The global legal services industry was worth $849 billion dollars in 2017 and is expected to become a trillion dollar industry by the end of next year. Little wonder that Steno, an L.A.-based startup, wants a piece.
Like most legal services outfits, what it’s offering is a variety of ways for law practices to run more smoothly, especially for a world where fewer people may be meeting conference rooms and more — even post COVID — are likely to operate from far-flung locations.
Steno launched with an offering that centers on court reporting. It lines up court reporters, as well as pays them, removing both potential headaches from lawyers’ to-do lists. More recently, the startup has added offerings like a remote deposition videoconferencing platform that it insists is not only secure but can manage exhibit handling and other details in ways meant to meet specific legal needs, It also, very notably, has a lending product that enables lawyers to take depositions without paying until a case is resolved, which can take a year or two. The idea is to free attorneys’ precious financial resources — including so they can take on other clients — until there’s a payout, but of course, the product is also a potentially lucrative one for Steno, as are most lending products.
We talked earlier this week with the company, which just closed on a $3.5 million seed round led by First Round Capital (it has now raised $5 million altogether). Unsurprisingly, one of its founders is a lawyer named Dylan Ruga who works as a trial attorney at an L.A.-based law group and knows first-hand the biggest pain points for his peers.
More surprising is his cofounder, Gregory Hong, who previously cofounded the restaurant reservation platform Reserve, which was acquired by Resy, which was acquired by American Express. How did Hong make the leap from one industry to a seemingly very different one?
Hong says he might not have gravitated to the idea if not for Ruga, who was Resy’s trademark attorney and who happened to send Hong the pitch behind Steno to get Hong’s advice. He looked it over, then he asked to get involved. “I just thought, ‘This is a unique and interesting opportunity’ and said, ‘Dylan, let me run this.’”
Fast forward and the 19-month-old startup now has 20 full-time employees and another 10 part-time staffers. One major accelerant to the business has been the pandemic, suggests Hong. Turns out tech-enabled legal support services become even more attractive when lawyers and everyone else in the ecosystem is socially distancing. Hong suggests that Steno’s idea to marry its services with financing is gaining adherents, too, including amid law groups like JML Law and Simon Law Groups, both of which focus largely on personal injury cases.
Indeed, Steno charges — and provides financing — on a per-transaction basis right now, even while its revenue is “somewhat recurring” in that its customers constantly have court cases.
Still, a subscription product is being considered, says Hong. So are other uses for its videoconferencing platform. In the meantime, says Hong, Steno’s tech is “built very well” for legal services, and that’s where it plans to remain focused.