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? 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. founded just two years ago, is already trusted by some of the biggest law firms in the world, including Goodwin Proctor, Cleary, Gottlieb, and many more. It's the fastest growing company we've had on this show.

Please welcome founder and CEO of Legora, Max Junestrand. Thank you so much for having me, David. I'm truly delighted. Thank you for doing this in person. Awesome. You flew all the way from Sweden for this announcement. And 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 in the future?

Look, 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, you know, 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 zero to sort of two 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 C drum from Benchmark. Then we got the preamp from Redpoint and then things just kind of started rolling.

That's something that if I started the 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 um it was a lot of fun and and coming out of that i think i was quite prepared both for you know that having a technical background for what this adventure would mean but also you know solid business understanding of

The thing is, 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 that. And even when they have.

they know they need to do so i mean you can literally 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

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. 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 um 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 uh to take their raid and then 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 firm's right

I 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 the managing director is going to say. 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've taken 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 clarity. Yeah, I love that. 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?

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 AX-ing revenue since the start of the year already. So it's been a wild ride. And 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 22 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 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're just in 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, 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 a

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 do these amazing things. 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 is typically quite sophisticated. And they're looking at how they're going to adopt AI across their entire portfolio, 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 have this memory of like, I met with a couple of, I was doing like a hundred customer meetings in a hundred days. And I was asking them about like a bunch of different products that we were. selling and thinking about buying. And 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, the product that they bought it from. And he said it was because. The founder came to the meeting. This is a company doing tens of millions of ARR. 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's 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 right like to be very honest um 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 Legora 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've expanded, how big now is the team? Oh, 140. Yeah. And that's, I mean, from what I understand- Up 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. How have you been able to scale that quickly? Is it... outsourcing to all the managers and saying, hey, go hire your people. 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? I mean, it's 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 grow very quickly. um but the second part is being uh 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 is 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, you know, y-intercept, you're going to have to continue scaling or, you know.

somebody else is going to have to come and row the ship from there. Um, but I interview everyone. I interview every single, every single candidate and every candidate except for engineering, actually. And the reason why I don't interview in engineering is, um, 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 Sigge, 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, like, and I wish, I wish I interviewed everyone forever. Actually, we only got to, you know, 400 people. So I wish I had interviewed. Everyone. Did you see any deterioration in quality? 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. 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 need to be obscured on how to be a manager and how to interview, right? And even if you haven't been trained as the founder, you care so much about the company. It almost doesn't... You're not going to let... You radiates excitement. Exactly. Excitement. Yeah. No, look, I think I spend probably a third of my time on it. Wow.

But I don't do one hour interviews, right? I do kind of 20 minutes once, right? So they're short. They're to the point. Only at the final. Only at the 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 hiring manager or the hiring team. What have we pulled together about this candidate? And then we'll have a final conversation about it.

and i think it's very important that i speak last in those conversations because if i speak first then you completely ruin i love that i love that that that is a really important to speak and i learned this because i I spoke first once and then everybody just said, yeah, I agree with what Max said. And you can't have that right. That was feedback. I got that feedback early in my career where someone said, well, if you speak, you're going to 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 jantelagen. 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. In the beginning, I think I didn't realize that my words carried more weight in some conversations. But once you understand that, then you said we 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 is ambitious in terms of how they talk about things and in terms of how they talk about this opportunity. Um, so, you know, the first thing I ask is I. typically i just ask them to quickly explain their sort of life story and tell me about some problems that they've solved and why they've made the decision that decisions that they made and

then when we get to the point around often i interview lawyers right like i ask them why they go why did they go to law school and why did they want to be best at debating class and you know why did they want to go to that firm and not that firm and

If they just, you know, continue to say, well, I want it to be at that firm because it's the best firm. And like, I always want to, you know, be better in these things. And I think that sends a very positive signal for the mission that we're 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? I'm curious about that. What roles are they going into? all most of our client facing roles um both in pre-sales and post-sales are lawyers right yeah so well so let's say we work with the M&A team at Cleary if I show up

and I try and teach that session and try to work with them on how they're going to rethink their M&A processes, I'm going to sound really stupid because I don't know the M&A lingo. I don't know the process. I don't know the clients. I don't know the work. So we're... privilege 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 yeah exactly it must be it's massive i think i i like to think of it as when excel

came to auditors. 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, 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 Legora makes the work of an associate much more.

Right, right. And rewarding and intellectual. Right. I like that. In terms of the team, is it all between New York and Sweden or? So 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. Right. We're fully in office five days a week. In all those places. In 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 this. 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. You know, take legal, take maybe, you know, vibe coding or, you know.

the cursor like these types of tools healthcare has some interesting applications as well with companies who are doing incredibly well but and legal is you know 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? 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 building as many hours. So you've got to rethink the way that your business model works. 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 law firm is maybe this is the opportunity to really get scale on my expertise. 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.

you're able to, I mean, 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 in with engineering and people working with financial services. Like they come together, like quanta, you know, 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. What you just said makes a lot of sense with the quants and everything. Do you think that there will be people, the Legora, 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.

people like that in law firms today? That are driving the innovation agenda. Yeah, yeah. Of course, yeah. 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 here 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're actually incentivized to want to provide that service to your client, although you might not make a lot of money on it. 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 hits the fan they come to you yeah who are you gonna call you remember the the people that you send all those NDAs to, right? And they're also the best litigators. Perfect, let's go work with them. Because the other alternative is they just take that work internally. And then there's a zero margin.

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. 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... Notice, 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. Yeah.

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 it is early. Yeah. And we're actually... We've just set up our office in Australia 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 a hundred billion dollar 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...

um 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 for 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 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 Legora land extremely well in these firms and for their lawyers to get success but also to continue developing it in a rate and 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 specifically of going global so quickly? 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 I think the product itself scaled very well and almost every lawyer works in English, which is... They have local work and 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 uh

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- enterprise. 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 in a small law. It's a little trickier. It's, 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 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, you know, 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 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. How do you do that? the appetite for quickly throwing things around in the UI is not very large. Exactly. 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 emotion. So I'm very involved.

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 legora 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 Grapevine Steel. 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, the 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're going to quote the SLA and be like, hey guys, no, but you know, they're not going to, 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 know, 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 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 AD.

deals that we go up on, we tend to do incredibly well. So my question is, how do you do that? Because 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 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, 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 it, 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 um you know you remember altavista but most people just remember google um myspace was pretty big

But it 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 and 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 Legora 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, GPT-4 before the public release.

I didn't know that. Case Text and Harvey got access to GPT-4 before the public release. There was a lot of things being built. that, you know, where we didn't even know that you could be building things because we were three guys in Stockholm and we weren't plugged into SF.

And so I think there's also a real story here where we served the European continent extremely well. And now with me moving here, like we're spending, you know, more and more of our time in the U.S. There's a question of, you know.

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 promise. 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. I love that. We celebrate every win. We grieve.

every loss and we get even more motivated by it and 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 gonna go compete with those guys that was a hard but 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? Yeah, but it's also like there's no third company. There's no third content. 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 right and so we're competing for or you know trying to prove our value in every deal and i don't really see any firm not ab testing us um

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 have never been through it, never applied to it. Obviously, I know a lot of people haven't gotten in, but I'm curious from your perspective, that YC experience. I had a very... untraditional YC experience. So 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, you know, let's do it. Right. 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 at the time. That is 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 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 five days in SF for Y Combinator. So we went there, we did the initial, you know, offsite. And then I was taking sales calls between 10 a.m. No, 1 a.m. and 10 a.m. 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 he said that on a Thursday or something, and we went out on the Monday after. And why did you want to be in YC 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. They, you know, Gary, John Levy, Gustav, they're all amazing. And we still work with them quite tightly actually.

I'm not sure if they recently became a client as well, 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 in sort of you know 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. um that you said you started the company what is the biggest challenge you faced and how have you overcome that i think the biggest challenge or you know 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. 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. Like our system was like a typewriter. Yeah, it was crazy. so we and we were only working with the european servers at the time for compliance reasons and so yeah you know just a lot of problems and we said you know what europe is going to go on on vacation for you know

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 gonna 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 um 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, oh, all right, you know, this is spicy, spicy.

Turns out it was the right decision. And we onboarded, you know, I think like a thousand lawyers a day back in September and October then 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? That's where it starts. And I'm also thankful that they thought it was a reasonably 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 are you from originally? Give me the whole background. So I was born in Stockholm. I grew up in the archipelago a little bit 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 Klarna or Zalando.

and i think he actually said something along the line 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 um so he bought a boating business together with my mom um and they said let's move on to the archipelago we want to move up from the city so that's where i grew up very small community we were 10 people in my in my class which um

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 you know i went on from there to kind of play starcraft and warcraft and heroes of new earth and then dota 2 and 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, right? And I thought that was a much more energizing path. And so I 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 the best. He's very supportive. He's probably, he could have seen your advisor in his LinkedIn on. legora i think um but but it is uh yeah i my biggest idol and uh do you think that watching him growing up

Because you didn't see the dot-com 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... And 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, he would just sit and do puzzles with me all the time. 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, which I think you need to be if you're going to make it in.

what we're currently doing 100 um but he's a programmer he's yeah so he's fabulous it's amazing um 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 eight years old and, you know, and, and so, yeah.

Do you have, other than your dad, do you have 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'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 know you can't take all of it uh you need to bring in somebody who knows law and somebody who knows ai so he did that and and we stayed very close during um still but especially in the beginning as we were figuring things out he actually made the first

customer introduction that led to you know our first main client which then led to yc and then you know the domino continues so 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? 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 hate losing more than I like winning. Way more. And I'm driven by this idea that Whenever we feel like Legora, you know, 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, you know, Legora was the best thing for me. I'm so proud of the work we did there. 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 home run 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 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 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&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. 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 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 has 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 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 at me and he said, Dave, you're not getting a medal of honor. No. And I think 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 the main, you know, so 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 and be 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 call our head of engineering and I 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 of 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 um we got the marketing done on the tuesday and we launched it the next 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 awesome. Love that 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...

I mean, you're on an amazing trend line. It's the stamina to keep that energy up yourself and for your team. If you have that, you're going to 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 notanotherceopodcast.com. We'll see you next week.