Legal tech made simple

Interview with Jim Delkousis, CEO and founder Persuit

December 10, 2020 Dom Burch
Legal tech made simple
Interview with Jim Delkousis, CEO and founder Persuit
Show Notes Transcript

This week I had the opportunity to speak to Jim Delkousis, CEO and founder at Persuit.

After graduating with his law degree, Jim began working at one of Australia’s leading law firms, Mallesons Stephen Jaques. He quickly made his way up the ranks, getting promoted to Senior Associate in 1995, and Partner in 1999. 

For the next six years, he oversaw their construction team, eventually helping the firm start a construction dispute practice in Perth.

Looking for a change of pace, Jim left his firm in 2007 and joined DLA Piper in Dubai to lead their dispute practice in the Middle East. Here Jim helped his practice group become one of the most profitable in the firm.

As he approached the tender age of 50, Jim started to rethink his career path. He left DLA Piper and founded Persuit to give companies an easier way to source and compare proposals for external legal services.

Fast forward to 2020 and Jim is working with the world's leading organizations including Walmart, Shell, Novartis, Johnson & Johnson, Exelon, Target, Citi, Facebook, Twilio and Square.

And saving them, on average, 37 per cent on quoted law firm fees for a particular assignment, which translates into tens of millions of dollars in savings. 

Tune in to find out more.

Dom Burch:

Welcome back to Legal Tech Made Simple with me, Dom Burch. I'm not a lawyer and I'm not even that techie, which makes me perfectly well-placed to help make legal tech simple. And I'm delighted , uh , this week on the podcast to be joined by a lawyer and a techie. So there we go. Jim Delkousis, who's the founder and CEO at Persuit. After graduating with a law degree, Jim began working at one of Australia's leading firms he's since made his way up the chain and worked at various places since including DLA Piper in Dubai, where he led their dispute practice in the Middle East, as he approached the tender age of 50, he's a spring chicken really, he decided to rethink his career path and , uh , he left DLA at 2016 founded Persuit, which is a , I guess it's designed to give companies an easier way to source and compare proposals for external legal services. Right, enough of the intro Jim let's get chatting, how are you?

Jim Delkousis:

Hey, Dom, how you doing? Now that description of me as a lawyer. You got that right. Now, the bit about me being a techie. I tell you what I can see my current team rolling around hysterically in laughter at me being described as a techie. But anyway, we'll, we'll carry on.

Dom Burch:

Well, you know , I think that's a good point though, because it's so easy isn't it to put people off with the idea that technology is somehow confusing or bamboozling . That doesn't mean you have to necessarily be somebody that can program lots of ones and zeros with, you know , weird signs that you only have your accidentally press on your phone. I guess it means that you understand how to harness tools and apply them in a way that makes frankly a human's life easier, simpler, you know , less stressful means we can go home at night and not wake up in the middle of the night, worrying about stuff. I mean, that's what technology is there for. Right?

Jim Delkousis:

That's absolutely the goal. And it doesn't, you know, one of the things that , um, uh, what that worried me before I made my change was look, I don't know anything about tech. So how do I make the transition from a lifetime , lawyer working at law firms to founding a tech company. And what I soon realized is as long as you understand the domain and the problem that you're looking to solve, you don't need to necessarily have the technical know how, a s it's about understanding the problem and having a team essentially, that you can motivate harness and can assist in solving the problem you experienced in your domain, having a bit of a vision about what that might look like in the future with the benefit of tech and t he benefit of, y ou k now, tools to make lives easier for the people in the ecosystem.

Dom Burch:

I mean, you're a sort of poacher turn gamekeeper. If you've come from that kind of law firm environment where often it might be accused of charging quite a lot for their services charging by the minute. I mean , I used to have that fearful moment when I was at Asda back in the day of thinking, if I speak to a law firm, even picking up the phone is going to cost me money. So I don't want, I won't ring them. I won't ring them and ask, I won't ask a question. And now, now you're trying to help companies, I guess, make sure that they're paying, you know , the right amount for the right sized project for that strategic input. You know, how how's, how are former colleagues of yours looking back at you and what you're trying to do, do they, do they welcome it? I mean, are they , uh , people forward looking enough in the legal sector to kind of go, we need this. We might not always have wanted it, but we actually need this to demonstrate our value.

Jim Delkousis:

Well Dom, it's a good question. Now I have to say there's a mix. There's a decent mix of reactions from , at the one extreme, a concern about what does this actually mean? What happens when you develop transparency and competition in pricing? Is that a , is that a race to the bottom , to the other end of the spectrum, which is gaining a lot more traction now is , and it's this the opportunity to be more transparent helps everyone in the industry and to be more competitive and to know where to pitch your pricing , um, relative to the competition that actually ends up creating opportunities for the law firms that otherwise didn't exist or would have gone by without that , uh, without that opportunity to be able to put your best foot forward, your best price forward and the best team forward and just finding a way. And that was one of the problems I was looking to solve , um, being in the industry for the time that it was and knowing that there were plenty of excellent capable lawyers that could do , um , the same kind of work that I was doing. And at no doubt, an equivalent quality, but for the client, to be able to find where those lawyers were and to be able to have an apples and apples comparison real time , um, that was the bit that was missing in the market. And that was the gap that we were looking to plug at Persuit.

Dom Burch:

So somebody who isn't techie then just help me understand. Cause I always find it fascinating when you talk to chief executives or founders of organizations of like going, you realize there's a problem. You know , you want to fix this, it's annoying the hell out of you and then you go, right, no one else is going to do it. I'm going to do it. How do you go on that journey to building this solution that doesn't yet exist?

Jim Delkousis:

That's a great question. So, so firstly, a lot of what I call founder naivety where you don't actually appreciate how hard it really is. Cause if you, if you really did , uh, you'd be insane to start on the journey, but, but having started on it, it's, it is really finding solution , uh, you know, the , the old minimum viable product, getting product into the hands of customers and getting them to use it, even though, you know, that that baby is ugly at the beginning, it really is, but you've got to start somewhere. And if you can find , some , uh , if you like the , the , the, the friendly customers that are willing to actually try and help you develop at those early days, you know, before you get that, to that stage, where we call product market fit. And there's lots of things that go into it. There's a lot of hustle. There's a lot, a lot of luck, probably more luck than, than typically , uh , you give credit to. So a whole combination of grit, luck, determination, and a willingness to , uh, to be rejected, all of that. And then ultimately I think if , you know, if you're determined enough, if there's enough grit there, you end up finding a path. Um, and that's what happened in the early days, you know, probably took us, I think, you know , at least 18 months before we had our first real paying customer. And that's the, you know , that's the journey you're on when you're in the wilderness. Um, finally, there's a bit of light and, you know, you get your first customer onboard , you learn, you get your second one on board, you learn more and then, you know, it starts building momentum from there.

Dom Burch:

I was watching a video on your site. I guess Walmart is a bedfellow, isn't it? Because, you know, having worked for Walmart for a number of years, the idea that you have transparency in your supply chain, across the board, whether it's Procter and Gamble, Mars, or whether it's, you know, in your legal services portfolio, you really want to , as the company, you want to understand where's the cost so that I can take out unnecessary cost . Now, even that concept for some folks will be like, Oh my God, red rag to the bull, because how do you quantify and how do you put a value on absolutely everything when intuitively, you know, as a consultancy or as a law firm, you kind of win some, you lose some, maybe you overcharge in this instance, but the reality is, you know, that you've under charged or over-delivered or over serviced and another, and it kind of, you know, one argument would be it kind of mends itself out over the, over the long run. So, you know, I guess I get it for Walmart. How do you convince other companies that this is the route that you have to go down

Jim Delkousis:

Well, it's all about, erm, if we look at the problem we're looking to solve the most efficient spend of that , um, external legal spend that , that an in-house corporate has, and that spend is typically Dom. That can be in the , certainly in amongst the fortune 500 in the tens, if not hundreds of millions of dollars and with the focus on efficiency, digitization, and ensuring that you're actually, you are getting value for money and you are spending wisely and transparently, and you're taking advantage of kind of a real time market in this sense, if a particular firm is extremely busy , and you invite that firm , at any particular time to put in a proposal, a pricing proposal for a particular matter and another equivalent firm for whatever reason is not as busy, they might've just gone off a large matter. And so they've got plenty of spare capacity. Then you can get a significant differential in pricing, not because of quality, but just because of if you like supply and demand capacity at that particular point in time, and that differential can easily be in the millions of dollars. So the , when the question is, how do you then convince a corporate to go down this path? It's actually not that difficult when you can demonstrate by , um, it real time that the savings can be literally in the millions of dollars. And we have some great case examples, some of them on a website where you have pricing, they start at 2 million and finish at a million dollars , uh , over a space of a very short period of a reverse auction window. And that simply reflected again, the market at that time , um , amongst competing firms and for whatever reason, spare capacity, knowledge of the matter, having done it before, whatever it might be, but creating an opportunity for a transparent and competitive pricing and giving firms the option, if you like to revise pricing real time, it just has , um, it's effectively allowing the market , uh , to attribute what the right price is for a particular service at any particular point in time in a particular jurisdiction. And what else can you ask for? Because, you know, firms are not compelled, if you like, to revise their pricing, they're only doing it if it's in their best interests. Um, so it's ultimately, it's actually not a difficult sell , um, because all you're doing is creating transparency, competition and fairness , um, in the market for legal services.

Dom Burch:

And it's a fair point, isn't it. And I guess it's very easy for some people listening to think, you know, maybe in a smaller organization, maybe they've got a panel of three or four law firms, but I guess if you're a massive multi international bank and, you know, we work with a few, they might have 150 different firms globally in different territories on their books at any one time. Sure. They're going to have like magic circle or whatever at the very top end dealing with particular matters. But so I guess that marketplace is, is very real. Isn't it with the kind of sums of money that you're talking about? What, what, how are you seeing it today then? Because you know, we're in the middle of a pandemic and there's been huge impacts in the way that companies organize themselves. And even this idea of re-engineering cost basis, right? Because it's like we've broken this sort of spell that you have to have the big flagship office in every capital city globally, and that people need to be based in those offices. You know, there's, can you see this , this being a catalyst for significant change in terms of the cost structure in terms of how people, well, how that market plays out? Cause I guess the market could become very competitive over the next six, 12 months.

Jim Delkousis:

Yeah. I think it's certainly another factor which is driving towards the kind of , um, transparency and competition that we've seen in the past. And one of the reasons is, you know, almost overnight organizations , um, and not only , um, corporates, but law firms have realized they can deliver their services really without skipping a beat online effectively, in other words, without necessarily having to be physically in-person somewhere. Um, and although there was , um, uh, a bit of a drop-off on certainly litigation activity, right in the midst of the pandemic , um, that's kicked up pretty quickly. And what I think the community is starting to realize is wow. Um, a whole lot of what we did previously can, we can continue doing, we can continue doing in , um, in online and therefore the, the, also the interaction, you know, between the in-house teams and the law firms, a lot of that has moved from in-person, whether that's the wining and the dining or the, you know , working together , um , through to online. So that's actually just , um , as it happened, it's , uh, it's moved consistently with what the Persuit paradigm is, if you like. That is, if you, if you can buy and sell in person transacting person and we've shown in the last eight months, you can absolutely do that online. Then what we've actually seen is a take-up, if you like on that level of activity where , uh, in-house teams are now more inclined to create their scope of work online, send it out to their panel firms online, have their panels, price , real time, what that particular scope of work is valued at.

Dom Burch:

Just talk us through that real time bidding or that reverse kind of auction mechanic. Cause I guess if you've worked in commodities in sugar or coffee or something, this is something that's going to be really familiar to you, but you know, if you're coming from a law firm or even a corporate background, you may never have been involved in one of these kinds of blind auctions, almost just talk us through, you know, so people can visualize how that system actually works.

Jim Delkousis:

Certainly. So as an in-house team, if you think about what used to happen manually, when you had a scope of work and you were looking for some proposals from, let's say two or three firms on your panel, you'd create a word document or PDF, you'd send it out. And you'd ask law firms either on email or their own PDF documents to provide you with proposals. Now think about taking that all online, where you can create a scope of work invite, whichever of your panel firms you wish, and your firms can provide their proposals all online, but more importantly, you as the client can choose what level of visibility you give to your firms when they price the work. So, in other words, you can say to your firms, I'm going to let you see the pricing of your competitors, all anonymized. So that real time you can see what your pricing is, what the pricing of your competitive firms are, how many there are, and then give you the opportunity to revise that pricing real time. So if you have a think about you, might've put in a price of $150,000 for a scope of work and you see you're against two other firms , one's at 130 and one's at 110, and then you have a choice within a particular window of time. And typically our clients leave it open for either 30 minutes or an hour. The firms can choose what, what revisions, if any, they'd like to make to their pricing. And they do it all real time and online. And they can then also see , um , what revisions their anonymized competitor firms are also making and give them a chance to revise , continue revising if that's what they wish to do in light of what the competition is doing.

Dom Burch:

And looking in on that process. And this is an unfair question, but do people then tend on the client side, let's say on the corporate side, do they tend to make, you know, a proportional saving each time they do that? Do they see the firms all kind of bridge down a gap and then are firms, therefore kind of coming into the process and going 'we need to build in some, some room for manoeuvre here'. Like we'll come in at 180, but we've got 30 minutes to bring it down to 120 or what's the behavior. And how are people playing the system or are they kind of, is the system working to the degree that it's intended, which is let's extract value and make sure that firms bidding for it, want the work and a bidding at the right price?

Jim Delkousis:

We definitely see the latter , um, that is, we don't really see people or firms playing the system. And let me give you an , uh , an example of why I think that's the case. If you're a firm that consistently bids high and has a significant drop in price, you will get asked by your general counsel and in-house team say , well , hang on. I don't really understand why you've consistently dropped your price X percent. Why are you starting off so high at , is that an indication that, you know, you're hoping to make extra , um , if the competition is not that low. So it's actually a difficult conversation to have. If you're a firm, I think that deliberately has a strategy of bidding high and then , um, reducing your price significantly because it does, just raises question marks about the starting price. Um, but what we can say overall, we have seen an average - and it is an extraordinary figure - of a 37% differential between the starting average price across the market and the finishing selected price. And if you think about spend in the tens or hundreds of millions of dollars, that 37% translates into millions, if not tens of millions of dollars in savings,

Dom Burch:

What a number well, Jim, listen, we could , we could chat all evening your case, all morning in my case. It's been an absolute delight catching up with you and finding out about Persuit actually Jim Delkousis, who's the founder and CEO at Persuit. Thank you so much for joining me on Legal Tech Made Simple.

Jim Delkousis:

Thank you, Dom. It's been an absolute pleasure.

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