Y Combinator Gets Alt: Introducing Ironclad, The Legal Startup For Startups' Legal
What is Ironclad, and how can it help startups and other young companies?
“Laws are made to guard the rights of the people, not to feed the lawyers.” — Francis Bacon
As usual, the Bay Area is a step ahead in the alt.legal game. Its darling technology incubator, Y Combinator (YC, which launched blockbuster companies such as Dropbox, Airbnb, and Reddit), just launched a contract workflow platform called Ironclad, which is looking to shake up the legal game.
Ironclad is an automated legal documentation software, which its founders describe as “almost frighteningly simple.” Techcrunch noted its immediate value to young companies, stating that “[e]xpensive legal bills are often an unwelcome reality for young start-ups. Lawyers charge hundreds of dollars an hour, but are often a company’s only option for correctly preparing things like financial documents and sales contracts.”
Legal AI: 3 Steps Law Firms Should Take Now
Thus, Ironclad’s first corporate mission is to reduce legal costs and headaches for ~200 of the startups in YC portfolio. Their ultimate mission? Become the leading player in what they describe as a mega-billion-dollar contracts management market. I wanted to hear more, so for this week’s article, I chatted with Ironclad cofounders Jason Boehmig and Cai GoGwilt.
I met Jason — previously with the elite startup practice group at Fenwick & West — at Stanford’s FutureLaw conference in 2014. At FutureLaw, Jason moderated my panel on legal marketplaces, and asked great questions about where the alt.legal world was going (if you’re bored, real bored, watch the panel here). I should have known then and there that he was up to something, as he began that panel expressing his belief that we are in the very early stages of a massive shift in the legal profession.
Cai, Jason’s cofounder, is not an attorney, but an MIT-trained software engineer. Before Ironclad, Cai worked as an engineer for Palantir, an astounding private company now valued at over $15 billion, and known as one of the Silicon Valley Unicorns. He also went to my alma matter, Stuyvesant High School, here in the concrete jungle where dreams are made of (NYC needed a plug here).
Quick aside before the interview: as a born and bred New Yorker, from a family full of New York lawyers, it pains me to say it but Silicon Valley is where the cultural zeitgeist is right now. I recently watched San Francisco crumble in the movie San Andreas and two thoughts struck me: (1) the Rock is a really charming actor, and (2) this should have been NYC. Not since Tupac and Biggie has the East Coast v. West Coast rivalry been more pronounced. It needs a name, so I throw something out there and see if it sticks: A$$holes v. Asperger’s.
Sponsored
Is The Future Of Law Distributed? Lessons From The Tech Adoption Curve
Generative AI In Legal Work — What’s Fact And What’s Fiction?
Navigating Financial Success by Avoiding Common Pitfalls and Maximizing Firm Performance
Navigating Financial Success by Avoiding Common Pitfalls and Maximizing Firm Performance
Like many of the alt.legal businesses we have covered, Ironclad is building the tool Jason wished his clients had when he was working at Fenwick. Enjoy the Q&A below:
Joe Borstein: So for the non-technical lawyer, what does Ironclad do?
Jason & Cai: From the lawyer’s perspective, you can think of Ironclad more like a legal assistant. It does all the things that we aren’t very good at! Like checking that numbers are consistent throughout a document, tracking the status of 100 different transactions going on at the same time, or sending follow-up reminders.
Joe Borstein: Jason, how did you decide to take the risk of leaving Biglaw? Idealism? Boredom? Stress? Greed?
Jason: I think I’m in the small minority that actually liked my Biglaw job. (Crazy, I know). At the end I think it just came down to the feeling that this opportunity to start something was a very limited window of time in which things seemed to line up pretty well – there’s not a ton of legal tech being developed, there’s a huge market for it, and it doesn’t seem like things will stay that way for very long.
Sponsored
Legal AI: 3 Steps Law Firms Should Take Now
The Business Case For AI At Your Law Firm
Joe Borstein: Cai, you came from one of the best private companies in the world, why did you decide to enter the alt.legal arena?
Cai: Because lawyers are awesome! Actually, though, lawyers think like engineers. Building a contract is a lot like building a program. It’s a bit of an art, but you also need to think through all the edge cases. The biggest difference between lawyers and software engineers is that software engineers can build the tools they need to scale themselves out, whereas lawyers have to rely on more people to scale. At its core, Ironclad is the platform that allows lawyers to scale themselves out. It’s the Palantir thing: give smart humans the tools they need to be 10x, 100x more effective. I love that.
Joe Borstein: How big do you two think this market could be? What are the major value drivers to clients?
Jason & Cai: I think it’s much bigger than people expect. There are a lot of naysayers out there that think legal tech will never be big. What I think they’re missing is that the legal tech market isn’t just the existing number of dollars spent. It’s actually a brand-new market that is enabled by technology. Technology is able to fundamentally drive value to clients in a way that just currently isn’t possible.
We can actually say to a GC that we can give them 100% certainty that all contracts that go through Ironclad will: (1) use the right form of agreement that they specify; (2) get executed in days instead of weeks, and; (3) have the signed final copy stored on the company’s system. That’s just not possible when you have people manually doing each step every time.
Joe Borstein is a Global Director at Thomson Reuters’ award-winning legal outsourcing company, Pangea3, which employs over 1,000 full-time attorneys across the globe. He and his co-author Ed Sohn each spent over half a decade as associates in Biglaw and were classmates at Penn Law.
Joe manages a global team dedicated to counseling law firm and corporate clients on how to best leverage Pangea3’s full-time attorneys to improve legal results, cut costs, raise profits, and have a social life. He is a frequent speaker on global trends in the legal industry and, specifically, how law firms are leveraging those trends to become more profitable. If you are interested in entrepreneurship and the delivery of legal services, please reach out to Joe directly at joe.borstein@thomsonreuters.com.
