Transcript for “09 Knackly Talks About Software Acquisitions & Mergers w/ Zack Glaser! What’s going on?!”

Lowell Stewart:

Because software is growing and it’s being enhanced and it’s becoming more useful. If it’s not being enhanced and becoming more useful, it’s becoming less useful and withering away.

Kim Mayberry:

We’re out there to make the best document automation platform out there.

Zack Glaser:

It is what it is, frankly. It is incapable of doing some of the things that Knackly can do, for example.

Michael Lane:

Welcome to the Knackly podcast, where we help law firms make documents better.

Michael Lane:

All right. Welcome to the Knackly podcast. My name is Michael Lane and I am your host. With me as always are Knackly founders, Kim Mayberry and Lowell Stewart. Hey guys, how are you?

Lowell Stewart:

Hello, doing great.

Michael Lane:

Right on. I also want to welcome from the Lawyerist, Zack Glaser. He’s the host of the podcast there, and this is Zach’s second visit to the Knackly studios. Really wanted Zach here for the topic today. Welcome Zach.

Zack Glaser:

Hey guys. Thank you. Always happy to be joining you guys.

Michael Lane:

Over the last several months there’s been a lot of changes in the document automation space. A lot of our competitors have been purchased by companies who produce case management solutions and other things. I want to talk about it. What does it mean to the industry and what does it mean to innovation? What does it mean to the purchased products? Let’s talk about that.

Michael Lane:

Zack, why don’t you kick it off? Do mergers like this generally improve the software that got purchased or not, in your opinion?

Zack Glaser:

Man… Going harsh right off.

Michael Lane:

Right. Might as well…

Zack Glaser:

I think it depends on the purchaser. One of my first questions in a couple of these recent acquisitions is, does the purchaser see the value of this company? A couple of the recent ones have some things that stick out to me that make them special. If the purchaser doesn’t see that value, doesn’t see where they’re going, then that scares me because we lose that innovation. We lose that knowledge base. If they do, the added funding can help them go down that path. It depends on the purchaser. That’s the way I’m going to weasel out of that question.

Kim Mayberry:

You think about who… All right. Lawyaw was purchased by Clio in, I think it was announced in August timeframe. August, September. We know that Woodpecker was bought by MyCase, and Afterpattern was bought by NetDocuments. Those are the ones that have been purchased. Now, it’s a matter of what do these companies push us to do? I think the more competition, probably the better the product becomes.

Zack Glaser:

I’d think so, but the question here is, is this creating a more robust, competitive environment or is it saying, okay, we’re going to peel off some companies, bring them under our wing. We think they’re fully baked and we’re going to implement them in the way that they are. Where, to me, document automation, this space is very young in a sense. It’s been around for a while obviously, but there’s a lot of innovation to be done here. There a lot of future in this. I’d like to see you guys push each other.

Lowell Stewart:

Yeah. That’s an interesting way to look at it. I certainly see it in a similar light. If you think about software in general, the way the software industry moves forward is by standing on the shoulders of everything that’s come before. Software’s never done. It almost seems like done is equivalent to dead because software is growing and it’s being enhanced and it’s becoming more useful. If it’s not being enhanced and becoming more useful, it’s becoming less useful and withering away. It’s this idea of the product being done, now let’s implement it. Let’s put it everywhere and use it. That’s a dangerous thing.

Kim Mayberry:

Lowell, isn’t that, in essence, why Knackly started? If you think about our first discussions about Knackly it grew because the industry wasn’t moving forward.

Lowell Stewart:

Right. So many people had concluded document automation is hard. It’s the way it is and it’s complicated. Some people, as a reaction to that, have built really cool systems that are super easy, but also super simple. We started saying, what can we do to move it forward and make things easier than they were with legacy products, but also really powerful. There’s so much innovation to do, that is waiting to be done in the document automation space. I want healthy competition out there. I want the state-of-the-art moving forward. I don’t want somebody to say, document assembly is a check mark on our feature list that we need checked.

Zack Glaser:

Looking at the people that own these companies, that have been recently purchased, I think that’s where they are too. I talked to them and these are people that dig this. They’re really into this document assembly space. To me, making sure that they’re ideas are going forward, that’s what keeps all of you guys making the space better for end-user.

Michael Lane:

Yeah. Kim mentioned the three recent purchases or mergers, and, of course, HotDocs has been purchased a few times over its history. Are there examples in our industry of purchases improving the product yet?

Michael Lane:

Pretty quiet. [laughter]

Kim Mayberry:

You can look at HotDocs. They were innovating in the nineties, then they got purchased by Matthew Bender. I think things progressed forward. Then Matthew Bender was purchased by Lexis, which wasn’t a direct acquisition and it seemed like things really stagnated under Lexis because there wasn’t vision there. Then Lexis sold it and innovation started happening again. Now, we see HotDocs and they’re back to it. All indications are is that they’re back to the not innovating.

Lowell Stewart:

I think they’re struggling. I know a lot of the guys there and they are committed to a great product, but you’ve got to have the support of the owner company. They’ve got to be committed to innovation or innovation becomes really hard.

Michael Lane:

It’s a matter of resources too. When you work for HotDocs or Mackly or anything, and that’s all your company is, 100% of 100% of those employees focus is on the success of whatever that is. As soon as it gets brought into a portfolio, all of a sudden it’s no longer the singular focus of everybody there. I saw that happen when I was at Abacus. HotDocs was one of many things and it was very important, but it could not be the only thing that was important to him like it could have been in the past. That’s a reality. That’s how it works. Does that dilute the brand or does that brand get introduced to more resources than it might have had otherwise, and so it’s improved that way?

Lowell Stewart:

Yes, to both. I think of some of the acquisitions of HotDocs over the years and it’s like, if that acquisition didn’t lead to an explosion in innovation, but it did lead to the company surviving, whereas the alternative might have been it not, which is worse. I guess software companies do what they have to survive. Hopefully, if they value their users.

Kim Mayberry:

My understanding is the Matthew Bender acquisition originally was a lifeline. It was needed.

Lowell Stewart:

Yes.

Kim Mayberry:

In that case, it was to the point that it needed to happen and…

Lowell Stewart:

It was like the private funding ran dry and that needed to happen.

Kim Mayberry:

Right. There are a certain area there. We’ve had conversations with, in disclosure, we’ve had conversations this year with various people. I think, at the end of the day, it’s fair to say that Lowell and I felt like none of those were bringing on the innovation that we wanted. We saw some potential downsides that innovation wasn’t going to happen.

Lowell Stewart:

Yeah.

Kim Mayberry:

The initial vision that we’ve set out to accomplish wouldn’t happen if we had been, or it was at-risk.

Lowell Stewart:

Right.

Kim Mayberry:

I think it’s fair to say, from our perspective, is we have three values that matter to us. One, that our employees are taken care of; two, that are customers that are taken care of; and three, that our stakeholders are taken care of. As we look at the future, I can’t say what’s going to hold for us, but those are values that matter, and I’d add on a fourth one there that we want to continue to innovate because document automation, in spite of the fact that it’s been around since the eighties… Is that right?

Lowell Stewart:

Yeah. Late 1980s. Yeah.

Kim Mayberry:

It still is in its infancy. It’s crazy to think of it that way, but I think there’s so much more to be done and I’m excited about the platform that we’ve built and the technology that we’ve been able to use that gets us to where our vision is.

Lowell Stewart:

Yeah.

Kim Mayberry:

That’s how I think of it and the acquisition spree. Do I want… [silence]… there is a sense that if other people are innovating and it does push you to innovate more, which is always benefits everyone.

Zack Glaser:

One of the things that you’re talking about the users of these products and my question with this, and I think y’all’s question as well is, what does this mean for the users? What does this mean for the users of whose been acquired and does this say, this is where users stop? This is what users want, where the state-of-the-art is at right now, is what other products are saying, okay, that’s what we want. That’s curious, because I don’t think that, but I also, and like you guys, I’m surrounded by a lot of people that see the vision of what document automation can really do. My question is, are they right? Is this weird document automation should stand?

Kim Mayberry:

I don’t know what these other companies may not feel that way.

Michael Lane:

Right.

Kim Mayberry:

Do the people that did the acquisitions, do they feel that way because now they own the purse strings.

Michael Lane:

Right. Right.

Kim Mayberry:

I would assume that every founder that just sold, is excited because actual resources are potentially coming their way.

Zack Glaser:

I’m sure that every one of them, at the very least, thinks that and was told or whatever, that this is going to add to the innovation. I don’t think any of us questioning this is questioning the intent of the parties on this or their idea that they want to innovate and they want to see this keep going and be competitive, but is that what we’ve seen in these acquisitions?

Kim Mayberry:

Yeah. You can point to some really fantastic things. I think of Google’s acquisitions of YouTube. Look at what YouTube has done by having Google’s backing.

Michael Lane:

On the other hand, you’ve got Microsoft and Skype. They killed that.

Kim Mayberry:

They kind of did, but I think they remorphed it into Teams. I’m not sure if we’re seeing that remorphing in Teams because we are using it and we’re still having problems with it.

Michael Lane:

Nobody says, I’ll Teams you like they did, I’ll Skype you. Do you have Skype? Let’s Skype. We’ll Skype over it. It was the word like Kleenex, and now it’s not.

Lowell Stewart:

We use Teams, but we still use Slack.

Zack Glaser:

Right?

Lowell Stewart:

Yeah. And Zoom.

Kim Mayberry:

Zoom and GoToMeeting. We have them all at the moment because some of it work out. Yeah.

Zack Glaser:

Here’s this Estonian company that was massively innovating and really pushing the envelope, get it’s acquired, and it is part of this system that is following everybody. It’s disappointing.

Michael Lane:

You ready for a pop quiz?

Kim Mayberry:

Yes.

Lowell Stewart:

Sure.

Zack Glaser:

Always.

Michael Lane:

All right. I need a number. If you, without doing it, if you Google document automation software, how many results would you get?

Kim Mayberry:

It’s pretty high…

Lowell Stewart:

If you Google anything, how many results do you get? It’s usually in the millions, isn’t it?

Kim Mayberry:

Yeah. 231 million results.

Michael Lane:

Did you just do it? You just Googled it, didn’t you.

Kim Mayberry:

I just did it.

Michael Lane:

That’s cheating, but okay.

Kim Mayberry:

Here’s the interesting thing though. If we… Document automation software, let’s do legal.

Michael Lane:

How many competitors do we have is my question and how big is this space? Who’s left to purchase that we don’t even know about? Cause a number of them… There are document automation systems that I have never heard of sometimes. I run across them and they’re a couple years older or more and they’ve been around a bit, but…

Kim Mayberry:

Every time I do a search, I seem to find a new one.

Lowell Stewart:

There are probably over a hundred. Very likely over a hundred. I know back when I was at HotDocs, we maintained a shared document that listed all the competitors and what their strengths and weaknesses were vis-à-vis HotDocs and stuff. There were a lot of players and, of course, many come and many go.

Kim Mayberry:

I remember one that it was in the 2000s, another tech startup out of Utah was working on their own platform and they weren’t ever successful in getting there. They had to close down. It really comes down to the… I think there’s a market. You’ve got simple ones and more complex ones. The more complexity it takes a bit more knowledge on how to do it.

Michael Lane:

There are a number of them that are template builders within Word that count themselves as document automators and they show up in this list too.

Kim Mayberry:

Yeah. Yeah.

Michael Lane:

Those aren’t competitors of ours. Those aren’t the same business.

Zack Glaser:

Even in the ones that are competitors of you guys, how many of them are as close to the metal as you guys are? You look at the no-code, low-code stuff, and how many of these are built on the Docket symbol platform? Which is fine, but it does a certain thing. It is incapable of doing some of the things that Knackly can do, for example.

Kim Mayberry:

Yeah. Yeah.

Michael Lane:

Thank you for saying that, Zack.

Zack Glaser:

It is what it is, frankly. That’s one of the things that I look at. I track 12 document assembly platforms and some of them get into contract lifecycle management. Some of them get into clause management. You get into some contract mill. That’s the thing that I see with this is losing that kind of innovation of, what even is document assembly? It’s beyond… I think we can say real document assembly or what we’re talking about with document assembly, is beyond mail merge integration.

Zack Glaser:

That’s not what I’m talking about when I talk about document assembly. I talk about something that has some intelligence to it. In one way, I fear that if people are getting bought out of this, they won’t necessarily continue to innovate and that’s not necessarily true. Also, that people aren’t going to want to put themselves into this place and innovate. They think, oh, I could spin something up that would get purchased. Trying to make it look good to the purchaser, instead of making it look good to the user.

Lowell Stewart:

Certainly this is what Kim was referring to when he was talking about why we started Knackly and how that lines up with some of these things. With Knackly, one of the architectural goals was to build on what’s been done before, but keep things modern in architecture, and facilitate others building on what we’ve done. If you think about software, in general, you package up what your software does in such a way that other people can use it and build something better and smarter. One of the real problems with document assembly, one of the real challenges, is that the fundamental… The close to the metal building blocks aren’t open. They’re not shareable or reusable because they’re so proprietary. How you actually assemble a document.

Lowell Stewart:

If you’re are doing text documents or HTML, those are plain and obvious standards. You can have standardized tools that build them. If you’re building complex word processor documents, we don’t have standard open tools to do them, or the standard open tools that are there aren’t powerful enough to do the kinds of automation that legal professionals need.

Lowell Stewart:

One of the aims that I’ve had with Knackly is starting to build and develop and maintain open platforms for doing the low level manipulation and building Knackly on top of those open tools. It’s one of the things we don’t talk about very much in our marketing materials and so forth, but Knackly’s ability to assemble DOCX files is based on some open projects that we maintain.

Lowell Stewart:

I think that’s a huge way forward because the more we in the space can collaborate on the stuff that all document assembly ought to be able to do, and we ought to be able to check that box and say, we do that now. We can build on top of it, but until we’ve come to an agreement about what the foundations are for manipulating word processor files, and so forth, then we’re stuck running in the same hamster wheel in the industry.

Zack Glaser:

I like that. I was talking to Martin Clausen from a company called HyperContracts out of the EU. It’s not document assembly and it’s not contract lifecycle management, but some of the things that they were doing were the concepts that they were using of having to build their own language in order to do these things that are in contracts. The same way where you have to build your own language to represent what is being done in these documents that are being assembled. I think you’re absolutely right. I hadn’t really thought about that. The more we standardize this and say, everybody, let’s start using this language in a way, the more somebody else is going to come along with a slightly different perspective and push the whole state-of-the-art forward.

Lowell Stewart:

You mentioned contract… Some people get into contract management, some people get into clause management and so forth. Think about the contract management that you could have, or the clause management that you could have if we already agreed on what the document assembly features needed to be underneath. If you think about JavaScript, for example, the JavaScript that most browsers use, if you have strings, but in 2015, I think, they introduced a new feature to do template strings in JavaScript. Not all browsers support it yet, but it’s in the standard, and now, moving forward, people can use these template strings that are much more… Makes certain things that used to be painful, really easy to do. We’ve got to have, I feel, you’ve got to have leadership. Maybe even some kind of standards body to say, these are the features that we need so that different people can play in the space, but have compatibility. That brings up the whole, once you pick a document assembly vendor, you’re tied to that, you’re married to that vendor, which, like you said, Michael, makes these acquisitions all the more scary.

Kim Mayberry:

It’s a lot of work to get the conversion from one to another, which is part of the reason why people like purchasing. From a monetization standpoint, it’s a pretty sticky product. There’s really… You have to create a really compelling story to move. Part of that compelling story is whether they’re going to keep innovating or not, and whether they’re going with a product roadmap.

Michael Lane:

What’s next for Knackly? We talked about innovation and how it’s vital, of course. What’s on our docket? What can people expect from us over the next months, years? Where’s Knackly’s future lie?

Kim Mayberry:

I’d say next year is, from an overall perspective, we’ll be doing other things, but it’s about integration to me and getting into more systems. We’ve started on the Filevine integration that will be similar to our Clio integration that we did. Excited about that. We’ve got other CRMs that we are looking at and not sure exactly which ones we’re going to do yet. From a… Go ahead, Lowell.

Lowell Stewart:

I was going to say integration is definitely a focus, but, in addition to that, one of the core principles that we’ve tried to do in Knackly that can be tricky in document automation, in general, is to keep some separation. This is techy jargon, but keep some separation between how we handle data, how we store data and how we gather data.

Lowell Stewart:

One of the reasons for that separation and one of the innovative features were going to be working on is to start allowing, what we in Knackly are calling custom layouts, which, basically gives you a lot more latitude in how you create your customer experience with interviews and the product. Allowing you to have an interview be as complex or as simple or as stepwise or as altogether. Allow the interview to be however you want it to be without impacting the shape and the storage of your data. It opens up a lot more flexibility in terms of making the products that you build with Knackly. The intakes and the apps and the form sets and so forth, making those products much more maintainable over time by giving you the flexibility to modify the layout without changing the data or modify the data without changing the layout and so forth.

Lowell Stewart:

I’m excited about that too.

Michael Lane:

Let’s talk a bit about what we did this week with the Lawyerist. We attended LabCon, and Zack, why don’t you talk a bit… Describe what that is and how it went.

Zack Glaser:

Of course. At Lawyerist, we have a coaching program called Lawyers Lab. We help attorneys create, maintain and run healthy law firms, whatever that idea of a healthy law firm is for them. Part of this program, they have access to a lot of coaches. We have business coaches, and I’m a legal tech coach with that.

Zack Glaser:

Twice a year, we come together and have a… I think people would call it an Unconference, but it’s a conference that is led by the people that are there. With that, led by the attendees, obviously, all conferences are led by the people that are there, but with that guys were nice enough to let us borrow Kim for about three days. We had a lot of discussions like boots on the ground, kind of rubber meets the road discussions with a lot of mid-size lawyers and law firms about document automation, about document creation, about automation in general. Kim was a wealth of knowledge for that. We really appreciated Knackly showing up and providing so much value in this conference because it’s about the attendees, which essentially, Kim was another attendee, working with each other and all bringing value to each other and helping everybody build a healthier practice. It was a lot of fun.

Kim Mayberry:

I loved it. It was fun to be down in the trenches with people talking to them. I will say, if you’re listening to this podcast and you want ways to build, to improve your practice, they’re the best organization that I know of that are helping people. I know other ones are out there, but boots on the ground, Lawyerist that I’m I can’t say enough about them.

Michael Lane:

We were glad to be there to help support four or five of our users in attendance there. It’s a terrific spot. We’re glad to be supportive of lawyers. We’re proud to be associated with them.

Zack Glaser:

We absolutely loved having y’all there. I don’t think anybody had met in-person… Any of y’all’s users had met y’all in-person. I know they were really excited to see Kim and get to talk with him. They weren’t the ones that got the value from Kim, that was the best part, is they were talking about it and saying, here’s what we’ve done, but y’all had already helped them and gotten them sorted out.

Kim Mayberry:

It was great because there were times like, you need this. Knackly. People would yell out. That was fun.

Zack Glaser:

I think I was a broken record there like, go talk to Kim. Go talk to Kim. Even if you don’t need document automation, if you want to know about automation, if you want to know about this type of stuff, go talk to Kim. He knows what he’s doing.

Kim Mayberry:

Awesome. Thanks for… Really appreciate the opportunity to be able to see you in-person.

Zack Glaser:

Oh yeah.

Kim Mayberry:

… this week and having you on today.

Zack Glaser:

Thank you guys. I love coming on and talking with y’all. It’s great to be able to kick around ideas and talk to people who love what they do.

Michael Lane:

You’re one of our favorite guests. You’re always welcome back.

Kim Mayberry:

Isn’t he like our only guest that we’ve had though.

Michael Lane:

He didn’t need to know that.

Lowell Stewart:

Still, the favorite though.

Zack Glaser:

My father says I’m his favorite youngest child. [crosstalk 00:33:47]

Lowell Stewart:

It’s nice to be that sweet.

Kim Mayberry:

I do the same. I do the same thing with my kids. I have my favorite oldest. My favorite oldest boy. My favorite youngest boy.

Zack Glaser:

Yep.

Kim Mayberry:

I know how it goes.

Zack Glaser:

I’m just happy to be in the running.

Kim Mayberry:

Yeah.

Michael Lane:

Thanks a lot, Zack. We do appreciate it. Why don’t you plug your website so everybody knows where to find you.

Zack Glaser:

We’re relatively easy to find at lawyers.com and if anybody wants to get ahold of me, they can send an email to Zack, Z-A-C-K at lawyers.com or find me on the various social media places.

Michael Lane:

With that, I think we’ve reached our time guys. Zack, it was sure Great to have you again. We appreciate you being with us, and, as I said, you’re always welcome back. Kim and Lowell, let’s get back to work. We’ll talk to you guys later. [crosstalk 00:34:37] Thanks everybody for listening, and. I’m failed to do it earlier, a shout out to the Knackly users who attended LabCon. It was great to see you guys. That concludes Knackly: The Podcast. Please be sure to leave us a review. If there’s something you’d like to hear from us, reach out and follow us on Facebook, LinkedIn, Twitter, and our website, knackly.io. That’s spelled K-N-A-C-K-L-Y dot I-O. Thanks for joining us. We’ll catch you again soon. Meanwhile, be well and be kind.