Uncapped with Jack Altman
· Max Junestrand
[00:00:00] S1: The founding team were three engineers. The most natural hires were where we were like, let’s grab all the smart engineers that we know from college and add them into the org. In the beginning, we had to build our own agent framework because LangChain and these things that we initially built on couldn’t get customized to the level that we needed, back in 2024. As we understood more about the model capabilities and the problems we wanted to solve… Let’s take due diligence as an example. It’s really hard to solve a due diligence task in a chat-based format because you need to review hundreds of documents. Hundreds of documents are never going to fit into the context window of a single model call, at least not back then and probably not now either. So we built this new product that we call Tabular Review. It’s a big matrix where you would throw in tens of thousands of documents and throw in all the prompts, and it started running all of them in parallel. What we basically did was say, three engineers, you’re now on Tabular Review. This is your own company. Run. Over 10% of the EPD org at Legora is ex-YC founders. Our head of engineering who joined, Jake, was a solo founder in YC. Our VP of product, Adrian, was also a legaltech founder in YC and happened to be both a GC and a lawyer. As we progressed, engineering and product have stayed at the core of who we are and what we do. I also think that everything else is an expression of that. We can only market what we actually build. We can only sell what we actually build, and product lead compounds. As you put it in the beginning, we did not show up first. Legora was not the first product that many legal teams looked at because there were earlier entrants. So we knew that we had to show up and be best. If you want to be best, then you need to invest in product, you need to invest in engineering, and you need to build that culture of reliability first. We actually had a time period in the company for six months where we didn’t sell, basically, because we weren’t ready to hit the gas on onboarding a thousand lawyers a day and knowing that the product was going to keep up with that. So we took the early hits of investing in that.
· Chetan Puttagunta, Max Junestrand
[00:00:00] S2: Talk more about that period specifically. The seed round you did with us was in March of 2024. The product went to GA October 1st, 2024. You called me early September 2024 and said I need to come to Sweden because all of us need to sit in a room and just talk about where we are and what we need to do to get this thing out in a month. We came and sat with the whole company. It was literally the whole company, which wasn’t that big back then, only 20 people. It was the whole company, the founders, chicken wings and beer. And peanuts actually. Those were the three things served. There was a very open dialogue of, how do we get this thing out in 30 days? Because at that point, you essentially weren’t facing the market test. You were building. There were 10,000 things you could build. The outcome of that discussion was that we’re only going to focus on three use cases. [00:00:00] S1: That’s right. [00:00:00] S2: So talk about one, you calling me to tell me to come to Sweden to have that discussion— [00:00:00] S1: And you actually showing up. [00:00:00] S2: I did show up. Reflecting on it, that was one of the most important things that you and the founders did in the company, at that moment saying, we have 30 days to go. We’re just going to sprint at these three things, not the 15 things that we could do.
· Max Junestrand
[00:00:00] S1: There was this feeling of: you get these LLMs, they’re so powerful. We learn about all these use cases in the firms and with the clients that we work with, let’s go solve all of them. Wrong decision. You can’t solve 15 things at the same time. We had to kill a few darlings and really double down on the stuff that we thought was going to work. We looked at the market and basically saw a few things that were really working as a paradigm for LLMs in legal. One of them was this big tabular extraction. Another one was embedding it deeply into Word and Outlook, basically having Legora be accessible wherever the lawyer is already working. We were still called Leya back then, this was very early. We took the entire company and had a town hall. I remember showing some numbers where a particular company that just had one of these features was doing more revenue than us. We were doing 1.5 million at the time. That felt very painful because we thought that we had a better suite, but we didn’t have as much revenue because we were based in Sweden and we were mostly selling to European firms at the time. So we just said, let’s do these three things. Let’s do them better than anyone else, and it’s going to be worth it to buy our suite over anybody else’s. I wrote this very short product manifesto, sent it out to the entire company, and we rallied the troops. It was off the back of that that we had our first quarter where we doubled revenue. We went from 1.5 to four. We were like, oh, this is ripping and it’s flying off the shelves. Then in Q1 we had another quarter where we doubled, going from four to eight. Whoa, okay, now we’re talking. It became time to launch in the US. We hired Patrick and Evan who joined from a competitor, and we had our first boots on the ground in the US. Then we felt okay, what we have is a winning formula, so we just need to crunch it out everywhere. Now I think we’re at another interesting point in time where we’ve built all these different tools, but the paradigm from now onwards is that humans are probably not going to work with all these tools. Agents will basically leverage the tools that we built. I remember when MCP came, our CTO basically went, “Now Legora has two users.
· Max Junestrand, Jack Altman
It’s human users and agent users, and every new feature that we build has to be able to cater to both.” Now we’re seeing more people basically use our agent that uses the tabular grid, or our agent who uses our word editing capabilities, than humans actually going and using those features at all. [00:00:00] S0: Chetan made a cool point to me recently. We were talking about how companies that are pre AI and companies that are fully AI native just have to be built differently in various ways. Because you didn’t build a pre-AI company, I think it gives you this unshackled mind. You’re not even trying to think about some past alternative. You’re just like, given what’s in front of me, what should a company look like? You talked about how having YC founders inside the company has been helpful and I’m sure there’s a lot there. I’m curious, what are the main tenets that you’ve observed? Because now you’ve probably hired a lot of people who did work and built companies pre-AI. What do you think are the main tenets, ideas, and cultural concepts that have been important to you, just to make it work in a fully AI-native world?
· Max Junestrand, Jack Altman
[00:00:00] S1: I think this idea that Chetan brought up—you have to be willing to kill the stuff that you’ve done in the past—is very important. In more traditional software, you have to build the foundations and then you build the stuff on top of it and keep building the stack. In that world, it was also very good to have a technical architecture where one feature would rely on the same microservices as other features. But the problem is, in AI, maybe that feature now needs to scale really quickly, and the cost of writing software is so low that it’s basically better to build your own stack for each thing. Now that we hire finance professionals or even lawyers internally to Legora—we just hired our first tax person—they come with a set of ideas. “Oh, this is how I used to do it in my old company.” Everybody’s forced to relearn, and also question what their value is on top of the general model capabilities, which was very painful. [00:00:00] S0: Totally. Bret Taylor talked about this on this podcast too. Basically people are going to build something and six months later we might just kill that thing and everybody needs to be comfortable with that. Historically, that would be a lot of painful internal conversations. Do you have to change? Is that a different culture for people?
· Max Junestrand
[00:00:00] S1: I think it’s a different culture completely. The culture is that you don’t maximize for your function, you maximize for the company always. I’m very upfront with every exec who joins Legora that, in a way, you’re joining with an expiration date. You have to continuously prove that you scale out of that, because the company is scaling so exponentially. I don’t know if it was Mark Zuckerberg or somebody who talked about hiring people with high y-slopes and not high y-intercepts. I think about that a lot, mostly because I’ve had to do that. I did not join or start Legora with a lot of experience, but I’ve proven that at every new point in time I’ve scaled with the business. Other people at Legora need to do the same. I think that goes for every function. An engineering team that’s shipping the amount that we do, previously had to be 500 people, and now we can get away with being 50. There’s even a question of whether we need to be more than a 100 engineers, or is the bottleneck really knowing what to build and building it the right way, and designing an experience that works for hundreds of thousands of people that we now have on the platform. The paradigm is shifting all the time. What’s nice about our work is that engineering is a roadmap of what’s going to happen in other industries too. The general models have come the furthest in coding, but also those organizations are very quick to adopt and shift. Engineering orgs are today looking slightly different, and I think we can expect the same in legal organizations.