Software company CEO discusses challenges, benefits and evolution of sourcing outside counsel
Ari Kaplan. Photo by Lauren Hillary.
Ari Kaplan recently spoke with Jim Delkousis, the founder and CEO of Persuit, a software platform that facilitates a competitive process for sourcing outside counsel.
Ari Kaplan: Tell us about your background and the genesis of Persuit.
Jim Delkousis: Until 2016, I was a partner at several law firms and most recently at DLA Piper. I was a litigator focused on the construction sector, and as I started getting close to turning 50, I considered what was next for me and wanted to impact the process of how in-house teams engage outside counsel because it was a very clunky process. Anyone that has responded to an RFP understands how challenging it can be, and I thought that the entire process could be more streamlined, transparent and competitive. I founded Persuit to put that vision into reality, and that’s what we’re doing today.
Ari Kaplan: How would you characterize the transition from law firm partner to legal tech founder?
Jim Delkousis: It was hard. Working in a law firm provided a fantastic grounding for a professional services career, and I enjoyed all of the safety and comfort of a great partnership, great income and the chance to work with great clients. Moving from there to a legal tech startup or any startup with a clean slate is pretty scary, especially in the early days of trying to establish product-market fit and developing a product for which customers will pay that solves a real problem. Those early days were some of the toughest through which I have ever been. I would describe it as wandering through the wilderness, often alone. But I was really fortunate. I had a fantastic team and a lot of luck. Ultimately, we found a product-market fit and developed an application that solves a problem for our customers.
Ari Kaplan: What challenges do law department leaders face in sourcing their outside counsel?
Jim Delkousis: There are a number of challenges. First, it is just transparency in the market. Clients want to make an apples-to-apples comparison of their options, including their preferred stable of firms, and which is appropriate for what matters. Those choices are often based on relationships and a certain level of comfort, but those factors may not indicate whether another firm can do the job as well or better and at a more attractive price. We worked hard to simplify that choice and to help clients determine the right price and even fee arrangement that is consistent with an organization’s business goals. Second, the challenge is creating a consistent approach within the legal department because it helps prospective law firms understand the organization’s objectives and priorities, which allows those firms to be more responsive in the most critical areas in that representation.
Ari Kaplan: Aside from cost savings, what benefits does competition yield in this type of selection process?
Jim Delkousis: It is all about the right firm, right price. We want to make sure our customers are not paying too much while also working with the best team available. We also consider experience level and the diversity of the team among other factors when we weigh options. Price is just one criterion, but we do want to ensure that it is with an acceptable market range. Our focus on the right firm captures a number of qualitative features to help companies gain advantages from systematizing their selection of outside counsel, particularly those that have a high overall legal spend and a decentralized process for engaging external law firms. Combining those decisions in a single place with complete oversight of all the organization’s engagements offers greater clarity and incorporates more members of the legal department in the process.
Ari Kaplan: Can this process be applied to the procurement of providers of other services?
Jim Delkousis: Absolutely. The goal is fundamentally the same—selecting the right professional service provider at the right price. A lot of our clients, for example, use Persuit to choose management consultants, marketing support teams and IT services. It is all about being able to create a scope of work, a fee arrangement around that scope, sharing it with providers, and giving them the opportunity to respond to make an apples-to-apples comparison of the criteria that are most important to you.
Ari Kaplan: What are the challenges for an Australia-based company expanding into the United States?
Jim Delkousis: Back in 2017, we had just developed our product, and it was very early days. We had some piloting customers, but I just got crickets from many prospects. The market in Australia is smaller, which is a challenge, and it became very clear to me then that Persuit had to find success on a world stage. So in late 2017, I moved to New York and started to hustle there, and that’s really where we had some of our early successes, which produced early wins in both the U.S. and the European market.
Ari Kaplan: How do you see the relationship between law firms and law departments evolving?
Jim Delkousis: The personal trust and foundational relationship elements are critical and will never disappear. It is why we call our external lawyers trusted advisers. That said, however, pricing and performance data will increasingly inform and drive improvements in those relationships to allow them to develop beyond the personal connection.
Listen to the complete interview at Reinventing Professionals.
Ari Kaplan regularly interviews leaders in the legal industry and in the broader professional services community to share perspective, highlight transformative change and introduce new technology at his blog and on iTunes.