Here are my reflections on 2021 and thoughts for 2022 related to Elevate and the legal tech and law company sectors generally.
Ten Years and Going Strong. 2021 was Elevate’s tenth anniversary. Our first decade saw steady growth in Elevate’s range and maturity of offerings, number of employees, revenue, and customer base. Revenue grew organically to $87M, and we ended 2021 with our strongest ever sales quarter with $11M in new bookings. We landed more than three dozen new customers and expanded our work for a sizable number of existing ones. We released six new modules for our Elevate ELM platform, and our headcount grew by 200.
New Website, Refreshed Brand. We launched a new website and a brand refresh upon reaching this milestone birthday. Our revamped site emphasises our philosophy, vision, mission, and values, with more customer-relevant content, including impact videos, podcasts, case studies, infographics, Expert thought leadership material, and our points of view on The Humanisation of Law, Innovation and Practising Lawyers, Legal Technology and Digital, and Data and Artificial Intelligence.
Customer ‘Jobs to Be Done.’ Our website reflects our whole company reorientation from Elevate’s capabilities as point solutions to a better understanding of customers’ needs – what we call their Jobs to Be Done. We deliver expert-led, technology-powered solutions that achieve outcomes for customers, drawing from our entire range of consulting, technology, and services – including practising lawyers from our wholly-owned UK and US ABS law firms. This combination of cross-discipline expertise and global technology-enabled capabilities sets Elevate apart as the only one-stop law company for customers’ run-the-company legal Jobs to Be Done.
First-Ever Law Company with Integrated US Law Firm. In November, the Arizona Supreme Court granted Elevate an Alternative Business Structure (ABS) license. This makes Elevate the first law company with an integrated law firm in the US. With ABS law firm subsidiaries in both the US and UK, Elevate can uniquely address customer needs, integrating lawyer-led expertise, technology, data analysis, and process-driven services.
COVID Ambiguity Clearing and Choice. After flat financial results in 2020, our 2021 performance indicates that the pandemic’s business disruption has passed. Notwithstanding the caution COVID requires when making predictions, we anticipate 2022 will allow more in-person meetings with some customers while others will prefer to meet virtually. Some Elevaters seeking more in-person reconnection will return to our offices, while others will choose to work from home. As demand has returned, we are glad we decided to retain all our people (and their expertise) through the pandemic – I’d like to thank every Elevater for your support during the temporary COVID compensation reduction, which is behind us now.
The Great Resignation and People Development. There is much discussion about The Great Resignation right now. Through our People Experience program, we prioritise the human aspects of work, e.g., culture, community, and connection, to ensure that people feel they belong, feel that their work is meaningful and fulfilling and their contribution is noticed and acknowledged. We invest heavily in learning and development, including training managers to create healthy relationships with our teams, offering opportunities for autonomy and mastery at work. Though it varies by department and geography, I am pleased to report that Elevate’s company-wide unwanted attrition remains below our target of 15%. We are proud to be a premier developer of talent in law, including fifteen Elevaters recruited by just one Big 4 new market entrant, Deloitte, while the next closest competitor hired only two people from us. We work hard to attract, develop, and retain our people. We believe that providers will best serve the whole legal industry by developing their own professional talent where possible.
Our Software Business is Maturing. Our AI-powered ELM platform made good progress during 2021, building on the core ELM release in 2020. We released six new ELM software modules during the year, including managing intake, workflow and status tracking, document analysis, outside counsel RFPs, and dashboards and reporting to provide insight into law department and law firm activity, spend, and other KPIs. Nearly four dozen customers now use the Elevate ELM platform to operate seamlessly, with one user experience, across a range of crucial Jobs to be Done – and two won industry awards for the results they’ve achieved. We will complete the rollout of the full set of our ELM offerings in 2022, including our contracts, billing, and spend management software module updates.
Partnership with the Ecosystem. We have often described ourselves as Switzerland, serving both law departments and law firms. This year we have more actively embraced active partnerships with other players in the ecosystem to ensure that we bring the best capabilities to meet each customer’s unique needs. We don’t have all the answers in-house, but we regularly assemble the relevant expertise and effective working relationships with other consulting, technology, or services providers to Get Sh*t Done for our customers.
Environmental, Social, and Governance. Elevate is preparing for our future. We appointed two additional non-executive directors to our board. Amanda Burton serves as Elevate’s senior independent director, bringing more than two decades of experience as a public company non-executive director and a deep understanding of the business of law from her work as the COO of Clifford Chance. Jeremy Westlake chairs Elevate’s audit committee, drawing on his extensive financial expertise, including as the current CFO of Network Rail.
We continue our ESG programs and released our third annual equitability and inclusion report and our inaugural environmental sustainability report. We will release our first integrated ESG report in 2022.
Capital Pouring Into Legal to Fund Growth and Consolidation. The legal tech and law company market size is already $14B, and the sector is just now entering the early phase of a long cycle of growth and consolidation. 2021 was the busiest M&A and funding year ever for the sector. Acquisitions of note include Consilio’s purchase of Legility, Brightflag’s of Joinder, Onit’s of BusyLamp, Litera’s of Kira Systems, Objective Manager, and others, and Reveal’s of Brainspace. DISCO, Intapp, and LegalZoom completed IPOs. Many law companies and law firm management teams (including us) closely follow their public company experience to decide whether to follow them to the public markets or partner with private equity. On that note, 2021 saw $100M+ private equity investments in numerous legal tech companies, such as Ontra, Clio, ContractPodAI, Litera, Everlaw, Reveal, and Ironclad.
Looking into the Crystal Ball for 2022. First, I’d like to address my colleagues. While Elevate has deep experience with remote work, and we are committed to allowing people the flexibility to work wherever and whenever you believe you will be most effective and successful, it is important to acknowledge that not every business operates the same way. As the pandemic cools, we expect some customers will request a return to the office, which we will discuss with them. Customer requests and their timing will almost certainly create uncertainty as we each consider our career objectives and personal assessment of health risks. No one correct answer exists for all people in all situations, and reasonable parties will disagree. Elevate remains committed to both supporting your choices and respecting the requirements of our customers. We anticipate instances of conflicting expectations resulting in difficult decisions. When customer requirements directly conflict with your personal choices, we encourage you to look for other opportunities at Elevate and find a new role to continue with us.
Looking at the industry outside of Elevate, the pressure on law departments to operate like other corporate functions won’t let up. Demand for legal support will be driven by the growth of the enterprise in a post-pandemic economy, the explosion of data, and the ever-changing regulatory landscape. But CFOs are going to hold every department accountable for constraining their costs, just as law department compensation and law firm increases start to bite. Legal operations will become strategic as GCs sharpen their focus on cost and efficiency while also making better use of technology and data to track performance and integrate with and operate at the speed of the rest of the (increasingly digital) enterprise. By the way, proving their business chops will lead to more GCs taking on executive responsibilities beyond the law department.
As the war for talent rages, law firm leadership will focus its attention on managing the recruitment, retention, and development of lawyers at the core of their business. Legal ops, legal tech, and law firm captive ALSPs will continue to be funded (especially for projects sponsored by key customers or partners). But since they are not the primary profit levers for firms, some might lose the investment momentum they have experienced during the last few years of record firm profits. Managing partners will be more alive than ever to the importance of culture and developing the firm’s pipeline of lawyers, who will build relationships and provide excellent advisory service to future clients. More law firms and law companies will establish collaborative relationships to serve the ‘run the company’ needs of corporate law departments.
The big news about the Big 4 in law during 2022 will be no news. Over the last decade, they have gradually rebuilt and strengthened their legal networks. They will quietly continue to build their multi-jurisdictional, multi-disciplinary capabilities (competing with both law firms and law companies) as they diversify their competitive position as expert advisors beyond tax and employee mobility.
We will see further consolidation of law companies and legal tech. Some of that will be driven by the current pace of investment inflow as private equity majority control investors seek to build winning ‘platform’ companies. But some of this will be driven by customers looking to consolidate spending by slimming down and simplifying their supply chain. As a result, we will see some of these businesses underperform investor expectations, which the markets will punish. My recommendation to other law company CEOs is to build fortress balance sheets.
Elevate looks forward to further organic and non-organic growth in 2022. We will continue to innovate in the business of law, becoming trusted by new customers, steadily extending our relationships with existing customers, and increasingly becoming a sought-after employer. What will not change are Elevate’s purpose, mission, vision, values, and principles. These have been the foundation of our first ten years, and they will be at the heart of our success for decades to come.
Elevate will continue to innovate in the business of law, becoming trusted by new customers, steadily extending our relationships with existing customers, and increasingly becoming a sought-after employer.