
Legal Tech StartUp Focus Podcast
The Legal Tech StartUp Focus Podcast covers the startups that develop and sell legal tech products and services. Through interviews with legal tech startup founders, investors, customers and others with an interest in this startup sector, the podcast's host, Charlie Uniman, and his guests will discuss such topics as startup management and startup life, startup investing, marketing and sales, pricing and revenue models and the factors that affect how customers purchase legal tech. In short, the Legal Tech Startup Focus Podcast will focus on just what it takes for legal tech startups to succeed.
Legal Tech StartUp Focus Podcast
Legal Tech's Boundary-Breaking Veteran - An Interview with Monica Zent
Monica Zent joins us to share her journey as a seven-time founder and legal tech pioneer who has been at the forefront of innovation for nearly three decades. She discusses her evolution from creating some of the earliest ALSPs to investing in and advising the next generation of legal tech startups.
• Starting as an entrepreneur in the 1990s with domain name and music industry technology companies
• Founding Zentlaw 23 years ago as one of the first subscription legal services for enterprise clients
• Creating early legal tech tools, including AI chatbots and collaboration platforms before they became mainstream
• Investing in legal tech for the past 12 years and now partnering with venture firms to evaluate opportunities
• Taking a contrarian view that legal tech is broader than commonly perceived, encompassing regulatory compliance, IP, and adjacent sectors
• Advising legal tech founders to identify real problems worth solving now
• Helping law firms and legal departments navigate digital transformation with appropriate governance structures
• Identifying integration opportunities between legal tech and adjacent technologies like fintech and cybersecurity
• Working through Law Innovation Agency to consult with corporates, big law, and government agencies on innovation
Connect with Monica on LinkedIn (linkedin.com/in/monicazent), check out Zentlaw (https://www.lawinnovationagency.com/) and Law Innovation Agency online (https://zentlawgroup.com/), or subscribe to her Venture Legal newsletter on LinkedIn.
Welcome everyone to the LegalTech Startup Focus podcast. Let's welcome our podcast guest today, someone who, as I've said to her in an email preceding the podcast, wears many, many hats in legal tech, all of which we're going to have the guest describe, and that guest is Monica Zent. Welcome, monica.
Speaker 2:Hi, charlie, it's great to be here on your podcast. Thank you.
Speaker 1:Yeah, I am the honored one here having Monica who, as I said a moment ago, does a lot of things that are legal tech and other tech related, including heading up an ALSP, managing an application that enables communication by lawyers and others in connection with their client relations, and being overall a consultant to LegalTech's startups in the space. So let's have you give us a little bit of background about you professionally and then we'll segue from that to describing what roles you now play professionally in our beloved LegalTech vertical. So take it, monica.
Speaker 2:Okay, sounds good. Thank you. Well, I would say I've been an entrepreneur for nearly three decades. I started some of my earliest companies even before grad school. One was a domain name company which I created in the 90s mid-90s and then sold that. I worked in the music and entertainment industry and created a product laters mid-90s and then sold that. I worked in the music and entertainment industry and created a product later on, several years after that. That was mostly kind of a big data. Before big data was a thing and it was really around rights management and catalog information and song license database sort of information, and really it didn't exist at the time. There wasn't a centralized database for this information. So I amassed this large database, created that and then sold that. That got me into some investing real estate investing and other investing, continued on sort of with the founder mentality, but also spent some time working in-house at in-house companies in that sector and then in a large law firm, and it was through that experience that led to the creation of then eventually, an ALSP, which is Zentlaw, which has been around for 23 years.
Speaker 2:At the time I discovered that the market really did not have a concept around subscription, legal services for the enterprise and sort of the flexible legal talent model. These have practically become ubiquitous now in our industry, but 23 years ago they were not, and so it was kind of one of the early pioneers, along with a few contemporaries, building this category of ALSP Alternative Legal Services Provider Also, probably about 13, 14 years ago, became one of the earliest female legal tech founders, beginning to create technologies that were designed to help our clients do more with less and be efficient. We were doing some legal ops work at Zentla long before legal ops was called legal ops, so had an opportunity to kind of start to see some of these challenges that clients were having and then building technology around it. Back then some of those early technologies were a little early to the market, but they were great opportunities to begin to sort of test out tech for the market. We also created products like various AI chatbots, a clause engine that had some AI components to it. Again, this is early AI, so we're talking eight, nine years ago, which, as you can imagine, pre-llms that we have today.
Speaker 2:The output wasn't what I had envisioned, but was still quite good for the NLP and machine learning technology.
Speaker 2:We had at the time Also created a company called Lawdesk 360, which is an AI-powered collaboration technology Again pre-LLM but was still used by in-house legal departments and we had some legal associations as well as some firms on there.
Speaker 2:And so during this time, the last several years, created also other tech offerings through Zantlaw Labs and fast forward to sort of the last five or so years, I've been more aggressively investing in legal tech.
Speaker 2:I've been an angel investor in legal tech for probably the last 12 years, but last five have been sort of stepping more into that role of looking at legal tech investments and now today kind of partnering to some degree with venture firms and those in the venture marketplace to help sort of evaluate and look at the sector right with legal tech in terms of where investment opportunities lie large law firms so the big law contingent of our market, some corporates, government agencies around digital transformation, how they can effectively leverage legal tech and AI to do more with less and innovate their business and what they're offering. So I'm really excited about some of the work through Law Innovation Agency as well, as well as the work that we continue to do at Zant Law and then the work that I'm doing on the venture front in terms of helping to play a role in helping to fund the next generation of great legal tech founders.
Speaker 1:So put your investor hat on and tell me what you're most excited about as you look at the number of legal techs that are out there at early stages, at late stages, looking for funding.
Speaker 2:Yeah, yeah. Well, as you know, and like you, I've been in this space for a really long time and as an investor, angel investor, I mean I've been investing in legal tech for 12 years, so way, way back. You know, 12 years ago, I mean you're correct, people in venture weren't really paying attention to legal tech as much. But yeah, there were very small contingent of us that were kind of able to see sort of out in the horizon what was going to be coming. And I would say right now it is a very exciting time.
Speaker 2:I mean, first of all, having been a founder seven times over, with some exits under my belt, I do really like the founder kind of early stage journey. I like working with founders, I like advising them, I like sort of the building phase. So I would say, from an investor perspective, I am most interested in that early stage because I can identify with it a lot, not only from sort of that founder perspective, but also having been an operator and working with companies throughout the years that are at various stages of growth. At Zantlaw we work with, of course, fairly large enterprises, but we also work with companies that are venture-backed startups that are growing and have grown really fast and sort of seeing those progression through their various stages. So I can kind of wear both hats and I enjoy that as an investor and as an advisor and I would say that right now, yeah, there's just tremendous opportunity. I know we can talk more on this podcast about that, but tremendous opportunity in our space on the legal tech front.
Speaker 1:And do you, outside of Zendlaw, do you do your own consulting with startups, or is that something that you haven't taken on yet as a separate Sure?
Speaker 2:Well, I'm involved with Law Innovation Agency.
Speaker 1:Oh yeah.
Speaker 2:Yeah, yeah, I'm involved with Law Innovation Agency and so there is a component of Law Innovation Agency's offering that works with legal tech startups Anything sort of again speaking broadly around legal tech, anything sort of legal tech, legal tech adjacent working with them to help them primarily with their go-to-market sort of that domain expertise background. Sometimes you'll find and I think you'll probably find a lot of this, I know you cover this heavily with your newsletter that there are a contingent of legal tech founders. They will come to Law Innovation Agency for that kind of support, and so we have a great advisory council that can help support them.
Speaker 1:And is Law Innovation Agency like a venture studio? Does it make its own investments? Is it best understood as an incubator or is it just offering fee for service when it comes to consulting and helping legal tech startups figure out how to get product market fit and market and the like.
Speaker 2:Yeah, yeah, great question. No, it's not a venture studio, it's not an incubator, it's primarily consultancy and again the consultancy working with corporates, big law, government agencies. But also there is a contingent there of is eating the legal tech world.
Speaker 1:A lot of what you must be doing with the Law Innovation Agency, insofar as enterprise and law firm advice goes, is telling them how the hell do you use this stuff? What are the use cases? How do you get people involved? How do you do change management? Is that what you're partially doing?
Speaker 2:Yeah, there's some change management in there. I mean, digital transformation by its nature involves change management, and that tends to be sort of the focus for some of those types of projects is really around the digital transformation. So what needs to be done to innovate this organization or this legal function? What should they be doing differently? What could they do better? What is that like and with a heavy tech and AI-centric lens around that, and how could AI and tech be leveraged effectively? Where does it make sense? And also, what are the governance structures and policies that need to be in place to do that?
Speaker 1:Yeah, that's often neglected, I think. Well, I neglect it too often. But once you're going to layer in a brand new platform or set of apps that take advantage of this new world of of Gen AI, the playbook just isn't there for for most firms.
Speaker 2:Right.
Speaker 1:And assisting legal law firms and enterprise in-house departments to help them draft that playbook.
Speaker 2:Yeah, really drafting in terms of, from a matter of first impression, really helping clients navigate this space when they're looking at these digital transformatives. What does that, what do those policies and that governance need to look like within the organization around the use of AI and the adoption of AI? And not sort of as roadblocks or anything like that, but really guidelines, road signs and guardrails of anything.
Speaker 1:Well, I understand, having worked in law firms all my professional life, that the law firms have to be cautious. Sometimes they are too cautious, but they have to be cautious with all the privacy, confidentiality and everything from that and insider trading. Who knows what obstacles not I wouldn't say obstacles, but understandable regulatory impediments to just adopting things without having playbooks in place. So it makes perfect sense that Law Innovation Agency is being called upon to help them with that. One of the things I asked Monica when we were emailing back and forth before hitting the record button and I haven't really asked this question before. So Monica is going to be my guinea pig If you take a contrarian view on anything and everything that pertains to legal tech, what do you think your most contrarian are? What do you see that you think the conventional wisdom doesn't see? Do you have a view on that?
Speaker 2:Well, sure I do have no shortage of opinions in the legal tech sector and ecosystem, but sure I could share one on the contrarian front, I would say, and maybe an appropriate answer, given it's the first time you're asking this question of one of your guests. But I would say that one contrarian view, perhaps contrarian to some of the venture community, is having a broader view of what legal tech is and what it is. Legal tech has been viewed and to some degree maybe it's still viewed a bit by the venture community as very narrow and niche and in fact even maybe crowded, because they're just kind of seeing the CLMs you know, all the CLM funding activities happened in these recent years and sort of this very narrow lens around what legal tech is. And I have a much broader perspective of legal tech. Legal tech, the legal function in general, as you well know, touches so many different areas. I mean you've got regulatory compliance, you have intellectual property, you have sort of regulated sectors, you have areas like the financial services industry and banking or healthcare or education, where you have extra layers the financial services industry and banking or health care or education where you have extra layers of regulatory oversight on top of the typical corporate regulatory oversight. And then you have other areas that sort of transcend the legal realm. Insure tech is one. Sometimes we see this with fintech. So these areas is sort of from an enterprise B2B investment thesis. That's where my focus tends to be.
Speaker 2:And when you look at legal tech, there are a lot that are legal tech, slash, legal adjacent. Even cybersecurity, which is really popular and hot right now, probably will be for quite some time, will be for quite some time. Cybersecurity intersects heavily with legal. To some degree it's somewhat legal adjacent, depending on certain aspects of what you're solving for and on all these relate. I mean, if you have a again, if you have a cybersecurity issue, then you're going to have a compliance challenge, most likely in potential legal issues. Or if you have a compliance issue or you're out of compliance or privacy issue, then you could run into, of course, legal issues, class actions, fines and penalties, and so these are all interconnected and I have a broader view of legal tech and as well as sort of a broader perspective on what the opportunity looks like.
Speaker 2:I mean just kind of looking at legal tech adjacent. I mean we've got you know, like a lot of fintech companies are out there. There was sort of a large fintech company called Zip, which raised $190 million in a Series D led by Bond and that could be considered legal tech adjacent. So I believe it's somewhat perhaps contrarian to take this view that legal tech is. It's actually much broader than people are led to believe and the space is in fact not niche. It's not crowded. There's still a lot of opportunity there.
Speaker 1:And I would think the opportunity also would extend, not just from an investment perspective although that's very important but also in terms of partnerships and business development arrangements that legal tech companies, even viewed narrowly, might want to make with some of these adjacent areas of technology. And one piece of advice I might give to some legal tech startups is to, when you're looking for partnering and you're looking for cross-marketing, don't neglect and take a page from Monica's contrarian book here. Don't forget the other adjacent texts out there. That would be really a great way to cross market and maybe even find synergies can be had both in developing the technologies themselves, let alone marketing together. So, yeah, wonderful, I like that contrarian view and I'm sure it plays out particularly well as an investor in early stage companies. Yeah, thank you. In early stage companies. Yeah, thank you Flipping the coin here.
Speaker 1:Having talked to Monica just now about contrarian views, another question that I posed to Monica was okay, what are you particularly enthusiastic about? What do you have a really strong conviction about? About what do you have a really strong conviction about? If you ride a hobby horse in the startup world of legal tech and legal tech adjacent, as an investor, as a founder, as a consultant. What do you want? To express strong convictions about that you think gets ignored too much.
Speaker 2:Yeah, well, I mean other than AI, which we know is not ignored too much these days, but that is my big hobby horse at the moment. I guess would be yeah, not, maybe there isn't as much attention being paid. I would say there, I have several sort of thoughts on this. I mean, one would be certainly or several hobby horses, if you will One would be kind of the opportunity for in-house legal teams to open up more to use AI-driven tools and looking at their outside counsel guidelines that will allow for that more sort of opening up this perspective that if they're going to sort of effectively use AI, they could use it and adopt it within their in-house department but also leverage their external partners to do so and sort of freeing up the ability to do that from a policy perspective. That's something that I've observed and I believe that that's something that corporate law departments should kind of take a fresh look at. I believe that big law has latent opportunities to continue to use AI and drive more efficiencies, but also to continue to tap into the world of ALSPs such as Zentlaw to do more with less, to offer alternative sort of lines of business to their clients where they could leverage an ALSP such as Zentlaw to do that. Big law has still not fully tapped into the ALSP market and I believe that there's a significant opportunity and even in fact, speaking with some CIOs of large law firms that I know, or CIOs or chief innovation officers of big law entities, folks that are in my network, I know that they're open to this and they're just beginning to think about how they could better partner with the LSPs. So that to me is another latent opportunity and a hobby horse.
Speaker 2:Those creating legal tech companies look at what's legal tech adjacent and how can that be. Maybe it's integrated, not even just cross-marketing, but is there an integration capability there that can drive sales and drive adoption but also can drive a cleaner, more streamlined use case within the organization? And we see this sort of on the consulting front with organizations that bring in these different pieces of technology and then sort of how do you stitch it together? How do you pull the data from one piece to another and integration departments or parts of a company, but maybe not so fully thought out for the legal team? So as you look at sort of what is that legal team tech stack? How can we better integrate this tech stack? Do the tools speak to one another. Do they make sense to interoperate together? And really looking at that more holistic view of how do we offer the end user a more cohesive solution? And I feel that that's often been neglected in the planning phases and some of the organizations and how tech is being brought in.
Speaker 1:So looking at that, no, I was going to say your point about integration of the legal tech adjacent with the what I'll call for one of a set of better words strictly legal tech, more narrow legal tech, is an excellent one, because I think both the adjacent techs and legal tech can learn from one another.
Speaker 1:You know, when it comes to how data is handled, how privacy is dealt with, they should talk to one another because they both deal with data and privacy and confidentiality in similar ways.
Speaker 1:And as far as outright integration goes, you're absolutely right. I think that there is an opportunity for a legal tech startup or a law firm that's building its own legal tech to say to a fintech hey look, our clients might want to have both of us in their tech stack. Let's figure out a way to integrate actually technically so that when they do use both of us, if there are ways in which we ought to be aware of what each of us is doing, there are APIs in place to make that happen. So I like that point a lot. And as far as going to law firms and say, pay more attention to ALSPs. To law firms and say pay more attention to ALSPs, I imagine you'll agree that you know the re-engineering of law firms, big and small, but even big law is going to happen in the face of this onslaught of Gen AI. And as they re-engineer, that's going to touch their business models.
Speaker 2:Yes, exactly. I mean, I've been sort of beating this drum for over 20 years and so it is finally happening. And it is happening with Gen AI, and it will happen to a greater degree and faster than it has over the past couple of decades. So I think we'll definitely see that. That's why we're there helping them sort of navigate that.
Speaker 1:Yeah, absolutely, with her role as an operator, founder and investor. I'm sure that the legal tech startup leaders, founders and their colleagues would love to hear what business advice you can impart in any particular area of their operation that you think they, by and large, don't quite get or stumble on. Is there some business advice that can help them get over the obstacles that you see them facing and not quite surmounting?
Speaker 2:Oh sure, great question, charlie. Thank you. Well, I could literally write a book for founders. Having been a founder many times over, I probably will at some point, and we do some of this for Law Innovation Agency where, again, aside from working with corporates and government entities and big law, also work with legal tech founders as well, in sort of on certain areas of what they're tackling. I would say a couple of key takeaways for founders, especially in the legal tech sector and again taking a broad perspective of legal tech, legal tech adjacent as well. First, making sure there's a real problem that you're solving and you can identify that clearly. I always like to see that as an investor on a pitch deck, but also really having the founders articulate that could be a problem that exists but doesn't need to be solved right now. Right, I mean, if not then that could present a timing issue, sure Right.
Speaker 2:So that's a common challenge and we've all been there as founders. I mean, I've had early legal tech companies that were just ill-timed. So it can happen. And so you have to look at is the problem you're solving a problem to be solved right now? The other, I think, key problem type of question or analysis is is the problem that you're solving a problem that is worth solving right now, and, in other words, is it a nice to have or a must have? How is this going to be viewed by your customer base? And so really being able to sort of look at, identify and speak to those two factors I believe is really important, especially as you're building a company and then, of course, secondarily, making sure that your product actually solves this problem.
Speaker 2:It's challenging in the early stage kind of environment. Sometimes there isn't a fully built product, that's not even built at all. I really like to see the product where I can, as much as possible, but really trying to understand does that product solve and meet that need and address that problem that you're trying to solve? What segment of the market are you selling into? How is the product positioned? There are a lot of legal tech startups that I've heard pitches from. Sometimes they're a little bit all over the map in terms of who they're selling to. They're not very clear. They may be sort of going back and forth between boutiques, big law, enterprise. They don't maybe distinguish between enterprise and big law and so, like kind of getting clarity on what segment of the market are you tackling?
Speaker 2:Or bringing in domain experts or bringing in somebody like myself, a domain expert and team of people that I work with too at Law Innovation Agency, but bringing people in that have the right domain expertise that can help you understand these different segments and how to tackle them, and really looking at how you would present that product to the market as well.
Speaker 2:Does your marketplace, your customer, have a budget for this product? If they don't, are you pitching to other functions within the organization that do? What's your strategy there? And then, lastly, I would say last piece of maybe founder advice, at least just for this podcast, would be, when you're meeting with potential investors, being clear about where you're at, kind of engaging in proper signaling around where you're at in terms of the product and kind of avoiding pressure to talk up the product, being frank and honest about where you're at with what you're doing and what you're building. You're building and also being mindful of what your trajectory is going to be as you tackle this marketplace, understanding that the legal marketplace is unique and it is a little different, in terms of how you tackle that marketplace, to really understanding that.
Speaker 1:All very important, especially since we have to acknowledge that many founders in legal tech were lawyers before they put on their founder's hat to use that phraseology again and go to market and product market fit and market sizing and all that is pretty alien to them. So I think your advice is very well put and if these legal tech startup founders who have successfully practiced law but never really managed a business before need some help, they ought to go to you at Legal Innovation Agency and get some expert advice, because it'll pay dividends in the long run. I can't thank you enough for spending the half hour with me here, and I would be remiss if I didn't ask if people want to get in touch with you, find out in greater depth what you do and where you do it. How can they best reach you?
Speaker 2:Oh great, yeah, Thanks Charlie, really a pleasure. Yeah, linkedin is great. So connecting with me on LinkedIn, messaging me through LinkedIn, that's always a great place to start. Also, we have, of course, zent Law. You can go to the web, find Zent Law. You can go and find lawinnovationagencycom. There's also my Venture Legal newsletter on LinkedIn so you can click and subscribe to that and keep in touch and up to date on what's happening, sort of in legal tech, because I cover a lot of that and a lot of those topics. So, yeah, we'd love to hear from any listeners and really great to be on your podcast and I'm honored to be a guest today.
Speaker 1:The honor is mine and, as I say at the end of every podcast, you're on the West Coast, is that right?
Speaker 2:I'm on the West Coast, yes.
Speaker 1:I'm on the right coast, so I invite you to give me a holler when you're in the New York City area, since I'm a mere half hour away. A mere half hour away, and I am told, as I've joked before, that New York City has a few good bars and restaurants, so I'm sure we could have a drink somewhere and enjoy that. But once again, thank you so much. Look forward to meeting you in real life sometime, and you were a delightful guest, and I can't wait to get this published.
Speaker 2:Thank you Likewise.
Speaker 1:Thank you Likewise.