AI Driven Legal Evolution - Max Junestrand - Legora - Episode #64

Now, most companies from Sweden that are in our category would kind of say, let's do Sweden, let's maybe go to Norway or let's go to Germany if we're feeling adventurous, or maybe the uk right, like, and we just said, you know what, this product scales, it is comparably on the market, extremely good. So let's just figure out the motion of how to work with clients anywhere and let's hit the gas.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned and come away with actionable advice for our own journeys.

Today's guest is on a mission to revolutionize the way an entire industry works. His company has built the world's first truly collaborative AI for legal professionals. He's an engineer who's passionate about go to market, a visionary who's also laser focused on execution. His company, founded just two years ago, is already trusted by some of the biggest law firms in the world, including Goodwin Proctor, Clery Gottlieb and many more. It's the fastest growing company we've had on this show. Please welcome founder and CEO of Ligora, Max Junestrand.

Thank you so much for having me, David. I'm truly delighted.

Thank you for doing this in person. Also, you flew all the way from Sweden for this?

Just for this? I'm in New York more these days.

Yeah, it's great. Okay, great. Let's get right to it. First question, what's the one thing that you've done, big or small, at Lagora that's had the biggest impact? And you do again if you're CEO of another company company in the future.

Look, David, I think when we started.

There were probably 500 other legal AI assistants that were started exactly at the same time. And I think everybody was so incredibly focused on how do we package these models, how do we bring them into law firms, how do we bring them to lawyers? The thing that we did was we actually brought them. I ran sales for the first year and a half. We brought the company from 0 to sort of 2 million in ARR just on founder led sales with me and our founding a2hin. And I think that's something that set us up for success because it allowed us to grow really quickly during Y Combinator raise our seed round from Benchmark. Then we got the pream from Redpoint and then things just kind of started rolling. So that's something that if I started a company again, I would probably look to do the same. I think doing sales in the beginning, especially when you're new to an industry, actually forces you to build a lot of empathy for the use cases for the users and the problems you're actually solving. So not coming from the legal background, I think that was a necessity for me.

And you are an engineer. I mean, you started your career as an engineer, right?

I actually went to engineering school and then Covid hit. I got really demotivated with engineering because we were 300 guys in hoodies just coding from home. So I took in parallel the business school in Stockholm. And it's actually not the same system as it is here in the US There's a separate university if you want to do business or if you want to do engineering. So I ended up going to both the schools in parallel. And you actually had to hack the admission system a little bit to be able to do that. But it worked out really well because during COVID sometimes I would have overlapping tests that would be exactly the same time in the calendar. So I brought an extra phone and I did. I recorded myself for both the tests and I did. And I just did them both at the same time. So it was a lot of fun. And coming out of that, I think I was quite prepared both for, you know, having a technical background for what this adventure would mean, but also solid business understanding of the thing.

So when I talk to a lot of technical founders, and especially in the early days, what I find with them is their natural tendency is to go where they're comfortable, which is building the product, which is coding, which is all of that. And even when they have. They know they need to do sell. I mean, you can. They will say, I know I need to go sell. They just. But I have to fix this. I have to do this. I have to code, you know. So my question is, how did you. Did you have to force yourself or that to you. You just knew that that was. Was. Did someone say that to you? Or you just knew that that was a thing, really?

I'm a very introverted guy. Before university, I used to play video games professionally. Like, that's my comfort zone now. After Covid and when I was in business school, I think I started to realize the value of socializing, of working well in a group. And I would actually force myself to go to the university every day, sit with new people, get to know them, and kind of, you know, build out a network. And when we started the company, given that I didn't have any prior background in the space, I Actually reached out to about 100 lawyers and I said, can I pay you for your hourly rate and we'll go have lunch? And of course they were all, you know, much too nice to to take the rate. And you know, most of them would even pay for the lunch because I was in, I was in college still. But then you force the muscle of reaching out and of being uncomfortable. And I think sales is a lot about being uncomfortable. Right. But very quickly I found a lot of enthusiasm in it. And I think when I showed up, a lot of managing partners and CIOs would find this is the first guy who's truly enthusiastic about legal tech that I've met in the last years. Of course we need to partner with him. Maybe the product isn't there yet, but it's going to get there. And I think that slope of change as well, when you get in the door, you prove yourself and you continue to over deliver. That's what's kind of earned our right to play even at this bigger firms. Right.

And think the other part of this is that when you do it and people see you doing it, there is no one who can come after in terms of salespeople, in terms of heads of sales who can say, well, you don't know, Max, you don't understand what does, you know the managing director is going to say. Like they can't say that to you.

No, exactly. And I think it's very important that as a leader of a company, you, you know, one, know your strengths, but two, I mean, continue to prove them to the company itself. Especially as a young CEO.

Right.

I mean, you're hiring and you're getting people in who have done several journeys and they're taking companies from tens of millions to 500 million ARR. Or Stuart, who just joined us at VP Marketing. He did, yeah. Like global product marketing at Klarna and then it was VP marketing at Tink. Sold that for 3 billion. And when he joined, he said, max, this is my third unicorn. And then I'm done and I'm, you know, let's go for the journey. Right. And then to be very engaged in sales, but also be very engaged in product and have a deep technical understanding so that you can talk with customers about it. I think gives me a lot of clout.

Yeah, I love that. How so you get to call a couple million dollars of ARR. How do you transition from you doing the sales to.

Hiring a team to do it and having other people?

Yeah, I mean, so look, our founding sales team are all very Entrepreneurial and they were all in Sweden and none of them came from a sales background, so they were all consultants. They all came from either McKinsey, BCG or Axel, who actually is an iOS engineer who just happened to speak Spanish. And so he was responsible for the Spanish market and totally knocked it out the park. So we were able, I think, to kind of set the founding go to market motion. And then of course now we've sort of perfected it and industrialized it a little bit. So our first sales managers came in at the beginning of this year and yeah, I mean, we're close to 8xing revenue since the start of the year already. So it's been a wild ride.

And do you, did those founding AES, did they go with you?

Yes, yeah, we would take all the meetings together in the beginning and I think many of them have also made a very fast journey in a year from kind of bdr, SMB, you know, Mid Market Enterprise and even strategics. Right. Like we're having multiple conversations where the amount of impact and the size of the deals are growing so quickly because of the.

Sophistication of the tech. Like when GPT came out two and a half years ago in November 22nd to the point now there's been a huge uplift in the product quality and what you can actually achieve. But I still think we're at a point in time where the products are and where the model capabilities are. There's a quite big gap. So there's a million things left to build and we just need time and a lot of focus to go and do it.

Right. And people want to get in. What I hear from when talking to law firms, like, they, they know they have to do this. I mean, there's not really a question. I think it's in every industry. I mean, people know they have to do it and so they're trying to find the person.

That they want to partner with to go on that journey.

The person, the company, the tech, the culture, all of it. Right. And I think it's different for every industry in terms of what is really existential. If you look at law firms, I mean, your core delivery is legal services. And so there's a couple of reasons why I think it's existential. The biggest one is just the potential downside of the firm next to you on the street. Really figuring it out and you not figuring it out is incredibly detrimental. Right. If suddenly your bread and butter is transactional work and due diligences. Now it's kind of a low differentiated Service most of the time and the firm next to you starts to offer this at a quicker turnaround, better service, lower price point, and you're not software powered. How do you meet that? Because you're already running the task at sort of low margin.

Right.

There's no way that you can drop that. And so there's definitely something about doing it and implementing it now. But it's also about being ready for when the client appetite changes. And if you look at the way that enterprises think about this, so corporates like non law firms, for them it's not as much of an existential question in terms of bringing AI into the legal department. No, but it's a cost saving mechanism and it's also a way to set certain pressure on your law firms by saying, hey, we're already adopting this tech internally. We can already.

I didn't even think, I didn't think about that.

Now how are you working as my trusted advisor to save me money and provide me with the best possible service at your price point?

That's even more pressure probably for those. Because if the clients are going to them and saying, are you not using this? Because we are, of course.

And there's a different sophistication in enterprises in terms of how they're working with this. But if you look at private equity. Private equity, Private equity is typically quite sophisticated and they're looking at how they're going to adopt AI across their entire portfolio, you know, not at least internally for their legal services.

Wow. One thing when you talk about having that passion, understanding the customer, all of that, I, I have this memory of like I met with a couple, I was doing like 100 customer meetings in 100 days and I was asking them about like a bunch of different products that we were selling and, and thinking about buying. And yeah, one customer told me, they said, oh, I looked at these two products to do SaaS spend management, which was like kind of this complimentary space. And I said, and you chose that one? Their product is kind of farther behind the other one. The other one is larger. I'm just curious. And they said, and you know, the company's doing tens of millions of ARR that they, that they, the product that they bought it from. And he said it was because the founder came to the meeting. This is a company doing, you know, tens of millions of error. And the founder came and got me so excited about the future and about the vision. I know the product doesn't do what the other one does, but I'm going to buy something not for Six months or a year. But most of my contracts are for five, you know, three years, five years, seven years. And it was a really, it was just this click for me of. Of course, I feel that, of course, as a founder, like it's a big difference if I'm in there selling. But there is something about, I think people, especially with AI, I think they want to partner with the person who's authentically excited about solving their problem and.

Also has a lot of incentive alignment. To be very honest, the only way our business work is if the law firms that we work with do really well as a consequence of AI, they need to grow, they need to do better so that they can work with us and we can be part of that uplift. Because look, law firms are amazing at legal service delivery, but they're not amazing at building software.

Right?

Or at least 99.99% of them. And Ligora is not amazing at providing legal services, but we're pretty darn good at building software for it. And so I think this is a very natural mix.

So one of the questions as you, you've expanded, how big now is the team?

Oh, 140. Yeah.

And that's, I mean, from what I.

Understand from 50 in this time last year, it's crazy.

So you've hired a lot of people. You seem to have a very strong view of how the customer should be treated with the product all. How have you been able to scale.

That quickly? Is it outsourcing to all the managers and saying, hey, go hire your people, go do like. Because that's what a lot of. At least what I see with the hyper growth is like, let me hire the manager, the vp, the whatever, and they'll go bring in their team. Is that how you're doing it that fast?

For sure. A little bit of, you know, great people know great people. And so the first thing we ask you is write up the 10 names of the people we should go bring into the business. Right. And if everybody does that, you go very quickly. But the second part is being personally super engaged in driving our culture, in scanning for what we think is excellence. And I think it was Mark Zuckerberg who said it in an interview or something, but kind of like hiring for the Y slope and not the Y intercept. Right? Because you could say, okay, this company is growing incredibly exponentially. And so you either want somebody with a really high slope, right, who you think is going to grow with the company exponentially, or you try and pick somebody with a really high Y intercept who you think is going to, you know, survive for a while, but typically that doesn't work. And so even with the managers coming in, I'm quite clear with them, I'm like, you know, the company's going like this, we're maybe here and you're a little bit higher because you've done a scale above us. But as we hit your Y intercept, you're going to have to continue scaling or somebody else is going to have to come and row the ship from there. But I interview everyone. I interview every single candidate and every candidate except for engineering, actually. And the reason why I don't interview in engineering is.

I actually think I'm probably the worst. I mean one of the reasons why I became CEO was because I was the worst engineer in the founding team, I think. But no, Jake and Sige, my co founder who run engineering.

Jake is a previous entrepreneur as well. He just sold his YC company. We see very clearly kind of eye to eye in terms of what we're looking for. And that also gives us both the time and bandwidth to do what we need to do.

So you interview anyone other than engineering.

How much time does that? I've interviewed a couple CEOs who have said this to me, we've talked about this when we were preparing for this. And I wish.

I wish I interviewed everyone. Yeah, forever actually. We only got to, you know, 400 people or so. I wish I had interviewed everyone.

Did you see any, you know.

Deterioration in quality or.

Yeah, definitely. Because I think at some point I also believe. Well, not I believe. I know for a fact most people have never been trained how to interview. Right?

No.

When you put someone into interview, the experience they've had is being interviewed.

Yes.

But no one ever taught them how to interview.

And I've thought a lot about this because I will have a lot of first time managers. That means it'll be upstream how to be a manager.

Right.

So how to interview. Right.

And even if you haven't been trained as the founder, you, you care so much about the company, it almost doesn't.

Like you're not gonna let radiates.

Exactly.

Excitement. Yeah, no, look, I think I spend probably a third of my time on it and the. But I don't do one hour interviews. Right. I do kind of 20 minutes once. Right. So they're short, they're only at the final. Only final.

Got it.

I'd say I probably accept something like 70%.

Got it.

So I'm just kind of like the final filter. And then I tend to question some of the. You Know the hiring manager or the hiring team, what have we pulled together about this candidate? And then we have a final conversation about it. And I think it's very important that I speak lost in those conversations, because if I speak first, then you completely ruin.

I love that. I love that that is a really important to speak on.

And I learned this because I spoke first once and then everybody just said, yeah, I agree with what Max and you can't have that. Right?

So that was feedback. I got that feedback early in my career where someone said, well, if you speak, you're gonna color the opinions of everyone in the room. And I was like, you know, you don't really, you don't. You actually don't. In the beginning, you don't think about that. But I think for founders, I actually think that's good for not just hiring for almost all things is when you're in the room, let the team.

Yes. And it took me a while to realize this because in Sweden, there's a cultural phenomenon or value that's called Jante login. It means that you shouldn't think you are something. And it's not very good for building a hyperscaling business. But it enforces this idea that your opinion does not carry more weight than anybody else's and so on. And so in the beginning, I think I didn't realize that my words carried more weight in some types of some conversations. But once you understand that, then you sort of need to adjust your behavior.

What Is the number one thing you look for when you do that 20 minute interview? What is the number one either that you look for or the attribute you've noticed makes the person the most successful?

I look for ambition.

Because I think if you're really ambitious, you figure out things and you can tell if somebody's ambitious.

In terms of how they talk about things and in terms of how they talk about this opportunity. So the first thing I ask is typically I just ask them to quickly explain their life story and tell me about some problems that they've solved and why they've made the decisions that they made. And then when we get to the point around, often I interview lawyers, I ask them why did they go to law school and why did they want to be best at debating class and why did they want to go to that firm and not that firm. And if they just continue to say, well, I wanted to be at that firm because it's the best firm and I always want to be better in these things. And I think that sends a very positive signal for the mission that we are on because again, I'm looking for the hyperscalers who are going to be able to come into the organization, be very efficient and scale with the company as it continues to scale. Because every quarter this is a new company and so everybody needs to re earn the right for their seat.

Right.

One of the questions you just said you hire a lot of lawyers. Can you talk about that? We didn't. I'm curious about that. What roles are they going into?

Well, most of our client facing roles, both in pre sales and post sales are lawyers.

Right.

Yeah. Well, so let's say we work with the M and A team at Clery. If I show up and I try and teach that session and try and work with them on how they're going to rethink their M and A processes, I'm going to sound really stupid because I don't know the M and A lingo, I don't know the process, I don't know the clients, I don't know the work. So we're privileged that a lot of extremely talented lawyers want a different type of career. They don't want to make partner, they don't want to go in house.

Yeah, of course.

But they want to work with tech. And we give them a huge room and capacity to take everything from initial demos, use case engineering, running pilots, to then running the entire deployments. And some of these deployments are huge. I mean, it's basically like coming in as a McKinsey consultant.

Right, the change management.

Exactly.

It must be.

It's massive. I think. I like to think of it as when Excel came to auditors.

Yes.

And you had to reteach everybody how to work with a computer and how to work with Excel. That's actually kind of similar to the work that we need to do.

Right. And so these lawyers are doing. And they must be excited. I mean, I don't want to say anything about lawyers, but a lot of them don't.

Well, I mean, so look, there's lawyers who are amazing at what they do in their practice. And then there's lawyers who say, well, you know, I used to kind of be a. I used to do a lot of paper pushing because that's the way this industry is set up. As a partner, you don't make money on the hours you bill. You only make money on the hours that the associates underneath you bill. So you need to put a lot of associates to work in order to make money as a partner. So when you're an associate, not all of the work is Very glamorous. And so I actually think that technology like Ligora makes the work of an associate much more fun and rewarding and intellectual.

Right. I like that.

In terms of the team, is it all between New York and Sweden or.

So we're in. We started in Stockholm, quickly expanded to some other countries in Europe where we have local support. And then our second biggest office was in London and now our third biggest office is here.

And is it an in office culture or is it. Because that's all over the place. I mean.

Right. We're fully in office five days a.

Week in all those places.

All the places we have dinner three days a week. In Stockholm we have dinner five days a week.

Wow.

And is it hard to hire people with that or do you find that people want that?

I find that of course, you know, I find that the people who are joining really subscribe into that. And there's enough of a talent pool and understanding of the generational opportunity that is building on LLMs at this stage that. I mean the top of funnel to kind of accepting offers is. Right. Like there's. I don't think you could be at a more exciting company, frankly. I mean there's like a couple of verticals that have very high degrees of product market fit. Take legal, take maybe vibe coding or the cursor, like these types of tools. Healthcare has some interesting applications as well with companies who are doing incredibly well. And legal is one of these. So the other thing that makes legal very interesting is that there's been such a low degree of digitalization forever basically. Right, exactly. And so there's a lot of.

You're almost skipping over.

You're leapfrogging. Exactly. But no, you are really doing that. So you're leapfrogging a lot of the previous efficiency gain or change management that would have happened into a completely new paradigm. And this is extremely interesting from a product perspective, from how you market a product like this and how you talk about the incentives because they are also slightly perverse. Right, right. I mean if you're billing by the hour and you're saying, hey, let's try to rework this process with AI, then you might not be billing as many hours. So you got to rethink the way that your business model.

Well, this is literally my number one question when we talked is just I get that the law firm has to feel like the pressure from everyone else down the street and from the in house, but you are kind of telling them that you're replacing their hours with AI in a lot of ways.

Right. And I think the way that you should think about this as a partner in the law firm is maybe this is the opportunity to really get scale on my expertise. Right. Instead of only being to work with my pyramid of associates, I'm now able to do work that I could scale to hundreds or thousands of clients at the same time. And you're able to.

Effectively codify your expertise way of doing things and truly get software scale on it. Because I think if you look at many financial institutions, the sort of quota between people working with engineering and people working with financial services, they come together like quanta, they build products together. Right. And the same hasn't happened in legal, but it's starting to happen and it's starting to happen quite quick. So I don't think this is a sort of three year thing out, it's rather six to 12 months actually.

Now that you just said that, I'm curious, when what you just said makes a lot of sense with the quants and everything, do you think that there will be people, the Lagora, let's call it, I don't want to say admin, but admin. Are they going to kind of be that person on the ground taking, you know, because I don't know who that even is. There people like that in law firms.

Today that are driving the innovation agenda? Yeah, yeah, of course, yeah.

So they have ctos.

Yeah. Yes. The big successful law firms have dedicated innovation departments.

So that's who you work through, essentially. Got it.

So there's a couple of different, you know, it looks different in every firm. Sometimes you work directly with a partner and you drill very deep, like a top down motion. Sometimes it's we got to drive the AI literacy or across the firm or maybe we got to do both in parallel. Right. And I think there's something to the point of, you know, everything that AI can do, at some point it will do. And so as a law firm you are very, or as a law firm partner, you are actually incentivized to want to provide that service to your client, although you might not make a lot of money on it. Like let's take a very simple thing.

A red line of an NDA. Now this is something that law firms typically do for free to private equity companies. I mean, nobody makes money on redlining an NDA. But the reason why you still want to do that and why you might want to do it with the help of software is you want to own or continue to own that client interaction. So that when.

KKR is thinking about their next big fund or their next big LBO or something, they immediately think of your friend.

Or when shit hits the fan and litigate, who are you going to call? You remember the people that you send all those NDAs to? Right. And they're also the best litigators. Perfect, let's go work with them. It's sort of because the other alternative is they just take that work internally and then there's a zero margin on it. And frankly, if you're running an in house team, you already have a lot of people on your staff, you already have a lot of different software. Like ideally you just want to get the job done. And so if you can pay a small premium for it, I think you're very happy to do it.

So one of the things that I noticed and even when you talk about where your offices are, you've gone global, I'd say faster than most companies at your age or even actually stage of revenue.

Right.

You've gone global. Was that, let's say you tripped into that because you started in Stockholm, then moved into other markets in Europe or was that a purposeful. Like we are going to. Because. Because it is early.

Yeah. And we're actually, we've just set up our office in Australia and we're. And we're setting up in India as well.

So one thing that you learn very quickly if you build a B2B enterprise business in Sweden is that you're not going to build $100 billion business in Sweden. You need to go outside of your market. So you actually train the muscle of going to a new market very fast. Now most companies from Sweden that are in our category would kind of say, let's do Sweden, let's maybe go to Norway or let's go to Germany if we're feeling adventurous, or maybe the uk. Right. Like, and we just said, you know what this product scales, it is comparably on the market, extremely good. So let's just figure out the motion of how to work with clients anywhere and let's hit the gas. Because this is not a market where you kind of lock yourself in your room, you build for two years and then you come up with the best product. But it's this continuous iteration together with clients. And so the reason why I really like know our sort of keyword here, which is collaborative, is not only because the platform itself is collaborative between law firms and clients, but we as a company feel very collaboratively about our work with the firms because again, we only win if they win. And so we're incredibly incentivized to not only make Ligora land extremely well in these firms and for their lawyers to get success, but, but also to continue developing it in a, in a rate and in a, in a direction that is aligned with where they want to go.

I like that.

I know that it's been successful for you. What has been the biggest challenging part of, of specifically of going global so quickly like is that, is it localization? I talked to someone from a kind of customer support AI tool and they were saying the localization in some languages can be a little bit challenging if it's very specific. Is it localization? Is it your time having to fly all over the world?

I was going to say I'm definitely working up my frequent flyer miles.

But, but I think the product itself scaled very well. And almost every lawyer works in English, which is.

They have local work in local language, but every lawyer speaks English. Right. And so the platform can be in English. So that's very helpful.

One pretty challenging thing was actually negotiating with, I think we negotiated with Microsoft, Google and AWS for certain exemptions under German criminal law. That was a challenge. I think it was the smallest company ever to get exemptions from the standard terms with those enterprise agreements. But look, I think the hardest thing is the focus. Right? As a company, as a startup, you have a limited amount of focus and you need to spend it very wisely. When you say let's go serve clients in the Nordics, in Spain, in France, in Italy, in India, in Australia, everywhere all at once, it's hard to keep focus. But I think we've done a really good job of it.

And it's not some vibe coding, PLG thing that people are coming in and there's no plg. I mean you have to go, not you, but people have to go there, spend the time with the law firm. So that's the.

We're enterprise.

Yeah.

And I also think if you look at the legal industry, the enterprise or big law market has an incredible opportunity to leverage their precedent, their ways of working to actually become very software enabled. And they have the innovation and the personnel working with that. If you look in the mid market or even small law, it's a little trickier. It's more, you know, a mom and pop shop is going to have a more difficult time I think because they're the, they need to do a lot of the heavy lifting themselves.

Do you only go after the larger law firms?

No, but that's a majority of our market.

Right.

Let's talk about the product in terms of Your involvement with the product, you mentioned that you have your co founders who are really deep in the engineering piece and how involved are you on the product side and how fast? I talked to a guy who used to work with me and he went to a company, an AI first company, one of these engineering vibe coding things, and he said the speed that things are changing is literally, he's like, one week we launched something, we shut it down and launched a new thing the next week that was like, you know, how do you, how do you stay on top of that? How do you evolve that fast? And I would say in your case, with engineers it's one thing, but here we're talking about law firms, like, how do you do that?

The appetite for quickly throwing things around in the UI is not very large. Exactly right. You sort of, you inform the CIOs and the admins, next week we'll have an update. It's going to change a little bit, but don't worry, it's for the better. It's a different motion. So I'm very involved. I believe that our success is very tied to having the best product on the market because everybody can go and hire a big sales team, but not everybody's going to bring the best product to the market. And the product has, to your point, very quickly evolved. And we've made some poor bets, but a lot of the right bets. And I think in our industry, it's also a little bit of seeing what's working generally in the AI space. So what's working in the engine? Like take Cursor, our Word add in, which is an integration into Microsoft Word where you can converse with Legora and Ligora, makes edits directly in the Word canvas, is very similar to how Cursor works. So we're borrowing, you know. Yeah, we're borrowing the experience and you know, good minds think about, oh, the only thing is great minds still, I mean, to some extent, it's kind of about bringing a lot of good things together. We ship on a weekly Sprint cadence, which means, you know, every Thursday we sit down with all the lead engineers, all the PMs, and we say, this is what we have going on, this is what the big clients are asking for. What are we going to build? Let's ship it and let's ship it at a quality which is very high. Because with engineers, I think maybe your acceptance of slight errors or slightly buggy experiences, that tolerance is a little bit higher than what you have. In our world, if a law firm partner comes in and the Stuff doesn't work, they'll see you. You know, they're going to quote the SLA and be like, hey, guys, no. But, you know, they're not going to.

Their patience is not.

Their patience isn't there. And they might not even give it a second chance.

So there's no appetite for that. There's no tolerance. And this means that everything we build has to be correct. And when your space is moving 100 miles an hour, if you're going to make a product u turn that is incredibly costly. So.

We don't take a lot of time, but we take a lot of intellectual energy to making sure that we make the right decisions.

One of the things I like about you, the company, from the people I've met at the company, is this.

You have a competitor who is larger, who raised.

A lot of money, have been doing it longer.

But you're, from what I gather, growing. I don't, I don't want to make assumptions on speed of growth and everything.

But point is, well, the percentage growth is definitely higher.

And I would say in the most recent, you know, ad deals that we go up on, we tend to do incredibly well.

So my question is, how do you do that? Because that is, that can be, I think, for people I talk to founders who, you know, especially when you're looking from the outside and you see the big fundraise and the this and the billboards, and it can be, as a, as a founder can be scary, to be honest. And I've been through that. And you're like, they're going to crush us. Like they're, you know, and you kind of go into your shell or your team starts getting. How do you fight that battle? And you've been fighting, from what I gather, very well.

I actually think that.

No one in our team feels that way, but there might be some people in the opposing team feeling that way.

You remember AltaVista, but most people just remember Google. MySpace was pretty big, but turns out that Facebook was a much bigger company. And so I think there's a real value in actually being the second mover. And the value comes from two things, right? You get to see.

What is the right path and what is the wrong path. I'll give you a very clear example. Turns out fine tuning models and spending a lot of money on that was not the right move. Working directly with the latest OpenAI models, latest anthropic models, latest Google models, or Gemini models, that was the right choice. That's what we did from day one. So we didn't you know, go down that route. Very expensive, time consuming, you know, route. And now we're in this great place where I think the products become better as a consequence of competition in the market. And I think it's allowing our product team and engineering team to really shine. Like, what I'm most proud of is that we've given the Ligora engineers and product and designers a chance to bring their product or our product into the biggest accounts. Right. Like, we got the sales motion down to the point where we are in every conversation. You know, there's no firm that doesn't consider us. It's no longer this, oh, I won't get fired for buying IBM. Right. Like, that was definitely the case a year ago, but it's no longer the case now. And if you zoom out. So if you take a snapshot. Yeah. Then maybe like, you know, our companies are pretty similar in terms of when we go up against each other, but if you zoom out, you see our curve and it's very exponential. But if you're a company that started a year and a half earlier, especially with the, how should you put it, Unfair advantages of getting access to, you know, GPT4 before the public release.

I don't think most of.

Both Casetext and Harvey got access to GPT4 before the public release. And so there was a lot of.

Things being built.

Where we didn't even know that you could be building things. Because we were three guys in Stockholm, we weren't plugged into sf. And so I think there's also a real story here where we serve the European continent extremely well. And now with me moving here, we're spending more and more of our time in the us. There's a question of.

You want to get the best product, you want to partner with the best team, and at the end of the day, you just want your firm and your clients to do really well as a consequence of this technology. And I think we've done an incredible job delivering on that.

And so your team is kind of motivated by.

Oh, we are insanely motivated. Again, the main thing I look for is ambition.

Right, right, right. I love that.

We celebrate every win, we.

Grieve every loss, and we get even more motivated by it.

I think back when we were three guys in Stockholm and our, our first angel check was 50k and I think the other companies had raised, you know, 20 million, 50 million. And we said, you know what, we're going to go compete with those guys. That was a hard, it was hard to invest back then.

Right now it's very different.

And to be honest, it's also becoming a little bit of like a two horse race. Right.

Like there is, I mean it's an entire industry. Right.

I mean, yeah, but, but it's also like there's no third company. There's no, there's no contender, there's no third contender.

Right, right.

Like we've successfully or unsuccessfully, depending on how you view it, put a lid on the market where there's basically no third company getting amazing funding from tier one funds. And so we're competing for or trying to prove our value in every deal. And I don't really see any firm not ab testing us.

Only a couple more questions and I want to go to your background. But one of the questions you mentioned, yc.

I've had a couple of YC companies.

I'm curious your take on the value of that experience. I, I have never been to it, never applied to it. Obviously know a lot of people who haven't, haven't gotten in. But I'm curious from your perspective that YC experience.

I had a very.

Untraditional YC experience.

So when we, we got accepted really early on into the winter batch, all the way back in August. So we were one of the early applicants. And the reason why we got in that early was because we had a competing term sheet and we basically got an interview with yc, I think even took up the actual paper on the video call. And I said, Gustav, you know, we have a term sheet, a competing term sheet here for twice the valuation that you guys are going to come in on. Now do you want to do this or not? And they said, let's do it. And so we accept that offer. We basically lock in for the next sort of six months. And I don't know if I said this publicly before, but we were a Swedish corporation and we had to flip to become a Delaware. And that process was going to take like two and a half months or something. And I couldn't wait to get the money because I wanted to hire four more engineers to go faster. So I actually took out a loan against the YC money that was going to come in later.

A personal loan?

No, a company loan.

A company loan.

Which was I think very rare for at the time.

Right? It was very rare.

And then we went so aggressively that we were going to run out of money during Y Combinator. And so Yuri Sagalov, one of the first angels, came in with a 500k check and like, you know, made it possible for us to go out the YC batch. And then we raised our seed from Benchmark, but I only spent I think 5 days in SF for Y Combinator. So we went there, we did the initial, you know, off site, and then I was taking Sales calls between 10am, no 1am and 10am San Francisco time with this influencer ring light on my laptop so it wouldn't look like it was in the middle of the night. And I just couldn't do it. Like I couldn't do it for more than like three or four days. And then I said, guys, I'm going back. Like somebody needs to make sure that this, you know, our customers continue to thrive and that we continue getting new customers. So I went back to Sweden, locked in for a month and a half, just worked with our clients and we grow revenue From I think 10k mrr to almost like a million ARR. And then I was almost having a conversation like this with our YC partner, Gustav, and he said, max, I think you're ready to raise a bigger round than what most YC companies do. I said, oh, that's great. And I think you said that on a Thursday or something. And we went out on the Friday, on the Monday after.

And why did you want to be NYC so bad? Because you had another term sheet.

I think for us the main value came from this was a Swedish VC and we wanted to get into the American market. And frankly, the value has been awesome. They're super supportive.

Gary, John, Levy, Gustav, they're all amazing and we still work with them quite tightly. Actually, I'm not sure if that they recently became a client as well in their legal team. And we.

I think, continue to.

Get a lot of benefit of being surrounded by AI companies who are doing things in different verticals. So we get to pick the best from, oh, what's happening in sort of deep coding territory, what's happening in insurance, what's happening in. There's a few other legal tech companies, what's happening in banking. And then you see all these things, you get inspired and then you continue to build on what you're doing.

What is the biggest challenge you have faced? It's not been a long time since you started the company. What is the biggest challenge you faced and how have you overcome that?

I think the biggest.

Challenge or decision that we had to take was following our Series A from Redpoint. This was in 24 in May. We had our first kind of real board meeting and this is the first board meeting I've ever attended. Right. So I'm like, oh, you know, board meeting very Exciting. You prepare a little bit. We come to this place and we talk about what's going on. And one of the main problems at the time, and this was April, May 24, was the product and the reliability and scalability and the dependency on only working with Azure on OpenAI wasn't working for us. We would get very slow responses from their API. They pulled a lot of compute to train new models. And so the entire setup. Yeah, that was wild. I didn't know that our system was like a typewriter. Yeah, it was crazy. And we were only working with the European servers at the time for compliance reasons. And so, yeah, just a lot of problems. And we said, you know what? Europe is going to go on vacation for.

June, July, August, so we might as well take this time to really refine the product, solve our problems. And when we come back from summer, let's hit the ground running. So I told the board, we're not going to sell for the next four months, and we're going to hold off by onboarding all our clients and all the new people who wanted it. And people were knocking at the door. We said, oh, no, we're so busy. We'll schedule the onboarding in September. Right. Like, we're not going to do a good deployment now in summer anyways. And I think Redpoint, who had just put in 25 million after meeting me for two times, they were feeling like, ooh, all right, this is spicy. But turns out it was the right decision. And we onboarded, I think, like a thousand lawyers a day back in September and October, then that. That year. And so now, having done, I think, a lot of the foundational work in getting stuff right, has allowed us to scale again much faster than some of the other companies in our industry.

I think that decision.

There are many companies that could do, would have benefited. Yeah, you like doing that. And the problem is going into the meeting, the board meeting, and saying that is, like, borderline crazy, you know, like, especially for the first board meeting.

But it's. But that's where the tech debt starts, right? I mean, that's where it starts.

And I'm also, you know, I'm thankful that they thought it was a reasonably fine, fine idea.

Wow. All right. I want to transition to your background. So tell me a little bit about your, like, upbringing. Did you always know that you wanted to be an entrepreneur? Did you always know that you were going to do this or. Tell me a little bit where you're from originally. Give me the whole background.

So I. Born in Stockholm, grew up in the archipelago a little bit south. South of there. The reason why we moved to the archipelago was my dad had two businesses during the dot com era. One very similar to Zalando and one very similar to Klarna. Back then, back then, obviously none of them became Klarno. And I think he actually said something along the lines, so I took too much money from venture capitalists and I didn't want to have anything more to do with them and look at where I am. So he bought a boating business together with my mom and they said, let's move out to the archipelago. We want to move up from the city. That's where I grew up. Very small community. We were 10 people in my class, which.

Didn'T leave a lot of room for competition, you could put it that way. And I'm a very competitive guy. And so naturally I started playing a lot of video games. I think I started playing World of Warcraft when I was five or six. And then I went on from there to kind of play Starcraft and Warcraft and Heroes of New Earth and then Dota 2.

And that was really fun. And after that time the decision for me came, which was like, do you want to go to university or do you want to continue with video games as a professional career? Because I was playing a lot, I was playing 10, 12 hours a day like that.

And then I think I had a conversation with my dad which was in the best case scenario of playing video games, what happens? You win a big tournament, you win 5 million bucks. It's really fun. That's it, the best case scenario with going to university, kind of something like this. And I thought that was a much more energizing path and so went down that route. And I, in parallel with the two universities, I had the fortune to work in a VC. I worked at McKinsey, I worked at two other Y Combinator startups. And I think that entire ecosystem for sure had a lot of influence in terms of, you know, wanting to become an entrepreneur or wanting to build something. But it was really the paradigm shift in the LLMs. That said, you know, here's the opportunity, now's the time, just go for it.

What does your dad think now?

He's. He's the best.

He's very supportive. He's probably. He could have seen your Advisor in his LinkedIn on Legora, I think.

No, but, but he is.

Yeah, my biggest idol.

And.

Do you think that watching him growing up because you didn't see the dot com. No companies.

Yeah. I mean, look, a boating business is A very different thing. But he's very entrepreneurial.

Right.

And.

I think the most impactful thing he did, I'm getting very personal, but he took out or carved out an incredible amount of time to spend with me. And so I was competing in maths, I was playing the piano. I was doing all these things because he not pushed me, but encouraged me to do it. And when I was like one or two, like, he would just sit and do puzzles with me all the time. Like, you kind of. You know, I'm very similar to him. Now, the way that I'm maybe not so similar is I'm a bit more risk taking or maybe extroverted.

Right.

Which I think you need to be if you're going to make it in what we're currently doing, 100%. But he's a programmer. He's. Yeah. So, yeah, he's fabulous.

Fabulous, Amazing. Yeah. I grew up, my dad had a bunch of companies that he started, small companies, and he would take me to work with him and that was how I learned. And he would put me in the meeting with a notepad and say, take notes, you know, And I was like 8 years old. And, you know, and. And so, yeah. Do you have, other than your dad, do you have a kind of a mentor or someone that, you know, has been through this journey that's kind of there helping you through the journey?

Sure, I am. I'm actually quite close with our board members.

And one of our early angel investors, Eric. He used to be my boss, actually. And then I told him, hey, I'm quitting because I want to do this legal tech thing. If you want, you can be our first angel investor. And he said, I'd love to do it. I'll take all of it. I said, no, you can't take all of it. You need to bring in somebody who knows law and somebody who knows AI. So he did that. And we stayed very close during.

Still, but especially in the beginning as we were figuring things out, he actually made the first customer introduction. That led to our first main client, which then led to yc and then the domino continues.

What is what. What drives you at your core? Is it the competitive kind of nature? Is it to build a company that changes the world? Is it like, what at the core, what is that drives you?

I think it's a couple of things. One, yes, I'm very competitive. I hate losing.

I can tell.

I hate losing more than I like winning way more.

And I'm driven by this idea that whenever we feel like Legora has become what it should become.

Will everyone, our customers, our investors, maybe most importantly our employees and the team look back and all just unanimously say, Legora was the best thing for me? I'm so proud of the work we did that. I remember how fucking hard we worked, but, man, that was the best. If everybody looks back at it that way, regardless of the outcome, then I'm happy with it. Now I'm definitely taking this company public, right? And I'm like, here for the. For the home run. From. From the perspective of how do you maximize the impact you can have?

And I think that, again, just requires an insane level of ambition.

There's. Particularly in our industry, there's been a tendency of legal tech companies selling pretty early.

Yeah, yeah.

And exiting to companies like Thomson Reuters, Litera.

LexisNexis, and the companies that have done that, their products, they never grow. They become cash cows. The roadmaps start saying years instead of saying weeks. And that has a little bit poisoned the well when it comes to working with vendors and partners in the legal industry, because people are upset that, you know, I put so much time, I put so much effort, so much energy into this product and into this team, and then they just sold for 20 million to this one of these M and A shops. Right. And we've said very from the very beginning that that's not a route for us. That's not why we're here, where this is a generational opportunity and technological shift that we get to be a part of and that we want to bring our clients along on. So it's a very different attitude.

I think knowing everything you know today and having the experience that you've had. What is the one piece of advice you would give yourself before you started your career?

I think it would be to, you know, rely more and share the burden of what we're going through with the team and the people closest to me. Because I think it's very easy to see yourself as. Of course, I'm the main accountable person as the CEO of the company, but we're all in it together, and.

Our tendency to solve the difficult problems together is much greater than just myself. And I think as the company is now very quickly scaled, my ability to delegate and my ability to work with the team has multiplied by several times. And I think that's something that, had I done that earlier, it could have been even better.

I think that may. That's. I love that advice. I've been through that. I had a board member who told me he's sat on multiple public company Boards everything. And I was taking, I had 12 direct reports and I was doing. And I remember having a meeting with him. He looked to me and he said, dave, you're not getting a medal of honor.

No. And I think for doing all. And I had like 25 at some point and it just wasn't sustainable. And you know, it turns out you're just a ship manager.

Right.

Nobody has clear directives from you.

You can't think about anything other than dealing with demand, you know, so that, that is, that is great. I actually think for, for first time founders, that advice, it can unlock so much. If you. I believe, not just. I believe just sharing, being transparent with the whole company. You tell people what's going wrong and people will raise their hand like, no, I know how to fix that.

Yeah. And we had that happen on. I remember it, it was like a Friday, a couple of months or weeks back where, you know, we see a feature in the market and we say, hey, we really want to have this as well. Can we launch it next week? And this was on Friday afternoon. I called our head of engineering and say, jake, do you think this is possible? And he said, wait a minute. Puts a question in slack in the dev, like at all. Me and the CTO Sig are staying in the weekend, in the office over the weekend to build this thing. Does anybody want to join? And you know, 10, 15 people, immediately I'm doing my part, like, yeah, hell yeah. And then, you know, everybody came together, they built a feature, we got the marketing done on the Tuesday and we launched it the next day. So if the company is in it to win it, then everybody has a very founder esque mentality about it, which I think is love story.

Love that story. Good way to end. Max. Thank you so much for doing this with me. I enjoyed it. I'm happy we did it in person. And I know you're going to. I mean you're on an amazing trend line. Just that keep the, it's the stamina to keep that energy up yourself and for your team, you know, if you have that, you're gonna crush it. So thank you.

Thanks, David. This was amazing.

That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast.com we'll see you next.