Last week, legal technology expert and journalist Bob Ambrogi interviewed Vishal Sunak, Founder and CEO of LinkSquares, a leading contract AI company. Cenza reports here on the conversation Bob and Vishal had about a major new LinkSquares product announcement, the company, and its place in the legal market.
How did your transition to work from home go? LinkSquares transitioned in March from a mostly in-the-office environment to a Zoom and Slack run company. Moving to all virtual has worked out well. Many employees say they are more productive from home, especially without the commute. And as CEO, I see that. On the timing for the return to the office, LinkSquares will take direction from Massachusetts authorities. But it won’t be any time soon since we can run with a net connection and computers. I am not sure about when we will re-open the office.
Tell me about the company. We provide software to manage contracts. We have a contract repository and use artificial intelligence (AI) that reads contracts and extracts key provisions and data, and then generates reports. We also integrate with many other systems. We help legal teams punch above their weight, for example, answering questions like “have we ever agreed to X”.
How do you fit in the legal AI market? Historically, we worked in the post-signature market – fully executed contracts. We announced this week new capabilities for pre-signature capabilities. So now we are end to end.
How did you come to start the company? My co-founder Chris Combs and I were working in a start-up, Backupify, in 2015 when it was acquired. Neither of us are lawyers. The acquiror wanted to understand the business and plan for integration. It needed every agreement with every customer – and to understand the contents of all contracts.
The acquiror wanted to change the infrastructure for the back-up services that Backupify offered, migrating from Amazon Web Services to its own private cloud. They wanted to know which customers’ data they could migrate without permission.
Answering this required analyzing close to 5,000 contracts. We didn’t even have a General Counsel. It was impossible to answer that question. We didn’t even know where most of the contracts were.
At Backupify, I looked at tools in the market. That was part of my job; I bought about a $1M of software for Backupify. When I looked for tools to help with that big contract task, it was surprising to see how few tools were in the market for post-signature analysis.
Yet it seemed a big need; that is, the problem we faced seemed common. We subsequently confirmed that need in many conversations with GCs. We started building the product during those conversations and started LinkSquares in January 2016.
Tell me about the founding team. You need a pair of founders, with different skills. Chris was great at defining requirements via discovery and in sales. I focused on software engineering and product development.
How did you start selling? We started selling via the Boston tech ecosystem. I was plugged into it and learned a lot from people in the target market. We had to generate our own demand and meet a lot of GCs. Initially, we had to educate the market. We started by reaching out to targets with a short message: “We had a lot of pain dealing with contracts. You may have a similar problem. Can we chat?” We got a lot of yes replies. We did that outreach over a couple of years before pulling the trigger on working full-time on the new venture.
What does your customer base look like? Our customer base has grown rapidly via our great sales team. We have a couple hundred companies, big and small, private and public, start-ups and well-established. It’s been gratifying to see our tech deployed and the savings – 1000s of hours per year – at most of our customers.
What type of financing do you have: We had a Series A round of 14.5M in February, on top of a $7M prior funding round. That financing validated the market and let us accelerate our product development and customer base. My approach to raising capital was based on thinking about the next generation of our product. We saw a big opportunity: the contract market was exploding, and our customers said they needed help with pre-signature contract work. That drove us to raise capital – meeting that need and delivering the future faster.
Tell me about your new product and what it does. We are announcing a new product called LinkSquares Finalize. It’s a contract automation system, designed specifically to help companies create contracts, manage versions, and get to signature quickly. Where we are heading with Finalize is an end-to-end contracting tool. Today, the market is fragmented, with players addressing different parts of the contract lifecycle. If you look at our big customers like FitBit or Dick’s Sporting Goods, where they have many contracts, we know what all their contracts says. We know, for example, how often they have agreed to, for example, termination for convenience. We asked ourselves if someone negotiating a contract could be informed, and accelerated, by knowing what has been agreed to historically. We were driven by wanting to answer the question about “what’s market” based on data rather than assertion, which is what happens now. We do all this with AI, so yes, we remain an AI-driven company.
Where are customers on dealing with contracts? Historically, many companies dealt with post-signing management with brute force data extraction. That’s messy. It’s a tough crutch to stand on. Increasingly, customers want a single tool to manage their contracts, from inception through management. And it makes much more sense to collect the data as the contract is formed. That’s why we are excited about our new Finalize product – we are now end to end.
Contract AI and management is a hot legal tech category. Why? It’s the last frontier of companies’ org charts. It’s untapped territory for software. Most legal teams have not implemented much technology, especially not in comparison to their corporate peers. The start-up marketing is responding to that gap. The rise of legal operations also drives demand.
Where is the legal market heading? Multiple organizations such as ACC and CLOC have driven new thinking and the trend to modernize. Five years ago, the market thought storing contracts in Dropbox or equivalent was good enough. Now, the market understands the need not just to have access to contracts but also to know what they say. The demand for integrated technology, for platforms like ours, will go up.
What’s been the impact of COVID crisis? The crisis has shown the importance of knowing what’s in contracts. If keeping track of even basics like renewal dates was previously a challenge, it’s way harder now. And this is the first time Force Majeure and Act of God is a common topic of conversation. Widespread work from home just drives even more need to know what’s in contracts.