Legal Tech Profile: Libryo – Dentons, New Products + Spending Funds Wisely
With the new Legal Q&A Module, which is a key aspect of the startup’s offering, customers can see a standard set of compliance questions, each with up-to-date answers for multiple jurisdictions, thus enabling them to cross-compare legal requirements and ensure that multi-jurisdictional compliance is being well managed, Libryo CEO, Peter Flynn, told Artificial Lawyer.
For example, Legal Q&A, which is a SaaS feature that has been built on top of Libryo’s content model, is currently being used by a US bank to manage know-your-customer (KYC)/anti-money laundering (AML) compliance in 11 countries.
Flynn explained: ‘The way it works is that when a client signs up with us, they can define a set of compliance-related questions. From the Libryo end, we will provide regulatory updates on those areas that are applicable to the client’s question set. So, say for example, a client has asked about an AML regulation in Spain.
‘As soon as there is an update on that, Libryo notifies the customer of this change. Libryo will also notify Dentons, who will then update the answer to the applicable legal compliance question for Spain.
‘These updates are useful even for a salesman, for example. If he is travelling across seven countries, by the time he gets to various countries he can check what the latest updates are – some compliance issues can change quickly, so it’s useful to know what he can say or promise for example, or what is now no longer allowed.’
Dentons, it seems, would be a natural choice for a partner offering a global solution, given its vast scale. Taking into account all forms of association within the Dentons network, the firm has 10,000 lawyers across 151 offices worldwide.
‘We’ve done quite a bit of work with Dentons. NextLaw Labs is one of our investors and they have a close link to Dentons,’ Flynn said.
Content shake-up and new self-assessment project
Meanwhile, the company has launched a new content model that bolsters its legal text offering for clients around the world.
An excited Flynn said it took about 18 months to put together the Libryo New Content Model (or Libryo NCM). The new system replaces the prior content model and went live recently.
Basically, it enables Libryo to manage and categorise legal statements in global regulatory texts ‘at a far more specific and granular level,’ Flynn explained.
‘We are trying to obtain all the legal statues in the whole world and get them into a single cross-comparable uniform data set that’s got helpful metadata associated with it, so it enables people to be able to cross compare legal requirements between different places irrespective of the spoken language [of] the legal system,’ he said.
‘If you look at French law versus American, it’s a different legal system and it’s a different language. So it’s [about] creating the right data model that would make those two things completely cross-comparable,’ he added.
Also new at Libryo is its Self Assessment pilot project, which it rolled out this month. The scheme enables clients to assess if they are compliant and to manage non-compliance.
The program can be used at specific sites or facilities, often for environment health and safety issues, and offers the ability to see a series of specific compliance self-assessment questions, said Flynn.
‘It is one thing to know what your legal requirements are, but then it’s a different thing to say ‘ok what questions do I need to ask to make sure that I am in compliance?’ So we have to map questions to assess compliance to the actual underlying legal provisions.’
The system is currently in Beta with two renewable energy customers, he explained.
‘Depending on feedback, we’ll make the necessary improvements and then launch commercially. I expect that to be no later than January 2020.’
With all these new developments spinning around at Libryo’s offices, it seems the legal tech company is moving ahead quickly.
But how did it all begin?
The start-up’s roots in part can be traced back to a moment some years ago when two former high school and church friends Flynn and Garth Watson were part of an environmental compliance consultancy and met up with a potential customer Malcolm Gray in Cape Town, South Africa.
They had hiked up Table Mountain with Gray, ‘instead of pontificating in a coffee shop,’ recalled Flynn.
Gray, then the outgoing Global Head of ESG at Investec Asset Management, was later to become their mentor and angel investor, as well as a ‘good friend.’
In March 2016, the three South Africans founded Libryo in London, where it is still headquartered. Its other office is in Cape Town.
Growing pains and pleasures
Libryo has had an interesting journey so far.
About a year after it was formed, Libryo caught the eye of funders when it was chosen out of 80 potential start-ups for investment by Dentons’ innovation platform NextLaw Labs and fund Seedcamp. Other funding has come from the UK’s Innovation Hub.
In its first year, Libryo made revenues of £150,000, and sounded rather optimistic about its future prospects – in 2017 it projected that it would pull in revenues of £2.5 million within the next two years.
Some might think the firm was a bit ambitious … so, has it reached that target?
‘Reaching the £2.5m milestone will take longer than we had projected in 2017. On current projections, we expect to reach £2.5m in booked (formally ordered) annual recurring revenues, 12 months from now,’ said CEO Flynn.
‘The core reason for this has essentially been a pivot from a sales focus on mid-size companies, operating mostly nationally, to large multinationals. Sales cycles are thus complex and longer, with longer product roll-outs. That said, our current sales pipeline is encouraging, and on track.
‘We see Libryo currently as a late Seed stage company and are working to get the company to Growth (Series A ready) during the next calendar year (2020), marked by repeatability in terms of sales and scalability in terms of product [roll] out.’
A goal Libryo seems to have achieved – and fairly well – is expansion, leaping out of its ‘comfort zone’ in Africa and gaining business in more competitive markets such as Europe and the US.
According to the company, its customer spread (by region) is as follows:
- Around 50% are South African & SSA
- 30+% European and growing fast.
- Over 10% USA
‘[These] numbers shown are invoiced revenue. We have substantial new revenues, booked (ordered) but not yet invoiced, in South East Asia,’ a Libryo spokesman said.
Is the future bright?
Looking ahead, it seems the firm is aware that the journey forward may not always be smooth. Like any other start-up taking off in a highly competitive market, it will face challenges.
‘I guess our challenge now and for a while is just managing resources in a responsible way because scaling is hard, we need to be quite restrained. On the one hand, we could spend all our capital really quickly, and then we could just be like scaling the wrong stuff,’ Flynn explained.
‘On the other hand we mustn’t be too risk averse, because then we won’t do what we need to do fast enough. So it’s getting that balance right. Our costs are mostly people.’
Despite the slightly cautious tone, Libryo seems generally adventurous and upbeat in a number of areas, including client winning and growth, which Flynn believes is going well.
‘We have about 80 customers approximately, [and] a lot of them have subsidiaries … so it’s pretty healthy growth.
‘But I wouldn’t say we’ve hit a phase yet of hyper growth, because we are still really figuring out repeatability, finding the thing that people will buy over and over from us.’
Whatever targets they hit in the years ahead, it seems this start-up founded by three optimistic South Africans has already come a long way and their business, while still evolving, has gained a lasting place in the market.
By Irene Madongo