Jim Delkousis on True Market Pricing and Solving the RFP Problem
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Here are some highlights of my interview with Jim Delkousis:
The missing part has been going from a price that law firms would like to be paid to a price that law firms are prepared to pay.
I am convinced the buyer and seller relationships were moving from a relationship-driven approach to a relationship and a data-driven one.
When you start a legal tech business, you’ve got to develop different skills to bring people with a variety of skillsets on the journey, help them buy into the vision and start creating a team.
I had a fantastic time practicing law, but I got to the point where I’d learned as much as I was excited to learn.
In the future, in-house teams will know at any point in time what a particular kind of service costs in a particular jurisdiction at a particular level of complexity.
It’s just a question of time until we have Fortune 500 companies and Am Law 200 on a single platform buying and selling.
On average our clients are achieving between 20-30% reduction in their outside counsel spend just by having an easy and competitive manner in which to achieve pricing.
When you are category-creating, you are also educating the market.
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Greetings friends, this is Chris Batz, your host of the Law Firm Leadership podcast. In today’s episode, I spoke with a legal tech CEO, whose platform has been described as incredibly powerful or game-changing. We discussed his big law career, his company, his perspective on the legal industry looking forward, and much more.
Just a reminder, the PDF transcript of this audio is available to download. Go to LionGroupRecruiting.com/podcast.
As many of you know, we interview corporate defense, law firm leaders, partners, general counsel, and legal consultants. You are listening to episode thirty-five of the Law Firm Leadership podcast.
Chris: Welcome to the Law Firm Leadership podcast. I’m your host, Chris Batz with the Lion Group. Today I have the pleasure of speaking with Jim Delkousis, founder and CEO of PERSUIT. Prior to launching PERSUIT, Jim had 17 years in big law. The first eight years in construction litigation at King & Wood Mallesons in Australia, then a total of nine years with DLA Piper, six of those in Dubai, building their disputes practice, and three more back in Australia including co-global head of infrastructure and construction.
Jim founded PERSUIT in 2016 and now has among its customers ten Fortune 100 companies using the platform to source and compare proposals for external legal services. He received his law degrees from the University of London and the University of Melbourne. Welcome, Jim, to the Law Firm Leadership podcast. It’s great to have you on the show.
Jim: Thanks very much for that intro, Chris. I feel a bit exhausted having listened to that, but it’s great to be here.
Solving the RFP Problem
Chris: People have told me PERSUIT is disruptive, powerful, and has the ability to do some things they haven’t seen before. What is PERSUIT?
Jim: We’re looking to solve the problem that currently exists in the way in-house teams source their outside counsel services. Typically, it’s a very manual process. We make the process easier by streamlining and automating it. We deliver pricing transparency in the legal market, which has been absent until now. Our customers need to know what a particular kind of matter in a particular jurisdiction should cost at a particular point in time. Providing that answer is one of the problems we’re looking to solve.
Chris: Who experiences transparency with PERSUIT?
Jim: We provide transparency to the clients, in-house teams, but we also provide transparency to the law firms. Law firms are able to see where they rank in terms of their pricing and, if the client chooses to make the pricing transparent, the law firms can see anonymized where their competitors have priced the same type of work. Previously, in-house and law firms haven’t had that transparency.
Chris: So, the legal service providers are anonymous, and don’t know who is at the table competing necessarily?
Jim: Correct. The clients can choose to let the law firms know. It’s entirely up to them. We are not a marketplace where our clients are matched with law firms. We work with Fortune 100 and Fortune 500 companies and they often have established the supply side which has been vetted and is in place. What we do is facilitate and deliver some transparency in relation to those existing relationships rather than trying to create new relationships.
Chris: What are other benefits of using PERSUIT?
Jim: On both sides, it’s streamlining and automating what has been a very manual and spreadsheet intensive process. Clients who already seek proposals for their outside counsel work have a manual process. They create an RFP document, send it out to their panel firm who then responds and some poor soul on the client’s side puts together the proposals for an apples-to-apples comparison.
That’s painful on the client’s side, but also on the law firm’s side because they’re all cutting and pasting to respond to multiple proposals in a way that is difficult to collaborate on. It is very manual, and automating that is one of the huge benefits that we deliver in addition to the price transparency.
Saving Time & Being Invited to More Opportunities
Chris: Jim, what have you found as far as a reduction of time?
Jim: Depending upon the circumstances, there’s anywhere between three to ten times greater efficiency. For example, we provide best practice RFP templates across different types of outside counsel engagements. The templates are available to the in-house team so that they can scale those internally. It also allows them to create a template from the Word document they otherwise had and scale that internally to save an enormous amount of time and institutionalize knowledge that otherwise gets lost in spreadsheets. In addition, having those proposals come back in an easy comparative form has saved days, if not weeks, of manual time.
Chris: There’s an incredible amount of savings for both the clients and the legal service providers, so they’re getting work more quickly and spending less time on their RFP process.
Jim: That’s correct, but not only that. One thing that we didn’t anticipate when we began, is that law firms are being invited to more opportunities than they were previously. On the PERSUIT platform, you can easily add another law firm to the process. The law firms get more opportunities that they can respond to and a better understanding of the kind of work that the client is sending out to its panel firms.
True Market Pricing
Chris: Do you find your solution is best used for more rote, reoccurring matters or are you seeing a different kind of market value applied to the top shelf of all legal services?
Jim: It’s across the board, from the more commoditized work right through to the high stakes litigation matters. A number of our clients are bundling up the reoccurring matters and sending out a portfolio of work and asking their law firms to price that on a competitive basis. For the high-stake matters, they are having those matters broken down into their various phases and each of the firms price on the basis of those phases.
You mentioned market value, but the term that we talk about is true market pricing. You don’t know unless you actually ask the market. One firm may have done that particular piece of work in that jurisdiction and has it down pat, so it doesn’t have to do any of the learning. A different firm may have the space capacity and be willing to invest its time in order to secure that piece of work so it’s willing to do it more competitively. When we talk about true market pricing, we’re talking about getting all of those factors working in real-time. We talk about going from a price that law firms would like to be paid to a price that law firms are prepared to be paid. That’s what clients have been missing out in the past.
From a law firm’s perspective, knowing what the market is saying about pricing at a particular point in time is also helpful. It informs the law firm if they’re 20% above the market and allows them to ask what they’re doing that’s less efficient than their competitors? Is there some work they shouldn’t be doing or is it a matter of improving their own processes? Ultimately, it’s about getting transparency and letting the market sort out what the true market price is at any particular point in time. This need is not actually unique to law. It’s a problem that exists across the broader high-end professional services.
The Ideal Customer
Chris: Who are your ideal customers and who currently uses it?
Jim: Right now, our customers typically have a very high legal spend that is decentralized and they’re looking for a way to centralize it. Another typical customer has it centralized, but they’re doing it in a manual way. Because the kind of value that we’re delivering is reducing external spend and automating processes, the ideal profile is the customer which is in the Fortune 500. It’s got a high legal spend and we’re able to deliver significant value very quickly through savings and automating those manual processes.
Chris: Does this require existing legal technology or does it work with the most archaic corporate legal departments?
Jim: That is one of the key challenges for any tech, but especially legal tech. We learned really early on that you have to deliver something which is as easy as what the in-house team is doing right now. In other words, as easy as an email. That’s what we focused on right from the outset. How do we make this as simple and as intuitive as what our customers are doing right now, but multiplying the benefits? The answer is you don’t need an existing technology platform. You need a login and you’re up and running to issue your request out to your law firms.
Chris: Are there any objections from clients exploring this tool?
Jim: Certain clients recognize where they are in the maturity model on legal operations. For those clients that already have centralization of the outside counsel engagements or sending out RFPs, we have an immediate benefit. There’s not a change of behavior challenge there. Where it can be harder is with the client who has no current process for getting competitive proposals and each of the in-house attorneys has their own favorites. There are challenges with changing their process and behavior. Some clients recognize where they are on that spectrum and that really determines whether they’re ready for PERSUIT.
From Big Law Litigator to Legal Tech Startup CEO
Chris: Previously, you were a litigator. What led you to start this tool?
Jim: Until 2016, I was a litigator and an arbitration lawyer in the last half dozen years around the construction infrastructure space. I was turning 50 and had a bit of a crisis. I had a fantastic career and couldn’t have been happier with what had happened in the past, but sat down and decided I didn’t want the very same thing for the next decade of my life.
The second thing I could see was that the buyer and seller relationships in all the markets were starting to change radically. It was moving to buyer-centric and I thought about what it could look like for law and other professional services in 10–30 years. I was convinced it was going to move from a relationship-driven approach to a relationship and a data-driven one. At that point, I had a vision of what it was going to look like in the future and decided I was going to try and shape that future.
Chris: Was it a natural shift from being a law partner to a startup CEO role?
Jim: Completely unnatural. There was nothing natural about it. Any kind of startup business is hard work. Legal tech is particularly hard. I’m glad I was naïve because if you really know how hard it is, you might think twice. You have to learn a completely different set of skills. As a partner in a law firm, what you say goes and the type A personalities that work for you walk over hot coals because, at the end of the day, they want to be something like a partner.
When you start a legal tech company, it’s a very different dynamic. You don’t have lawyers aspiring to be you. You’ve got to develop different skills to bring people with a variety of skillsets on the journey, help them buy into the vision and start creating a team. On this journey, I’ve learned a truckload and weekly astound myself as to what I still don’t know, but that’s kind of the fun of it.
Chris: Do you miss practicing law?
Jim: To be honest, no. I had a fantastic time practicing law, but I got to the point where I’d learned as much as I was excited to learn. Essentially, we all get to a point where we know we need to move on and start learning new skills and setting new challenges for ourselves. That’s the point I got to, so no looking back and certainly no regrets.
A Shift is Coming for All High-End Professional Services
Chris: Give us your perspective on where the legal industry is going in 5 – 10 maybe 20 – 30 years down the road.
Jim: I think anything that you’ve seen which is manual within a law firm is at risk. There are some fantastic automation tools out there from contract drafting to contract analysis. I think everything that is manual is under siege over the course of the next five or ten years.
From the kind of problem that we’re looking to solve, if I look out at five-ten years down the track, what I see is a transparent, competitive marketplace. In-house teams will know at any point in time what a particular kind of service costs in a particular jurisdiction at a particular level of complexity. That market place will open up, not only to a buyer marketplace but also one where the law firms of the world will actually be able to proactively upload their capacity. What I see in the future is law firms being able to bundle up their expertise and offer it out to a marketplace of their existing clients or a broader marketplace. Basically, a fluid, two-sided marketplace where clients can post out their requirements and where law firms can also post out what their offerings are.
Chris: What other industries are doing that right now?
Jim: We don’t see it yet with high-end professional services. We see it with basic goods and basic level services. When you want the more automated or menial tasks done, you can send it out to a marketplace and get a price, but we haven’t yet seen it for high-end professional services. To my mind, it’s just a question of time. We talk about having the Fortune 500 companies and Am Law 200 on a single platform buying and selling. Ultimately, the data that gets generated from that platform will enable the future that I’ve talked about.
Chris: So, you’re talking about a shift in the way all high-end professional services are delivered?
Jim: Absolutely. Whether management consulting or accounting services, the same problem exists today. There’s very little transparency and it’s difficult to have an apples to apples comparison of capability and pricing in a way that drives a true market price.
Law Firm Growth Speculation
Chris: Do you see large law firms approaching the size of the big accounting firms in the future?
Jim: Ultimately, it is client-driven. Law firms respond to what they can deliver in regard to their client requirements. I see law firms continuing to grow, but if it’s not consistent with the value they are delivering to key target clients then another strategy is going to have to take hold.
Chris: Big accounting firms cannot have attorneys working for them who are US licensed and practicing US law, but they do have thousands outside the United States. Are they coming to the table and bidding on RFPs and projects with your clients?
Jim: The answer is yes because a number of those firms are on existing panels of the major corporates that are using PERSUIT. We’re focusing on those existing relationships rather than trying to create new ones. We’ve certainly seen the big four responding and it’s not surprising because a number of them are part of the panel of the legal service providers.
Chris: Who else has a platform that allows scale bidding on RFPs?
Jim: We see ourselves as category-creating. There are many suppliers in the enterprise legal management space, but we haven’t found anyone who is looking to solve the problem that we’re working to solve.
That’s certainly a challenge we faced early on because when you are category-creating, you are also educating the market. We’ve been lucky in landing some early adopter Fortune 100 clients, who are helping us with that education piece. Right now, we do see ourselves as category-creating and leading the space, which I’m now really proud of.
20-30% Reduction in Outside Counsel Spend
Chris: What questions should large company executives and legal executives in the C-suite be asking after hearing this episode?
Jim: Why are we not using PERSUIT? But let me expand on that. At the CFO level, one important focus is on cost. To date, it’s been hard for the legal team to demonstrate that they are achieving competitive pricing and savings because it’s either hard to do or it’s a manual process and the data isn’t getting captured. At that C-suite level, the savings are resonating because on average our clients are achieving between 20 – 30% reduction in their outside counsel spend just by having an easy and competitive manner in which to achieve pricing.
In 2-10 years down the track, with all that buying data captured, you will know what a particular kind of work in a particular jurisdiction at a particular level of complexity should cost you. Right now, that’s been missing, but that’s starting to resonate within the legal team and the C-suite.
Leaving Australia and Calling New York City Home
Chris: Jim, you have Australian roots, and yet you call New York City home. Do you have family with you there?
Jim: I moved to New York in the last year and my wife travels between here and back home in Australia. I’ve got three gorgeous kids between 19 and 24 and they’re all back in Australia right now. One is working full time and the other two are at university, so I’m spending most of my time here and traveling back for important occasions like Christmas.
Chris: As I understand, you guys just had a significant milestone to celebrate, correct?
Jim: My wife and I just celebrated 25 blissful years of marriage. We did something that I’ve been dreaming about – taking a villa on the isle of Crete for a few weeks. We just had that in July, so we had a marvelous time with the kids over as well.
Chris: What do you think of New York as compared to Australia?
Jim: In Australia, I have to say that we struggled early on. In my journey, I talk about crickets in the first year or so trying to get customers. Moving to New York – and the first time I came here a couple of years ago it was a little bit do or die. Either we were going to land some customers here or we were going to shut up shop. That was a couple of years ago and the journey since then has been incredibly exciting.
I certainly attribute moving here to PERSUIT’s success, particularly here in New York. The ability to attract talent, to be close to our customers, and to get a profile has been instrumental in our early success. When I leave for longer than a few weeks, I start to lose my mojo a little bit and I need to get back here. It’s a really interesting effect that the city has on you.
Chris: What have you found to be enjoyable for you and your wife in your spare time?
Jim: Reflection and gratefulness. In fact, being very grateful. I’ve been very, very fortunate. I’ve had a fantastic career in law. I have a beautiful, healthy family. I’m doing something completely new, which scares me almost every day and I really enjoy the challenge. When I put all of that together, I regard myself as really fortunate that I can say all those things.
Chris: What do you have on your bookshelf that you would suggest or that you’re currently enjoying?
Jim: Over the July break, I did get a chance to read a couple of books. 21 Lessons for the 21st Century by Yuval Noah Harari is an absolute fantastic visionary book. I’d recommend that to anyone. Yuval was the author of Sapiens and Homo Deus, so I’ve now read the third book and I’m working my way back to books one and two.
The other book that I recommend to everyone and wish it was out 20 years ago is Matthew Walker’s Why We Sleep. It’s an absolute gem of a book about the importance of getting your eight hours. I read that book and read all of the studies about its importance and it certainly changed my view. I’m never going to say to my children again, “You can sleep when you’re dead.” That saying has gone out of my vocabulary.
Chris: Jim, last question, what is the kindest thing someone has ever done for you?
Jim: I’m not sure I can point to one thing, but when I look at what has influenced me most in my life, it is people who have dedicated their time in a mentoring role or a personal role. They’ve dedicated their most valuable things – time and learning.
Chris: Jim, it’s been an honor and a pleasure. Thank you for your time on the show today.
Jim: Fantastic, Chris. I really enjoyed the discussion.
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