Legaltech startup Clio has announced the launch of Clio Payments and a new fund, as the Burnaby-based unicorn joins a growing group of companies spicing up their SaaS offerings with a pinch of FinTech.
In an interview with BetaKit, Clio co-founder and CEO Jack Newton called Clio Payments “one of the most significant engineering and product investments” the startup has made to date. The CEO also referred to Clio’s move into FinTech as “a natural progression” towards its goal of building an “operating system” for legal clients.
Newton described payments as “at the heart of [Clio’s] operating system.”
To further accelerate that goal is Clio Ventures, a new investment fund through which the company plans to back early-stage partner companies working on integrations with Clio. Newton said the aim is in part to help make Clio’s offering a more “tailor-made solution” for various legal practice areas.
On the payments side, Clio previously offered Clio Payments powered by a third-party processor, Austin-based LawPay. But according to Newton, this offering was limited, and Clio saw an opportunity to build its own payments platform “from the ground up” and imbue it with more capabilities and a better customer experience.
Founded in 2008 by Newton and board member Rian Gauvreau, Clio provides cloud-based practice management, customer relationship management, and client intake software to the legal sector.
Clio unveiled Clio Payments and Clio Ventures as part of its 2021 Clio Cloud Conference, alongside a slew of other product announcements, including the launch of a mobile and desktop communication app for clients and cloud-based document management app.
These moves are the latest in what has been a busy year for Clio, which has acquired Lawyaw and CalendarRules, and raised a $136 million CAD ($110 million USD) Series E round led by T. Rowe Price Investment Management and OMERS Growth Equity, at a reported $1.6 billion USD valuation. According to the startup, this financing established Clio as the first legal practice management company globally to reach unicorn status.
According to Newton, payments are “at the heart of [Clio’s] operating system,” and “a really natural thing for us to own and to develop ourselves.”
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“It’s often the very end of the legal interaction, the end of the journey that orbits around payments, that is actually filled with a lot of friction for both consumers and for lawyers,” said Newton.
According to the CEO, many lawyers face difficulty billing and getting paid due to the use of outdated paper invoice and payment processes, while clients sometimes struggle to pay in a lump sum and have a hard time understanding fees, especially within the existing legal payment provider landscape.
Clio’s previous payments offering had limitations: it only accepted credit card payments, came with a slow onboarding process, required use of third-party sites and reporting systems, and a complex pricing model, all of which impacted customer experience.
As a result, Clio saw a “big opportunity” to develop its own solution to address these issues and make legal services more accessible, according to the CEO.
Clio Payments, which Clio has been working on for over a year, offers additional payment options, including e-cheque and credit card, a much faster onboarding process, a more transparent pricing model, real-time reporting on transaction volume, and enables law firms to permit clients to pay in installments.
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Clio Payments is currently available for United States (US) users. The startup plans to roll it out for its customers in Canada and other international markets over the coming months.
With Clio Payments, Clio has joined a growing number of Canadian software and retail startups that have moved into FinTech—a list that includes Montreal-based flight and travel booking app Hopper and commerce platform Lightspeed, as well as Ottawa-based retail giant Shopify. In addition to its payments play, Shopify has also made significant investments in companies serving its ecosystem, which it views as an important part of its platform.
Clio aims to fuel the growth of its own ecosystem through Clio Ventures, a fund dedicated to investing in and accelerating the trajectory of early stage legaltech companies building on Clio’s platform.
Newton, who described Clio as a general purpose practice management platform that delivers the common functionality all law firms require, said the startup’s application integration ecosystem plays an important role in bringing additional capabilities to the table.
Clio currently has over 200 integration partners, working on solutions like practice area-specific integrations for intellectual property lawyers using Clio that allow them to automate and streamline dealings with the US Patent and Trademark Office.
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“Those kinds of capabilities are really at the end of the day what help … give Clio superpowers, really, because they help make Clio a tailor-made solution,” said Newton. “Densities, integrations, and extension points can help round out [Clio’s core] capabilities and help make them more specific and more tailored for a given practice area.”
For years, Clio has supported this ecosystem through its Launch//Code prize, which grants $100,000 to a startup launching a brand-new integration on its platform. Newton said the competition has seen hundreds of applications over the years, and has helped lead to some of the best partners on its platform. But despite its results, Newton said $100,000 is “not the size of the funding that is really going to set up a startup for long-term success.”
Clio has already committed over $1 million towards the fund, and plans to begin making equity investments in early-stage legaltech startups through it in the near future. Newton said the startup has a large amount of latitude in terms of the size of its investments, adding that Clio intends to expand the fund as needed “to drive maximum impact.”
“This Clio Ventures concept is really built around the idea that Clio can have a direct hand in helping support the broader legaltech ecosystem,” said Newton. “As an established player in that ecosystem, we can help out with connections, we can help out with technology, we can help out with advice, and now with Clio Ventures, we can help out with direct financial support as well.”
Feature image courtesy of Clio