Episode 100: Jack Newton, Co-founder and CEO of Clio

Jack Newton:

I’m Jack Newton, CEO of Clio. And this is the Daily Matters podcast. On Daily Matters, we talk with legal professionals, industry leaders, and subject-matter experts about the future of law. We explore where the legal industry is headed, how legal practice is changing and what you could be doing to position yourself for success. Today’s guest is me, to celebrate our 100th episode, interviewed by the Daily Matters podcast producers, Andrew Booth, Derek Bolen, and Sam Rosenthal. We’ll be flipping the script and interviewing me. Gentlemen, take it away.

Derek Bolen:

Thanks Jack, but we need to intro you properly. Jack Newton is the Co-founder and CEO of Clio, the leading cloud-based legal software. Jack is also the Co-founder and president of the Legal Cloud Computing Association, the author of the legal best-seller, The Client-Centered Law Firm, and the usual host of the Daily Matters podcast—and he’s our boss, so we really hope he likes this episode. Let’s get started. So Jack, when the pandemic first hit, in addition to all the other transitions that were going on for the company, you made the decision to host a daily podcast for the legal industry. Why was that important to you?

Jack Newton:

What I realized early on in the pandemic was that one of the most important roles Clio could play was helping our customers navigate the unbelievable amount of change and uncertainty that COVID-19 represented. And we did a whole bunch of things to support our customers and the industry as a whole, including launching a million-dollar COVID-19 relief fund back in March. But over and above financial relief, we also realized that there was a real need for almost dispatches from the front lines, in terms of how COVID-19 was impacting lawyers—how lawyers were navigating the challenges that were being presented by COVID-19. And we realized actually that there wasn’t really a resource out there that was doing that in the form that we thought would be as consumable and real-time as we imagined. We launched this podcast as a way of filling that need and giving exactly that kind of frontline dispatch, in terms of COVID-19 impacts on lawyers and how specific lawyers were navigating the challenges presented by COVID-19.

Andrew Booth:

Jack, it’s Andrew Booth here, long-time listener, first-time caller to the podcast, 99 episodes in which I think … Well now a hundred, technically. At the same time that Daily Matters started, obviously the entire legal industry and the world seemingly was shifting to some sort of work-from-home setup, and Clio the company at the same time was also transitioning to this distributed model as well. I’m curious, how did your learnings from the podcast influence this transition or vice versa? Like how did that relationship work?

Jack Newton:

Yeah. So, as you pointed out, we shifted back in … March 13th was the date that we shifted all of Clio to a distributed work-from-home environment, and we closed our five worldwide offices. And today, on October 7th, those offices remain closed and our entire workforce is working remote, working in this new distributed-by-design world. And another piece that I think we had felt like we had something to share from the Clio side of things—with a broader audience and something we felt the podcast would be able to help our listeners with—is an understanding of how you really navigate this world of distributed work and remote work. And Clio actually has working remote in its DNA. When we launched the company 12 years ago in 2008, my Co-founder Ryan and I were separated by over a 1,000 miles and lived in different cities in Canada, and today our workforce, even pre-COVID, was fairly distributed with multiple worldwide offices.

 

And many of our team that work from home were even—as I mentioned—before COVID hit leveraging cloud-based tools and cloud-based communication tools. Tools like Zoom and video chats, for example, were something that were already woven into our daily cadence and our way of operating. So we feel, in a lot of ways, we had an operating system built out for how you do distributed work and wanted to share that out with our listeners. We also, by the way, learned a ton over the course of doing the podcast from law firms and from individuals that had also been working from home for long periods of time and found ways of connecting personally with their colleagues of connecting with their clients of building interpersonal rapport of avoiding Zoom fatigue. So it was really kind of a great two-way street, I think, that we were able to establish on this podcast journey of sharing out some of our learnings, but also picking up some great tips and tricks along the way from our guests on the podcast.

Andrew Booth:

You know something that we sort of forgot to do here, which was a foundational question to at least, like, the first 50 interviews that you did it seemed, was asking the interviewee how they’re doing. So we’re curious, Jack: How are you doing in the context of all that’s happening?

Jack Newton:

So perhaps it’s something perverse about being an entrepreneur, but I actually find all of the change and the accelerated pace of change that COVID has brought along to be really invigorating and energizing. And I know that sounds like a bizarre thing to be saying—against the backdrop of, obviously there’s so much illness and health issues and death in the United States and Canada and around the world as well as the economic devastation that’s accompanying the health crisis of COVID-19—ut at the end of the day, I think there’s a lot of cause to be optimistic about some of the long-term shifts that COVID-19 that will help bring about to the world at large, and the legal industry in particular.

 

And I think it’s helping accelerate the change that needed to happen. And in the case of some areas like the courts, for example, driving change that may have never happened if it weren’t for the grand experiment that COVID-19 has kind of forced the world into. So, that is what I remain optimistic about. And that’s what my daily energy comes from basically, I guess—thinking about how can we try to drive some positives out of this crisis, and how can we try to turn what is obviously a negative on so many fronts into a set of positive changes for clients, for lawyers and for access to justice as a whole.

Derek Bolen:

Yeah. With that in mind, Jack, you personally, and Clio as a company, have kind of been advocates for these foundational changes in the legal industry for quite some time. How does it feel to kind of witness those changes taking place, even if it was something like COVID that ended up driving them?

 

Yeah. I think it’s been validating on one front. I think we’re seeing that many of the changes we thought would eventually come to legal are actually arriving earlier than expected, which is great. And I think those changes, by the way, are exciting for a few reasons. They’re not just technology changes or technology adoption. These are underlying changes that will actually help drive access to justice, will help bridge what I describe as the product-market fit gap between lawyers and consumers today. And that ultimately will make lawyers more successful and help make their clients happier and more satisfied with the legal services that they’re delivering. I think even foundational changes like more lawyers working from home, law firms working in a highly distributed way, collaborating with our clients over Zoom call as kind of a standard mode of operating—These are all things that I believed would eventually take place in legal and changes that would eventually happen, but they’re changes that have ended up happening probably a decade or more earlier than I thought they would. But this is good news, because the future we were imagining was a better future for lawyers and for clients, and that’s just arrived early and it’s arrived also against a context where there’s a tsunami of legal issues, building and that need to be addressed over the course of the months that follow COVID-19. And when we eventually get on the other side of this, there’ll be an enormous backlog of legal issues that need to be addressed. And there will be consumers that are less willing and less able than ever to afford the traditional mode of consuming legal services. So if you’re a lawyer that’s ready and able to innovate, it’s an enormously exciting time to be thinking about how you meet the demand that will be forming over the coming months.

Sam Rosenthal:

Yeah. So Jack, to recap a little bit, and I won’t go through all of it, but when we started, you hadn’t ever been a podcast host before. How does it feel now to be reaching episode 100? Did you ever think we’d get to this point?

Jack Newton:

It’s kind of hard to internalize actually. I don’t know if you guys feel the same way, but it doesn’t feel like it’s been 100 episodes and maybe all forms of time over the course of COVID. My sense of doing these podcasts has kind of blurred together a little bit. I’m kind of amazed and proud of the fact that we’ve hit episode 100, and likewise you guys, I hope you feel the same sense of accomplishment. There are a lot of podcasts in the world and there are not many that have made it to episode 100. And I think what I was maybe most happily surprised by is just how deeply insightful I’ve found so many of the conversations we’ve had to be in. And not that I wasn’t expecting this to drive some interesting conversations, but maybe in the way that it’s changed my own perspectives on some really meaningful issues, is something that has been a happy surprise for me.

And the fact that you can have some pretty profound conversations in a 30- or 45-minute container, I think is another insight for me. The format of a podcast is also, I realized, a little bit of a superpower—in terms of driving an interesting conversation with somebody. In that if I sat down with almost any one of my guests that I’ve had over the course of the last 99 episodes, that conversation would play out in a completely different way. If I was just to say, let’s jump on a Zoom call and talk for 35 or 45 minutes. With a podcast format, I’m able to drive to really deep and important questions right off the bat. And be curious in a way that I think is very hard to be in a kind of standard issue, social conversation. So the information content as a result is super high.

 

I think there’s a level of directness and, like I said, almost a level of information content that is quite different than your average conversation. And it’s a great excuse to have a conversation with somebody, by the way, as well. We all find it hard to carve out time in our day for ad hoc conversations, but structuring the time around a podcast I found … Those were 100 conversations that I probably wouldn’t have had over the course of the last six months, if it weren’t for the podcast. And I’m thankful for having had the opportunity to have every single one of those conversations.

Sam Rosenthal:

Yeah. I think that it’s really interesting what you’re saying about, just the value of having those podcast conversations. And to recap for our guests a little bit, you’ve interviewed on this podcast Seth Godin, Angela Duckworth, Shaka Senghor, David Lat, Ken White aka Popehat, Richard Susskind, Paula Davis-Laack, Brian Cuban, Jeena Cho. You’ve spoken to the Global Chairman of the world’s largest law firm, president of the ABA, the chair of the ABA’s COVID task force, president of the New York State Bar, and the future president of the Law Society of England and Wales. And you’ve welcomed so many lawyers, founders, CEOs, legal consultants, social justice advocates, and other figures at the intersection of legal and tech. When we were starting this out, I mean, did you think that we would get this kind of robust connection of people from all different walks of life and worlds? For me, certainly this is more than I expected.

Jack Newton:

Oh, it’s way more than I expected. And I think what’s so interesting is if you rewind to even what we thought we would be covering with the podcast back in March when we launched it. We were really laser-focused on COVID-19 and the collateral impacts around COVID-19. And I think what’s played out in the last six months—nobody had in mind what was in store for the world over the remainder of 2020. We’ve had such a huge spotlight that got shown on the Black Lives Matter movement. We’ve had one of the biggest social movements and civil rights movements since the 1960s and perhaps ever. We’ve seen obviously widespread economic devastation, affecting different people in materially different ways, and got a chance to explore that. We did a deep dive on systemic racism and, in particular, how that continues to persist in the legal system in the year 2020, and in a lot of ways has not seen the progress that even other industries and other spaces of our society have seen over the course of the last decade.

 

And we drove some really important conversations, and again, some insightful conversations for me over the course of the last six months, that, again, we had no idea these would be the issues that would be coming to the fore over the course of 2020 when we launched the podcast in March. But again, I’m glad that it created a venue for us to have those really crucial conversations because they certainly enriched my perspective on some very key issues. And likewise for our listeners, I hoped it helped advance their thinking on those issues as well.

 

Above and beyond those issues that came to the fore over the course of 2020, I think we actually did a great job of touching, not just on COVID-19 and how lawyers are navigating the immediate crisis that COVID-19 is presenting, but how they can be thinking more strategically about embracing technology, business practices, and health practices to evolve their business model and to avoid the risks of burnout, avoid the risks of various types of mental fatigue that are afflicting so many of us today. And conversations with, for example, you mentioned Paula Davis-Laack, unbelievably insightful perspectives on how we can maintain our mental energy and avoid burnout and so on.

 

So certainly some topics and perspectives that, when we launched this March—and I think many of us thought this is going to be three months of COVID, and then we’ll get on the other side of this—it’s obviously turned into something that will be with us for many months to come, perhaps years to come, finding new ways of kind of reframing and rethinking. “What does it mean to navigate COVID?” has certainly been one of the themes of the podcast, and again, enormously helpful to me and hopefully to our listeners as well.

Derek Bolen:

Yeah. I’m almost nostalgic for going back to the days where it seemed like this was just going to be a three-month thing and then—

Jack Newton:

Exactly. Exactly, it will be gone by June.

Derek Bolen:

Yeah. So Sam covered it a little bit, but the most surprising thing to me was that this podcast ended up being the vehicle to have just the breadth of guests that we’ve had on. Like you’ve talked to regulatory body leaders, you’ve talked to social justice and mental health advocates all the way down to solo attorneys on how they were navigating this situation. Over the 100 or so conversations you’ve had, what are some of the most important things you’ve learned about the state of the legal industry? And maybe you can touch on how that’s led to a shift in, and how ClIo as an entity is approaching the next five, 10 years?

Jack Newton:

I think what came through so loud and clear in the conversations as we headed to COVID with lawyers that were facing this new reality of delivering legal services in a COVID world, was that the requirements of what they needed from their technology really shifted 180 degrees almost overnight. And if you look at the way … to your questions about how did this impact almost my perspective on what Clio needed to do and in particular, what our product team needed to navigate this change: It really amounted to us feeding the roadmap we had for 2020 into the shredder and rethinking from the ground up. What does Clio look like in a COVID world? And what does Clio look like in a post-COVID world? And in particular, how do we enable law firms to truly move to being cloud-based?

 

And when we talked about being a cloud-based law firm or using cloud-based technology back in 2008, when we launched Clio, it was really focused on this idea of moving your on-premise software into the cloud. So you’re moving your practice management software from a server to the cloud and accessing it through a web browser, and that was kind of moving to the cloud. Moving to the cloud in the year 2020, and I think, COVID has helped to accelerate this change that was coming eventually, but it certainly arrived now. Being in the cloud means you are more fulsomely moving your entire law firm operations to the cloud. You are delivering legal services to your clients through the cloud. You’re meeting with them in the cloud over Zoom call. You’re acquiring your clients online. You’re delivering your work product to your clients online, they’re signing legal documents online with e-signature. You’re billing your clients online and getting paid online. You’re collaborating with your colleagues online in a highly distributed way.

 

And obviously supporting all of that has profound impacts for lawyers and how they operate, the capabilities that they expect from Clio, which really is to enable a cloud-based law firm to operate effectively. And, lastly, I think it also helped for us … We realized that this shift was more than just a product shift. There was a whole bunch of education and help that needed to be deployed to law firms to help navigate this change. Because, this is not just embracing new technology. This is embracing a new world of work. This is embracing working with your clients in a completely different way, it’s embracing the way of working with your colleagues in a completely different way. This for a lot of law firms was embracing a model where they’re needing to trust their employees in a completely different way.

 

You’ve got employees working from home, working on a laptop that you’ve got new security considerations. How do you ensure that your client data is safe and secure in this new distributed world? So we likewise invested in what we termed internally as, project ether, but this broader effort to help customers navigate to the cloud, not just from a technology perspective, but from a workflow and working with our employees perspective, how do we make that shift effective? And how do we help make our customers successful in making that shift?

Derek Bolen:

All right. So maybe pulling at that thread a little bit and looking forward a little more, it’s a pretty common refrain that I’ve seen all across a lot of industries, but it’s kind of building a new future versus just going back to the way things were. With that in mind, what does a re-imagined legal industry look like to you? And how is Clio going to help the industry get there?

Jack Newton:

Yeah, great question. I talk a lot about the concept of, “Let’s build a better normal, rather than just a new normal.” And I think what COVID has helped all of us realize is that, there were a lot of ways that we were stuck almost in the way we were delivering legal services—huge amount of inertia that existed around the status quo for the delivery of legal services, that got put on its head overnight with COVID. I think part of what should become our new normal and our better normal is embracing all the things we’ve realized that actually work better in this new world. And that’d be an example, for example, we’ve seen that Zoom calls can really effectively replace so much of what might’ve been done face-to-face, in-person in a bricks-and-mortar law office.

 

I think one of the changes we’ve seen that will be a permanent change—at least for the more innovative law firms out there—is a realization that maybe they don’t need their bricks-and-mortar law office anymore. Or if they do still need some form of bricks-and-mortar law office, the reason that bricks-and-mortar law offices exist and the way that they use the space will change dramatically. I think we’ve seen from the client side, by the way, a realization that they actually, likewise, prefer interacting with their lawyers online. They like the seamlessness, for example, of e-signatures over a wet signature. They prefer a Zoom call over having to get in their car and commuting to their lawyer’s downtown office, and paying for parking, and waiting in a lobby and having, what might be a longer meeting than necessary to really advance their legal matter.

Jack Newton:

I’ve heard some clients comment on the fact that they feel like they’ve been getting better service from their lawyers over the course of the COVID-19 pandemic, because they’d been more responsive, traveling less, more available, stuck in fewer meetings. And what they see by the way is, if I’m getting better service, why don’t they go and walk away from that million-dollar lease that they’ve got in some expensive downtown AAA office space, and pass on those savings to me. So I think those are some of the structural changes that we’ll see as permanent outcomes of COVID-19 that again will be, I believe ultimately positive changes for the legal industry. And when we start eliminating some of the needless overhead that exists in the way that legal services are delivered today (and physical office space is a great example of that), those savings can be passed on to consumers and also shared by the lawyer.

 

And we can end up in a situation where lawyers are actually more profitable, making more money, but still able to deliver legal services at a more cost-effective rate for consumers than they were able to previously. I also believe the other shoe yet to drop with COVID-19 is the economic strain that so many consumers are experiencing, coupled with a surge in legal matters that consumers are experiencing. And we’ve seen this come through very clearly in our latest Legal Trends Report data. Those two factors are going to coalesce in a way that forces lawyers to reconsider how they bill clients, how they price and package their legal services. We’ve talked about the death of the billable hour for 20 or 30 years in the legal industry, and I think COVID-19 might be one of the factors to finally put a nail on that coffin, because it’s very clear that the billable hour model will not work for consumers that are experiencing this kind of economic strain.

It’s the huge opportunity, again, for innovative lawyers to separate from the pack and to think about new and innovative ways of pricing and packaging their legal services. And I want to underscore a super important point here: This doesn’t mean making less money, either. What we’ve seen repeatedly in our conversations over the course of the last six months on this podcast is the lawyers that are finding ways of pricing and packaging their services with innovative subscription models, for example, or fixed fee models, are making more money and have more predictable cash flows than they were previously. I think that’s a misconception that many lawyers have that making their services more accessible means that they will be making less money in themselves, and that’s simply not true.

Sam Rosenthal:

Right. And Jack, you’ve touched on some of these things already a little bit, but tomorrow you’re going to open the all-virtual 2020 Clio Cloud Conference with your keynote presentation. Without giving too much away, what are some of the main topics you’ll be speaking about?

Jack Newton:

Exactly what I’ve just spent a few minutes describing actually, which is going to be a vision for what the future of legal looks like. What changes we’ve seen COVID-19 accelerate, and which of those changes that I believe will be enduring changes and what opportunities these changes ultimately present lawyers with. And one of the takeaways from my opening keynote will be that periods of change and transformation always present opportunities for people to innovate, and COVID-19 is no different. And for the lawyers that figure out a way of assimilating this unbelievable amount of information, and taking advantage of the opportunity for change, there’s an enormous outcome available for them. To make a positive impact on their law firm, to make a positive impact on their clients, and to make a positive impact on access to justice.

 

And that will be the call to action as we head into the remaining four days of Clio Con, just take advantage of the information being presented. We’re going to walk through our 2020 Legal Trends Report. Talk about some of the key findings from the new Legal Trends Report. We’ll also be talking about a set of new product capabilities that we’ll be announcing at Clio Con as well, and equipping lawyers with all the tools they need to go out and succeed in this crazy, uncertain world that we’re all navigating right now.

Derek Bolen:

So Jack, something that you personally, and Clio as a company, has been really laser-focused on over the past year has been this philosophy of client centrism and building a law firm that pays more attention to the needs and wants of clients. What are some of the most glaring and obvious ways that you’ve seen the COVID crisis, but anything over the past year impact client perceptions and client needs for law firms? And what are some of the greater opportunities for law firms to be client-centric in this current climate?

Jack Newton:

Yeah, it’s a great question. And, I think the idea of being a client-centered law firm is really making sure that the way you’re delivering your legal services or a bit around what your client’s actual needs are, and to put the work into, by the way, actually understanding what your client’s needs and wants and desires are. To build empathy for them and to understand the broader context that they’re trying to navigate in their personal life and what kind of problem they have, that you’re there to help solve. And I think all of those concepts are more relevant than ever in the COVID-19 landscape that we’re all navigating today.

 

It’s important for every lawyer to realize that, even if they had gone through the exercise of becoming client-centered in … On, or before February, of 2020, realize that you need to restart that process from the ground up, in a COVID world to understand, what is the new context that your client is getting? How can you recalibrate and redeploy your legal services to meet the needs of your clients that they have today? And for law firms that were maybe not very client-centered prior to COVID-19, this is a great opportunity to tear up everything about how you were delivering legal services before, and reinvent and reimagine the way you’re delivering legal services in this COVID-19 world.

 

And the last thing I’ll comment on is, what we’ve seen is that the law firms, and then we see this very clearly in our new Legal Trends Report data as well, law firms that exhibit behaviors that demonstrate that they’re client-centered have seen significantly better performance over the course of COVID-19 than their peers who are not. And I think that’s a very clear signal to pay attention to that, that this is one of the keys to success. And if there’s ever been a moment in the history of lawyering, that being client-centered is a transition and a shift you should make, COVID-19 is presenting us with that opportunity.

Andrew Booth:

Well, Jack, just like how the last seven months have flown by, so have the last 40 minutes, it seems. As is tradition, we’ll have to circle back for a follow-up episode. How does that sound?

Jack Newton:

Sounds good.

Andrew Booth:

So much to cover and again, flipping the script here, you often ask your guests, what message do they have for our audience or the broader legal industry in general, what is your message for our listeners?

Jack Newton:

Yeah. I think my current perspective on that, Andrew, is really that I want the optimism that I talked about at the onset of this interview to be something that, maybe I’ll call back to and re reiterate, which is despite the fact that there is an enormous amount of uncertainty out there, and obviously a set of negative and depressing headlines that all of us are looking at every day. Don’t forget that there is an enormous need for lawyers out there today. There are all forms of social injustice, COVID-related issues, and non-COVID related issues that consumers are struggling with today and need lawyers that have empathy for those problems, to help them navigate to a solution. The opportunity now is to be client-centered and to rethink about how you’re meeting that need, and how you’ll be meeting the forthcoming tsunami of legal need.

 

Maybe the metaphor to use here too, is I think while some law firms feel like the last six months have gotten quieter for them, I really believe that’s the water going out before the tsunami hits. We are going to see a huge spike in legal needs in the coming months and in the coming years. And we need innovative lawyers to figure out how to stand up and meet that demand, using methods of delivering their legal services that are innovative and different than they were previously. And the last thing I’ll comment on is that there is an unbelievable opportunity to experiment right now. And this is something that shouldn’t go on set, because there’s been so much inertia. I think traditionally around the way legal services are delivered, partially because of concern around how consumers will react to changes in the way that they expect legal services to be delivered.

 

And the reality is that with, again, thanks to COVID, everything’s been turned on its head and consumers are pivoting and adapting to huge changes in every aspect of how they experienced their daily lives. And changes in how they access and consume legal services, are changes that they will not only expect, but they’ll welcome those changes. So look at this opportunity as a rare, not even once in a lifetime, but really once in multiple generation opportunity to pivot and to innovate and to try new things, and to have permission from the marketplace and permission from your peers to experiment and innovate. So that’s maybe the closing thought. I’ll leave us with Andrew.

Andrew Booth:

Great note to end on. As you said—

Derek Bolen:

Yeah, that is a fantastic call to arms for the broader legal industry. Jack on behalf of the three of us, we want to thank you for taking the time to chat with us today, and also thanks for the opportunity to work on this podcast and kind of bear witness to the conversations that have taken place over the past 100 episodes. I know personally—

 

Jack Newton:

Sorry Derek. Similarly, I was going to say thank you to the three of you for doing such a phenomenal job of producing this podcast over the course of the last six months. It’s been one of the highlights of my career at Clio. So thank you for that as well.

Derek Bolen:

You are extremely welcome, really looking forward to your keynote tomorrow and the longer Clio Cloud Conference. I think it’s going to be a very transformational event for the legal industry as it often is.

Jack Newton:

Thanks for joining us on Daily Matters, a podcast from Clio. Rate and review wherever you get your podcasts and subscribe so that you never miss an episode. Daily Matters is produced by Andrew Booth, Sam Rosenthal, and Derek Bolen, and hosted by yours truly, Jack Newton. Thanks also to Clio, the world’s leading cloud-based legal technology provider for supporting this podcast.