen, you hire an attorney. They’re going to charge you $5,000 for a retainer. Then $400 to $500 an hour. We’re doing things on a subscription model. So, you pay a monthly subscription. You get a basic level of service where you can talk to the attorney without being on a very expensive taxi meter or paying for them to breathe. Then you can get a basic level of service. They’re always available to you. They can review contracts. When you need real work, they’ll do it at a discount. It’s building this relationship with an attorney where instead of the attorney always thinking, “I need to go and find just a few big clients who are going to spend $20,000 each year,” I can have relationships with more business owners. They may not need all the help. Sometimes, the preventative help and the preventative advice is much more important because you avoid the problems along the way. That’s going to be beneficial for the lawyer, and it’s beneficial for the business owner.
Alejandro: Did you guys raise any money for this business, Brian?
Brian Liu: We did. We raised some private funds. I also self-funded a lot of it as well because I read one of your articles, Alejandro, and I really do believe this. When you’re launching, you need to spend all of your time devoted to just this business. I felt that this way by self-funding and just getting some private investments, we were able to devote all of our time on just thinking and worrying about the business and on nothing else.
Alejandro: Who did you convince to join you this time around?
Brian Liu: I’ve got Robert Shapiro; he’s back involved. I’ve gotten the old team together, and I’ve got our original Vice President of Marketing from LegalZoom.
Alejandro: Very cool. Brian Lee, I see he’s also an advisor, but Brian Lee, also. What a career. ShoeDazzle, and then also The Honest Company.
Brian Liu: Oh, yes. Absolutely.
Alejandro: Really cool. So, how big is the team now?
Brian Liu: We’ve got a little over ten people in our Los Angeles office. We have worked with attorneys throughout the country, and it’s growing rapidly.
Alejandro: One thing I wanted to ask you here is why do you think that Legal Tech has not been disrupted as much as other industries.
Brian Liu: I think it has to do with the education of how lawyers are trained. I think two things. When lawyers are trained to follow precedent, they’re not trained in innovation. You always hear about things about the Supreme Court, and they’re arguing, “What did they mean in 1776?” You don’t think in terms of innovation. That’s number one. Number two, everything traditionally has been done by the hour. So, there has been no economic incentive to become more efficient and to do something different and better. We’re utilizing technology at BizCounsel because we believe that in trying to abolish the hourly rate as much as possible because we think that is such an impediment to progress. You know, you just don’t have any incentive. With the technology that’s happening and that’s available, the lawyers can be three time more efficient than they were years ago. But they’re still charging the same, and they still are not serving more people. There are just more and more people who can’t afford them, and they’re not being utilized as much as they should. There is this really great study that came out from Cleo. The average attorney who serves small business owners, they work, and they are paid on one-and-a-half hours per day. That’s it. One-and-a-half hours. If we can increase their utilization rate, increase their efficiency by 500% so that they’re working a full day. We can lower the price. We can service so many more people. We can really get to this ideal where – the bar associations talk about access, access to law, access to justice. We can reach that if we just utilize all the efficiencies that technology has to offer, and we think about new ways of doing things.
Alejandro: Do you think we’re far away from being in a world where – because you were point to it. It’s absolutely true that lawyers, at the end of the day, what they’re doing is going back in time with case law and seeing what other cases they could interpret to whatever they’re dealing with. So, the question here is, do you think that with artificial intelligence and machine learning we’re going to be very close to a world in which most of the work done by attorneys is going to be automated?
Brian Liu: I think that what will happen is that you still need attorneys, and a lot of the routine work will be automated, or it will be done in a much more efficient way. So, in the same way that LegalZoom kind of took over and automated a lot of pretty routine legal documents and processes, machine learning AI will do the same for basic contract reviews. But I have to believe that just like full true automated driving is going to be a lot longer of a project than people anticipated. Really true 100% machine learning on contract reviews and everything else will take a little longer as well. But I think that it will definitely be a giant, giant leap forward.
Alejandro: Where do you think that Legal Tech space is heading as a whole?
Brian Liu: It’s about innovation, and I see a lot of younger lawyers coming through, and they’ve got very unique new ways of looking at things. I think that’s what this generation of lawyers in their late 20s, early 30s, they don’t have the same way of thinking that some of the other lawyers do. Maybe they can learn all of the precedencies as well as school, but that’s great because they’re analyzing things from a different perspective, and they’re asking the question, “Why? Why is it like this? How can we make this better?”
Alejandro: For the people that are listening – I remember especially during the early days where I just wanted to make sure we had everything right and all of that. We were spending an enormous amount of money on lawyers. Now, looking back, there is so much stuff that we could have been able to cut and be able to make into maybe product or something more urgent. What kind of tips would you give to folks that are listening as they’re thinking about a budget allocation towards legal stuff?
Brian Liu: I think as a business owner, what you realize is that business owners and lawyers think very differently. Lawyers are trying to protect against that 1%; that 1% chance that something terrible could happen. Business owners say, “Give me 99% certainty, and I’m really happy.” What ends up happening is that the base agreement, the base deal can get done very quickly, and the business owner is happy, but the lawyer isn’t yet. The last couple hundred feet is where you’re going to spend half of your legal fees. As a business owner, you have to realize and understand that’s the way lawyers are, and you kind of have to take control of the situation sometimes and say at the very end, “Hey, look. This is close enough. This is good enough. We don’t want you to spend more time at this, and we understand the risks. We understand the risks. I’m comfortable with that risk because” – this is the keyword you have to say to them: “This is a business decision.” Once a lawyer hears those words, they say, “Oh, okay. As long as you understand, this is a business decision, okay. It’s off my hands.” Lawyers need to be controlled. They really do, and I think it’s incumbent on business people to understand a little bit about that, about the way they work. This is not just about lawyers. I think it’s with anybody you work with. You kind of have to know how to manage them. If you don’t manage lawyers correctly, it’s a 2 to 3x difference in terms of what that bill ends up being.
Alejandro: Oh, I hear you. When I’m exchanging emails with lawyers – they’re probably listening. They tell me “Why don’t we get on the phone to discuss this.” I’m like, “There’s nothing to discuss on the phone. Just get it done.” So, I get it. Brian, just to close the gap here on BizCounsel, in a world where the vision is fully realized, what does that world look like with BizCounsel making it happen?
Brian Liu: What I see is that BizCounsel is essentially going to be the largest legal service for small business owners in America. I really see us creating a platform where attorneys and clients interact in an entirely different way. We’re really creating something that’s changing the paradigm of how small business owners and lawyers really interact and how services are done. You know, the whole legal interaction and changing in a way that’s fundamental different and better for both sides. It’s a sorely needed service. It’s a sorely needed problem that needs to be addressed. As I said, large companies can afford lawyers. They can afford spending money on lawyers. When you’re a small business owner, you’re at an information disadvantage, you’re at a negotiating disadvantage if you don’t have access to a lawyer who can really help you through some of these more difficult cases, and some of the more difficult situations. Even small business owners have to abide by the same employment laws as large companies. They can get sued in the same way. But without those resources, you’re at a disadvantage. That’s what we’re really trying to address here. We want to try to level the playing field for small business owners, and we really believe that we have the opportunity to fundamentally alter the way that landscape is drawn.
Alejandro: Really cool. One of the questions I always ask the guests that we have on the show is, knowing what you know now – you’ve been at it for a while. You’ve built massive monster companies. I guess the question that I like to ask you is if you had the opportunity to speak with your younger self, with that Brian that was still an attorney at Sullivan & Cromwell ready to make that leap of faith and launch his own business. If you could go back in time and talk to that younger self, what would be that one piece of advice that you would give to yourself and why?
Brian Liu: That’s a good one. I like that one. I’d say, “Be confident. Be confident that you’ve got what it takes.” I realize that I waited a little bit too long in terms of making that jump. I knew it from the start. I felt like I had to get the three years in the law firm. Then I worked one year as an in-house attorney. The whole time, I have to say I started believing a lot of what other people were telling me. It’s like, “You’re a lawyer. How can you do this? How can you run a business? You don’t know anything about that.” I would go back and say, “You know what? You know who you are better than other people. Listen to yourself and trust yourself.”
Alejandro: I love it. You know, it’s like living things for tomorrow, and that tomorrow never comes. Right?
Brian Liu: Yeah. Yeah.
Alejandro: So, Brian, for the folks that are listening, what is the best way for them to reach out and say hi?
Brian Liu: Well, if they want to reach out, my BizCouncel.com. You can look me up on the website. It’s www.BizCounsel.com. You can call the general number, or you can send me a message through there.
Alejandro: Amazing. Well, Brian, thank you so much for being on the DealMakers show today.
Brian Liu: Thank you, Alejandro. It was great speaking with you.
Alejandro: If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic, and if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help whether it is with your fundraising efforts or with selling your business, you can reach me at firstname.lastname@example.org.
* * *