Gary Allen is the founder of LeanLaw, a software company he created to streamline administrative tasks for lawyers.
Allen is a land use and environmental lawyer at Givens Pursley in Boise who still practices in his primary profession part-time. He’s also CEO of a company with about 10 employees that works out of the Givens Pursley offices on the software, which was created by local developers. LeanLaw software is integrated with Quickbooks, the popular software program developed by Intuit for small business owners.
Allen started thinking about LeanLaw more than 15 years ago. He’d been thinking about streamlining law firm administrative services almost since becoming a partner at Givens Pursley in 1995. But he only founded the company in 2015, after chance meetings with some local partners who helped him pull it together. The company has raised money from several different investors. It raised $405,000 in 2015, $125,000 of that from two Boise Angel Alliance funds. It raised $332,000 in 2016, including $75,000 from the Gem State Angel Fund, a fund within the Boise Angel Alliance.
Allen spent some time talking to the Idaho Business Review about his product and his company. The interview has been edited for length and clarity.
What problem did you create LeanLaw to correct?
I’ve been frustrated for 30 years now with the technology tools available to lawyers and how expensive it is to run a law firm. Even from the start I could see it. Back in those days, it was dedicated word processors that were really expensive. And now, for example, there is a carbon paper timesheet that is still in use by lawyers. Somebody has to take that piece of paper and input it into our software. It’s very inefficient and paper-intensive and very manual.
If you’re dictating a brief into a dictation machine, as some lawyers still do, that’s really time-intensive.
Isn’t that an extreme example?
No, it isn’t. There are lots of lawyers who still use yellow pads, including me for some things. Because the workflows are fairly complicated, it’s been really difficult to automate them.
The overhead in law firms has continued to rise. Professional services productivity is one of the huge laggards in the economy, and I can tell you why from the perspective of a practicing lawyer: It’s because you have all these manual workflows that require a lot of human assistance.
The bottom line is it’s $160,000 a year in overhead for the average attorney in the U.S.
So how did you get LeanLaw started?
I had the concept back in the early 2000s. I worked hard on it for a few years and then the technology wasn’t right and couldn’t find the right people, so around 2006, 2007 I had kind of given up. But the idea would not leave me alone. I was waking up in the middle of the night all the time.
In about 2011 I said, “I’ve just got to do something about this,” and then I started meeting the right people and things started to happen in a real positive way. It started with my friend Kirk Smith at Boise State University. He introduced me to Prof. Nancy Napier and Linda Clark-Santos, and I started getting engaged with the gangs in Boise State, and SBDC, and around 2014 my SBDC mentor, Betty Newburn, introduced me to Jonathan Fishman, who had a remote IT support business for small businesses.
We got together and realized we really needed each other – that software by itself wasn’t going to transform law firms, and services by itself wasn’t. We were like the Reeses peanut butter cup.
Isn’t there already technology out there that streamlines administrative tasks for lawyers?
There’s a lot of technology out there that can help lawyers be more productive, and if you know how to stitch it together and work with it, and you’re a techie, you dramatically reduce the cost of running the firm.
But but most lawyers aren’t going to do that. They have their heads down billing hours, doing what they like to do, and they need some help to figure out how to do that.
So that’s what Jonathan does for LeanLaw. We started working together informally in 2014, and Jonathan was friends with a leader in software development at Healthwise, Fred Willerup. We formed LeanLaw July of 2015 and in 2016 we found Derrick Hicks, the online marketing director at TSheets, and he joined us in January.
Derrick knew how to do this very specific kind of marketing we need to do as software-as-a-service product. Your marketing has to be web-based. You have a sophisticated clientelle and you have to be smart about testing out marketing methods because you can waste a lot of money and not get a lot of return.
How did you create the software?
We outsourced this to Royal Jay software, and then Fred took over when he joined, and he and some very talented interns have built the software from there.
How is LeanLaw software different from the other law firm software available?
Because it is deeply integrated with Quickbooks online, you don’t have gaps between your accounting software and timekeeping and billing. Also, we really understand how lawyers practice at a deep level, so it’s better customized for lawyers than stand-alone timekeeping software.
Seventy-five to 80 percent of our paid customers are using our software every day, which is unheard of for a SAS app. It’s higher than anything we know about. Our churn rate is incredibly low – that’s how many of your users leave. Our churn rate was 7.5 percent for first year. Anything below 12 percent, or 1 percent a month, is extremely good. What that tells you is customers are really happy and it’s a useful product they’re using every day.
Why did your attempt to start this in 2014 succeed after a few false starts?
Meeting the right people was serendipity. We found some unusual skill sets. Jonathan is an IT guy with people skills, not something you find every day. Fred is an empathetic software developer, also not something you find every day. Derek is a number-crunching marketing guy, which is also really unusual. And I’m a strategic-minded lawyer with some servant-leader style, and that’s really important.
These guys are all really self-directed, so I need to manage them in a way that lets them find solutions to things. It’s been exciting to watch the chemistry on that team.
How do you find your customers?
Mostly they find us on the web. Derek is really good at SEO, so we’ve started producing content that brings people to our website, and optimizing the architecture of how the site is built.
There are quite a few competing companies in our timekeeping and billing space, so it takes time to rise up the rankings so you get seen. Our biggest challenge is executing a smart marketing strategy so we get seen on the web. If we get seen, we win – most people who see our product think it’s a better option for them.
Can you really pry people away from outdated technology?
Some of them will never change. But there is a compelling economic case to be made to switching to what we call lean practice. You can cut your overhead by 50 percent or more by doing that.
Some will finish their careers using the old ways. But if you look at our customer base, it’s not age-biased at all. You just have to change your mindset and say, “If I use the electronic tool, it’s actually more efficient and saves me a bunch of money.”
If we start to grow fast, we’ll have to find some new space. We’ve been poking around a little.
If we’re successful in raising more capital, we’ll be able to hire more people.
We’re ultimately looking for a buyer of the company who has a good synergy with what we do, maybe one of our partners like Intuit, or another legal tool that complements what we do.
We ultimately plan to have a matrix of products, both to serve all of the needs of lawyers as well as, potentially, other professionals. A great complement to what we’re doing with legal timekeeping is timekeeping billing for accountants, engineers, consultants – we think our product would not need a lot of changes to work well for them.