#StartupsEverywhere Profile: Kory Kelly, Co-Founder & CEO, Legal Karma
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Saving legal firms hours of work by automating contracts
Legal Karma is a software platform designed to expand the availability of legal services through a contract automation system that supports legal firms. Kory Kelly, Founder & CEO of Legal Karma, spoke with us about his business, the importance of programs that support founders through the process of building a startup, and the burdens that the differences in state tax and employment laws can place on startups hiring remote workers.
Tell us about your background. What led you to creating Legal Karma?
I wasn't really an entrepreneur until the last few years. After working on a number of different projects and jobs on my own, I was hired for a leadership role at a company where for the first time, I learned a lot about growth hacking and what it takes to grow a small business. I discovered I was pretty good at it and I wanted to build something in the human liberties space, which led me to discovering the need for better accessibility to legal services. As I began to explore this space, I found that while legal products were emerging, the need for these products was growing at an even faster rate. So I thought, if I could build a tool that incentivizes lawyers to productize some of their services, there'd be a lot of space for us to grow as a business while using our technology to facilitate increased access to legal services at a lower cost to users.
What is the work you all are doing at Legal Karma?
Typically, the law firms and legal service providers that work with us all have the same issue: they're trying to grow their legal service-based business. These firms provide routine day-to-day legal services, such as the preparation of contracts—something that can be repetitive and time-consuming—and have historically required additional manpower to expand the firms’ capacity. The result is that they’re caught in a cycle where they hire too much talent and then need to bring in more clients, but then they’re overworked and have to hire and train more talent. That’s where our platform comes in. We productized a contract’s software and allow firms offering these services to scale with software instead of headcount. The way it works is our users send us contracts that they use, we upload them and work with their legal team to put in all of the variations of that contract creating a master document, and then automate them with conditional clauses and calculations. The result of using our platform is that instead of handling one client at a time with one document at a time, you have one automated document that can handle multiple situations.
You recently participated in StartOut’s Growth Lab accelerator. Can you tell us a little about that experience and why these types of accelerator programs are important to developing startups?
I think any new business owner needs community, especially those who don't have built-in networks to access capital. I wasn't born into money and I don't have wealth of my own, nor do I have family and friends’ checkbooks that I can just draw on. Initially, I didn't know what I was doing. I was a first-time business owner who had never done this before. When you first start a company, you need a lot of people who can offer guidance on things like where to go to get advice on legal contracts without breaking the bank, or show you how to file an LLC properly. You need people who can walk you through what profit margins are and how you calculate things like customer acquisition costs. Business formation isn’t a subject typically taught in school, and there are just so many really nuanced questions that come up as you start building your business that only another founder in this industry would understand. StartOut was really special because it not only provided an entire community of people with the resources needed to learn how to build a successful business, but, even better, it provided founders who identify as part of the LGBTQ+ community with additional, valuable support.
Historically, underrepresented founders have had a harder time accessing the capital they need to build their businesses. Have you experienced similar challenges? Are there takeaways that you think policymakers should be aware of?
As someone who's queer, I've never felt more supported. I’ve been able to connect with a number of LGBTQ+ groups that help facilitate access to capital. Throughout the ecosystem, I have seen a ton of venture capital groups emerge that specifically invest in minority and underrepresented founders. And they're really hungry to find those founders to support. I don’t want to say that my journey is universal, but it's been very supported, particularly by the queer community. One important aspect of my experience is that it is clear that LGBTQ+ funders want to invest in LGBTQ+ founders. I think it demonstrated to me that it is important that the startup ecosystem is—and funders and investors are—more representative of our population because that definitely helps lead to more equitable outcomes.
Are there any local, state, or federal startup issues that you think should receive more attention from policymakers?
I think the biggest headache that I experience is navigating all the different tax laws. It's absurdly expensive for me to hire across state lines, and that’s something founders need to be able to do with more workers looking for remote opportunities. The financial cost to get registered to comply with all the different state tax laws is so burdensome—that’s on top of the time cost of having to navigate terrible, outdated websites to figure out how to adhere to all the rules. The result is having to pay lawyers over and over again to figure it out, which is not what funders want their investments going towards.
There are a number of other employment laws—like unemployment rates and benefits compliance—that are different in every state. It's a huge expense to comply with all the different standards between states or internationally, so I have to go through platforms like Upwork or OysterHR to hire folks. That is a monthly cost just to manage those employees through those platforms and I can't give them company benefits like I want to. It feels like this is an artificial issue that could be solved, but instead new businesses are forced to deal with it while they are trying to grow and offer employment.
What are your goals for Legal Karma moving forward?
Make and raise more money. That's what I spend a lot of my time focused on. We have a great team that continues to build out our technology and offerings for our users. We’ll continue to do the work of making legal services easier to productize and we’re looking forward to where this journey leads us.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email advocacy@engine.is.
