Clara, which helps provide legal assistance to startups, launches with $2 million in seed funding
Working as a corporate lawyer in Dubai, Patrick Rogers found himself at the heart of mergers, restructurings and corporate governance. After years in the trenches of international law, he found a brave and unpredictable new type of clientele he wanted to work with: founders and startups.
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But according to Rogers, the start-up clients didn’t fit the constraints of his day-to-day work. It was even harder to imagine working with startups in emerging markets, strapped for resources and cash but still looking for guidance. Yet, as he felt the number of founders growing in the Middle East and Africa, he quit his job and founded Support Legal to offer legal advice to these emerging companies.
Now he is creating a second company from the first: Clara. The new company just raised $2 million in a funding round to help digitize legal processes related to start-up operations. Clara plans to provide legal counsel, advice and relationships to startups and venture capitalists in emerging and established markets. Besides Rogers, the other co-founders of the team are Lee McMahon, Hannah McKinlay, Ahmed Arif and Arthur Guest.
“Traditional firms make money based on the number of hours their attorneys work with their clients on issues,” Rogers told Crunchbase News. “There is no link between the value delivered and the fees paid. Instead, clients simply pay for the number of hours lawyers spend on a given task, no matter how complex. »
Clara, on the other hand, designs a process around the legal steps and then builds software around those processes, allowing the software to perform much of the tasks associated with startup law. Then, founders may have the option of speaking to attorneys for more complex tasks, on a flat-rate basis.
“Your average founder is a first-time founder, [so] they don’t know what they don’t know,” Rogers said in a phone call from London, where the company’s headquarters will relocate.
How it works
Initially, startups will regularly pay Clara for support with their legal needs.
Rogers is confident that this strategy makes sense in part because Clara’s slew of investors includes Techstars and 500 Startups, both of which will function as a pipeline for new clients. For Clara, it’s free marketing.
“[Venture capitalists] let’s say we’re going to insist that every startup we invest in gets a Clara subscription,” Rogers said.
Next, Clara will offer some kind of content management system for portfolio companies (think Carta) to venture capitalists for a subscription fee. This will help you compare and contrast portfolio companies and consolidate all legal documents relating to financing agreements in one place.
Jason Boehmig, CEO and co-founder of Ironclad, which handles deals for companies like Dropbox, Away and Glassdoor, thinks startups are taking legal aid more seriously and investing in the space is getting bigger. more interesting.
Beyond the fact that compliance with the law is important, Boehmig believes that streamlining the management of contracts and other legal documents is a “hidden opportunity for efficiency gains”. This frees up the legal team for more important and time-sensitive parts of the business, he said.
Why doesn’t corporate law tap into advice-hungry start-ups? Boehmig, unlike Rogers, said lawyers aren’t shy about working for a startup, they want it.
“You feel like a business partner rather than just a business partner,” he said, when it comes to working with a startup.
Boehmig said he sees companies bringing in their first in-house counsel around the 100 person mark. Now he’s slowly seeing lawyers on the founding team of startups to help leaders become more effective.
Founders can expect to see a world of automation, clarification, and explanation to put legal expertise at their fingertips. Although it seems a long way off that we will see a world where startups are comfortable accepting the legal expertise of a Khan Academy-esque video, versus a professional. companies like Clara are banking on this new hybrid approach.
Illustration: Li-Anne Dias.
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