Every successfully scaled business venture is ultimately defined by the merits of its team. Solopreneurs quickly find out that, if they can’t simultaneously invent a method for cloning themselves, their revenue model is ultimately limited.
If you’re working on a legal technology startup, you see the open space in the field, and want to take over the world, or at least the littler world that exists in the legal vertical, category X. To do that, you’ll need help. The kind of help you’ll get, to begin with, is scattered. You’ll work with a combination of cofounders, contractors, volunteers, champions, funders, friends, family, true believers and some guy named Alfred. People will flit into and out of your sphere. Those persons who have a vested (or as yet unvested) financial interest in your organization are more likely to stick, naturally. Some people will want to quit existing jobs, but decide that they just can’t. Some people will have a limited financial runway before they have to go back and get a ‘real’ job. The upshot is that, once you move past the idea phase, and begin to work on putting a coherent team together . . . well, that’s the first time you’ll be introduced to the specific type of crazy that is launching a new business. If you’ve never done it before, you’re going to be thrown for a loop, as theory converts to practice.
So, let’s run down the (un)usual suspects:
CEO.The C-Suite is no more meaningless than in start-up culture, because in most cases the ostensible CEO is doing just about everything. If it’s your idea, and you’re funding or bootstrapping the company, congratulations: you’re the CEO. You’ll have to wait for that golden parachute for a little while, though.
COO. If you are in a situation where you have a cofounder, one of you will likely be the CEO, while the other is the COO. Ostensibly, it is the COO’s job to manage the company’s operations. Of course, a company of two people doesn’t often have a slew of properly-defined ‘operations’ to run, such that this is mostly a nominal title, as well. Practically speaking, there may be little to distinguish the CEO from the COO in the early stages of a startup.
CTO. Now, for a real job. If you’re going to be founding a technology company, one of your first hires or one of the cofounders you should add first is a chief technology officer. In other words, you need a guy who’s going to build the software. (Sadly, in the vast majority of cases, it’s still a guy.) A technology software company without a technology software to sell is not converting any sales. So, this is step one. At least for the initial product build, you’ll want to hire a U.S.-based CTO, even if he utilizes overseas developers — who tend to cost less. It helps if you can onboard a CTO as a founding member of the team, so that the CTO can design at least an MVP version of the product, while the CEO and/or COO can do . . . everything else. And, in most cases the CEO-CTO tandem works just fine, too.
CMO. In the technology startup world, the chief marketing officer is less vital than the chief product officer, which is essentially the role the CTO serves in an early stage startup. Don’t get me wrong: marketing your legal technology startup Is essential. Especially if you’re taking on investment, you need to intelligently spend your way into customer gains in order to meet the milestones you promised your investors. But, this really comes down to a simple decision: for most people, it’s far easier to write and publish content online, than to code software. In a pinch, a CEO or COO can act as CMO, and push marketing through free channels until the company has the money to onboard someone who can manage a marketing spend, and construct successful, professional campaigns. That being said, your CMO may be your first proper hire.
CFO. This is an easy one: if you’re not making any money, guess what — you don’t need financial management person. However, as you add clients and revenue, and as your corporate finances become more complex, it does make sense to add a chief financial officer. And, in terms of the way technology companies are managed, the CFO is not always just a number cruncher. For example, if you need get to revenue quicker, on your monthly subscription-based model, your company’s CFO may be able to work with a financing company, in order to get your clients locked into annual arrangements, sooner or more often.
As you’ve no doubt noticed, there is a logical progression involved here, and it tracks a standard corporate growth pattern: the CEO and COO create the company, and build a strategy for running it. The CTO builds the product. The CMO sells the product. The CFO manages the money from the sales. Everything else that happens in your company, everyone else who is hired, represents branches from these trees. The CTO will hire developers, and the CEO and COO will support them by hiring product specialists to explain to the tools that have been developed to the users. The CMO will hire marketing assistants, and a sales team, which will eventually diverge, and come under the oversight of a sales manager. Eventually, your staffing structure may be organized on a regional basis. Putting the right people in place, with the right experience, from the outset, will allow your organization to flourish.
Aside from founders, first hires and next employees, there are other, significant team members who will not maintain a day-to-day role within the organization. Especially when you’re starting out, it helps to attach to your team industry-knowledgeable advisors, who can help to walk you through the process, introduce you to investors and make other valuable connections. Especially if you’ve never started a legal technology company, it helps to have someone who has done what you’re trying to do before, and whom you can count on to advise you along the way, so that you’re not constantly reinventing the wheel. Select the right advisors, and it may also help you to unlock capital that you would not have had access to on your own.
Your investors are also part of your team, and should be treated as such. The biggest barrier to launching a technology company is having the cash to fund the product build. If you don’t have that yourself, then you’re relying on other people’s money. These are the other people. But, it’s important to choose financial backers who are not only invested in you to a specific dollar amount, but who will provide you help, emotional support and solid advice along the way. Your investors should become informal advisors, even if certain investors will have more specific roles than others, e.g.—as members of your board of directors.
Lastly, there are otherwise unrelated persons who will assist you in growing your business. Your clients will be the primary supporters of your business, and should be thought of as team members, too. Your best referral sources are your team member, in a very real sense, as well. Your family members are also part of the team, because they have to be willing to sacrifice their comfort and routine to support your new venture. So, as you become successful, don’t forget about these non-traditional team members, who were with you from the start, standing during a chilly sunrise. Your job is to build a company that is a juggernaut, but that includes making sure that your investors (financial and otherwise) are rewarded for the time and effort they’ve put in, as well.
Jared D. Correia, Esq. is the CEO of Red Cave Law Firm Consulting, which provides business management consulting services to law firms and bar associations. Red Cave also advises startup companies and existing companies wishing to reach the legal vertical. Jared is a recognized subject matter expert on law firm management. He is a regular speaker for local, state and national bar associations and lawyers’ organizations and consistently writes for national legal publications, including this column for Above the Law. He prefers James Taylor and was in noticeably better shape before his kids were born.
Squad: How To Build Your Team For Your New Legal Tech Startup curated from Above the Law
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