DISCO: Transforming the legal sector through software
Inside DISCO’s journey from law firm side project to public company
As early believers in the potential of vertical software, we searched for — and found — amazing opportunities in industries as diverse as construction, used car sales, restaurants and mortgages. But our hopes of finding interesting companies in legal tech were never very high. The sector had seen plenty of roadkill, and the legal profession wasn’t exactly an early adopter of technology.
Yet my own skepticism began to change when one of our analysts called me to talk up a new startup named DISCO. It was just a handful of people and focused on e-discovery — the time-consuming process of sifting through millions of documents in search of tidbits of information and evidence that could make or break a legal case. Product aside, what stood out for me was its founder and CEO: he had never gone to high school, finished a college degree in computer science at 16 and graduated from Harvard Law School at 19. That was someone I wanted to meet.
Kiwi Camara didn’t disappoint. He was freakishly smart and driven by a messianic zeal to help lawyers like himself eliminate drudgery. He had started DISCO after one of his law firm’s clients asked him, in 2012, to look at legal-document-review-services options. All were poor and required far too much mind-numbing human intervention.
Kiwi told the client that the best approach would be for him to build a custom solution. The client agreed, and with the help of two engineers recruited through Hacker News they created a prototype. It was an instant hit not only with the client, but also with Kiwi’s law firm colleagues. So by 2013, Kiwi shuttered his boutique litigation firm and launched DISCO. “It was just a classic scratch your own itch story,” Kiwi says, “building something that made our lives better as lawyers and improved outcomes for our clients.”
Even in those early days, DISCO’s cloud-based e-discovery service was transformative. For lawyers used to the old way of doing things, it was a bit like going from command-line computers to graphical user interfaces or from dialup to broadband. Simple document searches that used to take minutes suddenly could be completed in seconds, regardless of the size of the data set. DISCO allowed lawyers to find the proverbial needle in a haystack. And its extensive document processing capabilities delivered vast efficiencies in how lawyers tagged, redacted, controlled access and prepared documents for trial.
For all the obvious qualities of DISCO’s technology, there were plenty of skeptics. DISCO didn’t follow the traditional SaaS subscription model, instead charging customers based on usage. Because legal cases come and go, usage patterns gave the perception that many customers were churning. (In fact, the opposite was true.) The company’s go-to-market strategy was based on an outdated model that relied heavily on resellers. And DISCO was based in Houston, a city better known for oil drilling outfits than tech innovation, far away from centers of engineering talent and startup funding. Walking into its glass and wood offices, in a downtown skyscraper, felt a bit like entering the headquarters of a stodgy law firm.
We put aside these reservations and led DISCO’s Series B. We knew that Kiwi had the vision and smarts to transform the company and were convinced that he was eager to learn what he didn’t know about the software business.
Kiwi lost no time, moving quickly to professionalize the company, starting by building a direct sales force that allowed DISCO to scale its business and own the relationship with its customers. He gradually moved headquarters from Houston to Austin, where tech talent was more plentiful. And he understood how to grow into the role of a tech CEO.
“In a law firm, the basic dynamic is that all the people on your team are doing the same thing you do, but they’re not quite as experienced as you,” Kiwi says. “Being CEO of a company is exactly the opposite. Everybody who works for you is doing something that they do much better than you. You have to build and develop that team. It’s just a completely different skillset.”
As he sharpened those new skills, Kiwi also began to adopt many of the best practices of vertical SaaS companies, applying technology to unseat incumbents in an underserved industry. DISCO brought the ease of use of consumer apps to a sector stuck on antiquated interfaces. It leveraged data, by developing machine learning technologies that scanned and brought structure to legal documents, and helped to create a virtuous loop: as DISCO collected more data, the accuracy and power of the company’s e-discovery product increased.
Despite its obvious operational success, the company still had a hard time convincing investors that a legal-tech company could be a runaway success. There were just too many predecessors that couldn’t make the leap to a large, standalone company. Fundraising was never as easy as it should have been for a company with DISCO’s track record and trajectory.
That finally started to change. DISCO began layering new offerings on top of its e-discovery product, including services that bring efficiencies to document review, trial preparation and other tasks, establishing itself as something of an operating system for law firms of all sizes and for legal departments at corporations. As the new services expanded DISCO’s total addressable market and helped it scale, the company landed on lists of the fastest growing companies in North America.
DISCO now counts one in five of America’s top 200 law firms among its customers. And the company has a history of growing and expanding with their customers as they increase their usage of DISCO. It’s a testament to the transformational power of the technology and company that Kiwi and his team have built.