Software for Legal Market Equality | Raj Goyle at Bodhala

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Raj Goyle 0:00
Powerful incumbents are enemies of change. That is a that is a maxim of life, ever since human beings have been on this earth and it obviously common sense

Alexander Ferguson 0:17
the high cost of legal fees and the lack of standards across the legal system in the United States is not merely inefficient and costly, it’s unjust. And it’s not only taking a toll on those who lack the resources to for quality legal representation. It also affects the lawyers who suffer from low morale and depression, at least according to Raj Goyle, but he would know a 20 year veteran of state politics, Raj’s experience on a daily basis, quite literally the trials and tribulations of law in America. So we traded in the state house for Manhattan office and founded bonala, a company that provides transparent data and insights to make legal representation more equitable, helps strengthen law firm relationships, and deliver the best results.

In this episode of UpTech Report. Raj takes us on his journey from politics to startups. And he talks about his efforts to use entrepreneurship to make a difference. Ross, I’m excited to chat with you today and hear more about Bodhala. I’m gonna start by asking you describe your company in five seconds very brief. What is it?

Raj Goyle 1:17
We transform your outside counsel legal spend and optimize it?

Alexander Ferguson 1:21
Now you’re launching this company? Tell me the journey that you’ve been on? I mean, where did you start? You already as a state representative, how did that get? Right?

Raj Goyle 1:31
Very familiar path from the State House in Kansas to a high flying technology company in lower Manhattan. And so that yes, I guess that is that unusual. So it’s interesting, though, Alex, which is I view it, I’m asked that all the time, which is you I had a 20 year and you know, I still am active in the political world. But I had a very active, multi year, multi decade commitment to public service. I was in philanthropy, nonprofits, but I was a frontline elected official, I was the first South Asian elected in the state of Kansas, you know, and which, which is where I got these, this great ability to grow my Civil War General beard here during COVID, day 99. My wife will probably allow it to get the day 100. But in any case, the problems have what animate me and politics, about an art and society generally are when there is essentially a failure, and a system needs to be improved. So we have in our public life today, obviously great debates about race, about equity, about health care, about how we redistribute taxes about when we go to war, all of these things, those obviously drive the big discussions in political life today, in the legal market, there are very, very serious consequences that happen because the legal market is not only inefficient, it’s backwards. And our legal system badly serves our nation and its people and our needs. So if you were coming from outer space, and you looked at the legal system, and you and you were doing a McKinsey Report, no one would design it anywhere near the way it is it is it is built right now. And moreover, there’s very little conversation about it. So I grew up in a medical household, my mother and father are physicians, and it’s what took them from poverty in India to you know, affluence in America was medicine. And so what happened, though, is that at least in healthcare, we have a discussion. And everybody knows, and we don’t have clear conclusions, but we have debates around how to fix that. So I believe and I know that you know, in fact, I have this kind of six words, which are which are, you know, which are, you know, for poor, middle and rich, it’s basically, you know, sucks, scared and obnoxious. And what do I mean by that the poor in our country have no legal coverage. And the band aids of legal aid and pro bono from elite law firms doesn’t come close to the need out there. And all this country was founded by lawyers, we allow this to happen. The middle class, they’re afraid of lawyers, I mean, the divorce, a slip and fall some litigation, bankruptcy, and then the rich get, you know, $1,500 an hour overpriced legal counsel. And you know, Bo dolla, obviously sits in a space where we are helping corporate enterprises optimize that to bring really what we think are market forces and business principles into an industry that has none of them. And the ultimate consequence is actually a better functioning legal system, makes the economy more efficient and makes the country better off.

Alexander Ferguson 4:55
So you coming from the political side, you’re already seeing how inefficient It is was having to work with with lawyers. And I like your sucks scared and then obnoxious analogy as you go up the layers you focusing now okay I’ll enterprise on companies that need to streamline and make it better. Obviously law firms don’t like it because they’re happy with being making a lot of money do I have a correct statement there is?

Raj Goyle 5:23
Well it in the big sure nobody powerful incumbents are enemies of change that is a that is a maxim of life ever since human beings have been on this earth and it’s obviously common sense. You know the person who is the manager at a restaurant and is making good money probably doesn’t want to let up that let that job go. So sure. At the same time, there are a few factors that really go against that sort of intuitive feel. And one is lawyers are deeply unhappy. It is the most unhappy disconsolate white collar profession in the country by country model. And the billing pressures inside the business model and economic model of law firms aren’t is not only that business model is under mortal threat. Yes, because of the bow dollars of the world, but for macro forces beyond one company. And in fact, the Wall Street Journal in August of 2019 did a very big article based on our data that talks about that. So it’s not a happy place to be. And the business model is under deep threat. So change is inevitable. And the third point is that within law firms, there is a huge lack of equity. And I mean that there is a deep this harmonization between talent and compensation. And that leads to lots of friction inside these firms. And one thing that is important to given the natural moment we’re in the legal industry is it has the most disgusting record on diversity of any white collar profession. Again, by far, and by one anecdote is that there was a very prominent Vance commission in 1990, that was set up. And it was really powered by the first African American partner at one of the most prestigious law firms in the world. Simpson Tatra Bartlett. And at the time, there were there was less than 2% of partners were African American, to 30 years later, we have 1000s of award dinners, mentorship, pipeline, events, marketing, the amount of African American partners inside big law firms is at the same rate. And this is this is and this is an industry that has racial and gender diversity, that is actually statistically acceptable. In its first year ranks, law schools are majority women now. But yet, like a classic funnel, as you go through the law firm career at the partnership ranks, it’s white men.

Alexander Ferguson 8:03
So let’s dig into a little bit more the technology itself. Tell me about the platform, how is it different? And what is it? What does it do?

Raj Goyle 8:09
Sure. So until today, if you were until Bo dolla, if you are in general counsel, the chief legal officer or head of legal operations, even a chief procurement officer that advises the legal function inside an enterprise, you cannot, with any confidence, answer two simple questions, which is, am I paying a market rate for the service that I’m procuring? And secondly, what is what are the actual dynamics in the market that are shaping the future of that practice area, companies are price takers, they they literally relinquish all the leverage of the buy side that the buy side should have. And so the buy side usually has five attributes, the power of data, power of innovation, price discovery, competition, and accountability of the sell side, the legal industry is set up for the benefit of the sell side vendors, which any economist knows, is backwards. So our platform takes your legal spend data. And here’s the crazy thing. For most companies, they don’t even own their data. They are walking around with a piece of paper, and sometimes literally billion dollar enterprises getting legal bills on a piece of paper or PDF. And their legal invoices aren’t even owned by the enterprise in any usable or actionable way. So we ingest through our algorithms, a company spend data down to that penny. So everybody knows lawyers bill in 10th of an hour, six minute increments. Of course, nobody really trust that it’s super accurate, but that’s the way the professionals set up. And so what happens is we ingest that data, and we transform that data through our algorithm. So we have hundreds of legal specific proprietary algorithms that are relying on our $15 billion data set that can then spit back to the client. This is what you should have paid for this timekeeper, for this matter, this is what the rate card should be. This is actually what the efficiency metrics should be in this kind of in the delivery of that service.

Alexander Ferguson 10:27
Going forward from from here. Tell me more about like, a last six years, you write that you’ve been in business? What’s kind of the transformation? Has it been as far as working with your clients and the growth that you’re seeing and where you’re happier?

Raj Goyle 10:42
Yeah, so we’ve been at this for about five years, we went to market about three and a half years ago. And you know, we have been, it’s been a tremendous amount of hard work like building any enterprises, we are blessed to have really strong exponential growth. And so we now really can say, with both pride and humility, that we are the leading, we are the category creator. And we have we have invented the industry, the sub industry, I might say, a sophisticated legal data analytics. And so we continue to grow, we did raise a substantial round of capital during COVID. That’s another, that’s another story that, that we that we should be happy to tell about. You know, just anecdotally, we saw the wire pending in the bank account. And I called my lawyer and asked if, if, when it does wire pending, is there any way that they could still take it back, we already had nervous and the panic of those early days and weeks of COVID were so extreme, you just didn’t know what to rely on. And everyone was just kind of using their, their gut. And so but we were very proud to partner with Edison partners, you know, a premier private equity firm out of Princeton, New Jersey, that has a lot of experience in the SAS space. And you know, we’re, we’re happily a portfolio company of theirs.

Alexander Ferguson 12:06
Can you can you share any near term objectives that you’re working on? And then long term as well. So next year, so what’s the focus? And then 10 years, where are you going to be?

Raj Goyle 12:15
Yeah, so it’s a great question. I mean, I, in the largest sense, we just continue to have hyper growth. So more accounts, more use cases, we are now focusing on certain verticals. So we have one of our largest verticals is private equity. Interestingly, wouldn’t have guessed that when we started. But private equity has very low penetration of existing legal tech tool. And there is of course, a desire for obvious reasons to extract and optimize spend categories when it can be done in a frictionless way. And obviously, that’s what we provide financial services, writ large, of which, of course, private equity, you could say, as a subset is where we have a lot of success healthcare. And so we’re going to continue to grow those verticals, and those in those industry segments. And really the North Star, as you said, the big vision for bodalla is that ultimately, we will make the market and ultimately, a platform like ours will be the go to resource where a company will frankly only be able to come to a site like ours to know how to price and manage their outside counsel.

Alexander Ferguson 13:36
The name adalah. Yes. What tell me what where did that name come from?

Raj Goyle 13:41
It’s obviously not a conventional name. We did that deliberately. vadala In a sense, means illuminating talent in some script. My co founder and I are we do happen to be Indian American. We certainly don’t speak or study Sanskrit. My mother in law, actually is uniquely because it’s not it’s a very rare skill, did study Sanskrit at some length in her life and career. And so we asked her and we had first we wanted this notion of talent illumination, and and talent matches. So both Cora was I think, technically you know, people know Buddha bow the light. And then I think Cora means talent in some way. I thought it was a little cling on ish and a little too much confident. So I sort of just changed it to Bo dolla, you know, law, there is a hint of the law in there. Everybody knows the word mambilla. So, there we are.

Alexander Ferguson 14:43
So, where can people go to learn more and what’s a good first step for them to take when they get to start with you guys?

Raj Goyle 14:49
Yeah, well, obviously come to our website at bow dollar.com and shoot us an email at info at boat all at any time. Or, you know, click on requests You can email me anytime at Roger Bo dollar comm you know, I think the Jeff Beezus still checks jeff@amazon.com So, so I don’t think I’ll ever as long as I’m with our business, not not take not take emails, and so love to and you know, the first step you take is that we you know, we obviously talk to you and see what are the challenges you’re facing? And if there’s an interest in understanding exactly how to take this spend category, and make sure that it works for your enterprise, you know, what are the solution for you.

Alexander Ferguson 15:30
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