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Legal practice management startup Clio today announced it has closed a $110 million series E round, valuing the startup at $1.6 billion post-money. Clio says the funding will be used for strategic acquisitions and partnerships and to grow its workforce, with a focus on product and engineering teams.
Contract management is often a time- and money-sucking endeavor for law firms, regardless of their size. According to a 2016 survey conducted by Apptus, 39% of legal departments are forced to rely on people without law degrees to manage their contracts, while 50% take a week or longer to turn out documents like non-disclosure agreements. Moreover, only 40% of firms say they have an automated contract management tool.
Jack Newton and Rian Gauvreau cofounded Vancouver, Canada-based Clio in 2007 with the goal of building a legal services orchestration platform. When the company launched its software in 2008, it was among the first cloud-based practice management software products developed for law firms, Clio claims.
Clio helps manage cases, organize contacts, and automate documents, as well as keeping track of financials and client legal accounts. The platform supports a range of billing options, including online payments, automated billing, and customized plans. Clio also offers tools that allow clients to create intake forms; automate client communication like emails, reminders, and requests; and organize referrals.
According to a recent Gartner survey, the percentage of corporate legal operations leaders responsible for coordinating law firm billing increased 53% in the past two years, while the percentage of those tracking outside counsel spend increased 32%. One report predicts that the global legal operations software market will reach $3.57 billion by 2027, growing from just $1.08 billion in 2018.
Clio made its first acquisition in October 2018, snapping up Los Angeles, California-based software provider Lexicata. Lexicata’s product then served as the foundation for Clio Grow, a client intake and invoicing toolkit.
By the time Clio purchased Lexicata, the former’s app directory — a portfolio of integrations — had reached 120 connectors. It has now grown to 200, enabling Clio’s platform to sync with other commonly used legal software apps.
T. Rowe Price and Omers Growth Equity led Clio’s latest funding round. It brings the company’s total raised to date to over $386 million, following a $250 million series D in September 2019.
In recent years, “legaltech” has become one of the most active sectors for investors. Investment activity accelerated as the pandemic spurred legal firms to shift to digital-first business models. As of November 2020, there were 80 investments in legaltech, totaling $490 million for the year.
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