Ironclad CEO Jason Boehmig never really wanted to be a startup founder. In 2012-2013, Jason found himself as an associate at Fenwick and West in Silicon Valley, where he — the rare lawyer who actually knows how to code — was regularly “hacking around on these little ideas of maybe a computer script to help me run red lines a little bit better.” Jason’s experience circulating these scripts among his fellow associates impressed upon him the impact that technology could have on the practice of law, and “it started to feel like we were on the precipice of a sea change in the industry.“
We spoke with Jason recently at the CLOC conference in Las Vegas. Our conversation below has been condensed and edited for clarity.
The state of today’s in-house legal teams
Today, in-house legal teams are being asked to do a lot more work with about the same level of resources. So you’ve got, I think, 67 percent more work on the in-house legal team’s plate than they had three years ago, and they’ve got budgets up only a couple percentage points. So there has to be something that closes the resourcing gap. And a lot of legal teams are turning to software for that.
Another factor is that the rest of the organization has adopted technology. And the fact that the legal team touches every other part of the organization through contracts, means that a digital contracting platform has to be able to push and pull data to all of those other systems. That’s something that Ironclad is ahead of the rest of the market on.
The challenge of the quotidian
One of the neat things about being an attorney was that you really get to see the true issues that your clients — whether a publicly traded company or an early stage venture backed startup — are facing across a pretty wide spectrum. And I became amazed that the common problem that all these companies were facing was day-to-day business contracts.
For the big strategic transactions I think lawyers were doing a pretty good job at satisfying our customers’ needs. But in the day to day stuff, we were completely failing. Because the law firm’s too expensive, the in-house legal departments are tasked with all the day-to-day stuff, and there’s really two fundamental problems that started emerging there.
The first is it’s just slow and inefficient process. So everyone’s frustrated at the process of making a contract. And then the second is keeping track of contracts is a big pain. No one seems to be doing it well. One client referred to their contracting process as “a football field with stacks of paper on it on a windy day.”
We have a customer, a big box Fortune 500 retailer, that had a 70-page playbook they called “the bible,” which was their contracts playbook all of their salespeople had in their bags as they’re on the road. We reduced that into software, so folks could pull it up on their mobile phones, get deals done faster, and also allow that data pipeline to form between the information and Salesforce and the contract in a realtime push/pull way. The ability to talk to those other systems has unlocked a tremendous potential for contract technology, to push and pull data. Because every team needs to consume it and use it as part of their day-to-day jobs.
Ironclad’s philosophy on contracts: collaborative, connected, and insight into data
What does the ideal contract platform need to have? It needs to be collaborative, so the way contracts are created is cross-functional by its very nature. You’ve got business folks collaborating with team members. And Ironclad has the best collaboration capabilities in the market. So we’ve got every team from finance to sales to marketing to procurement working with legal teams on our platform across a really wide variety of customers, ranging from major league baseball teams to global beauty companies to Fortune 500 companies.
Connectivity to other systems is also crucial. Ironclad has integrations with DocuSign, Adobe Sign, Google Drive, Box, Dropbox, Ignite, as well as an incredible managed package for Salesforce. Some of our competitors have rebuilt parts of this ecosystem, so if you use some of our competitors, they’ve rebuilt their own version of DocuSign that’s not globally compliant, but if you’re a small business and you don’t really care about global compliance, that’s great for you. But if you’re an enterprise, we’ve built the connective tissue between Microsoft Word, between Salesforce, between Ignite, and others of these really enterprise-y systems. Frankly, it’s not fun to build those connectors, but no one has had the technical expertise, and the grit and resources to actually bang those out. It’s not a particularly sexy part of the product, but it is one that drives tremendous business value for our customers.
The third component is insight into data. Once you have the collaborative system, you start getting all of the data in one place. Once you have the connected systems, you can start to push and pull it, and let it flow around the organization. And then, finally, you can actually access insights and intelligence into what’s in your data. For example, one Ironclad customer is a wearable fitness device company. They were interested in tracking what percent of their contracts contained residuals. Of course you can’t improve on that metric if you don’t know what the metric is in the first place. And so once we started giving them visibility into that metric across the team, they were able to actually show improvement on that metric to their team.
Contracts as an engineering problem and not “boiling the ocean”
My co-founder, Cai GoGwilt, has two computer science degrees from MIT and was one of the key engineers at Palantir. Really just a true top one percent engineer in the Valley. He became fascinated with the fact that lawyers and engineers think very similarly and encounter some of the same problems. If you think about the problems that lawyers have working through a complicated contract, they’re really similar class of problems that engineers have: You need to merge changes, and you need to look at prior versions of code. You need to have some sort of approval process for when it makes it into production. Engineers have been able to build for themselves great tools to help them be 100 times more effective. They’re running unit tests, they have GitHub to store and collaborate on code. And lawyers haven’t been able to make any of these tools for themselves. So we started making this platform that would help with the end-to-end contracting process. And that’s where we felt the biggest need was for in-house legal departments, which was really going from zero to one–not trying to boil the ocean on day one.
What we’ve been able to provide is both the ability to start small — a lot of our customers will start by automating just a simple NDA, or high-volume business agreement — and also get to the end state, which is a true digital platform that has all of contract metadata in a searchable repository that also speaks with all of the other systems that companies might need to consume contract information.
The importance of the technical team
There seems to be a clearly recognized need for this extensive software for an effective in-house legal practice. But I don’t think anyone’s realized the full vision yet. I think that something that is really important for customers to evaluate when they’re looking at a solution is the strength of the technical team behind a solution. Because you’re really betting with the state of the market, as we’re in the middle ground, you’re betting on the team to deliver on the vision. And the state of the product development is almost a secondary concern, because one product may be six months behind in something, but if they have the better team, that’s the horse that you’re picking in your five- to 10-year race towards the final technology solution.
And that’s where I think Ironclad shines beyond anything. If you ask our customers what they think of us, “team” is the number one thing that comes out, beyond even the strength of the platform.
Influencers and the need for speed
Ironclad customers run the gamut from big box retailers to major league baseball teams to franchise restaurants to tech companies. One is a global beauty company which is signing up “influencers.” And these influencers are everywhere. They might be on a yacht or coming off their private jet on the runway… Speed is critical to signing them up, because as you can imagine, they’re pretty flighty types of people, and they don’t really care if they go with this beauty company or that beauty company. And speed of contract time is critical here, because you can miss a key influencer. Ironclad took this from a cumbersome, manual email process and set it up so that, as someone’s having lunch or having drinks with an influencer, they can pull up the agreement — which operates within the compliance framework that the legal department has established — on their phone. So the contract can be signed in seconds, in real time. The legal team was actually up for a global innovation award, which is unusual for in-house legal teams. It was cool to see both that the team had a really big business impact, with the ability to sign these influencers and track all the information, and also be recognized as contributing to the bottom line, not just spending money.