How Lawmatics CEO Matt Spiegel grew to $12.6M revenue with a 79 person team in 2025.

Lawmatics Revenue Explained by CEO (Over $12M ARR) - YouTube

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(00:00) Are you more than a million a month in revenue? >> Just a bit more than that. >> If Cleo or someone similar comes and offers you 20x all cash upfront, so 240 million bucks to sell Law Matics, do you take the deal? How little have you raised all in? >> I mean, we've still raised a fair amount. (00:15) We're not quite at 30 million, but I think we're pretty close to that amount allin. >> How much have you been able to hold on to the company considering that amount of raising? >> So, I'm still in a pretty good position, you know, 20% ballpark. >> How many customers are you serving now? Today, >> we have about 2,000 law firms. >> True or false? the extension you did in past this past year in 2025. (00:31) [music] Higher valuation or lower valuation? >> Higher. Higher. We were a little bit of a victim of the times because we raised our a at a really really aggressive valuation time. >> I'm going to make you an offer. We would do a $5 million line of credit with somebody like you. Hey folks, my guest today is Matt Spiegel. (00:49) He's a serial entrepreneur and formal criminal defense attorney, which means I have to be careful on this interview. Okay. Before lawmatics, he founded my case a legal practice management SAS that was later acquired by Appfolio. Lommatics today is a legal CRM for marketing, automation, data reporting, it reporting, you name it, law firms use it. (01:05) Matt, you ready to take us to the top? >> Absolutely. >> All right. Now, did you start building this when you were still a criminal defense attorney for your like inside of your own law firm? >> No, I started building my case, my first company when I was at my law firm. Um once Mike sort of took off and and then I ended up selling a tap folio that was the end of my legal career at least up to this point. (01:28) So no law matics was was more built out of the experience [snorts] at my case and just you know spending years selling to lawyers and understanding what they wanted and and where the where the industry was going. Um and so that that's really what ended up leading to Law Matics. And did you get super wealthy on the My Case exit or was it an aqua hire? Can you maybe just talk about dollars there if you can? >> Yeah, I mean I can't talk specifics on dollars, but it was um it was a life-changing event for me. (01:57) I mean, you know, my my perspective on it was um and it's a really interesting, I think, thought exercise because my case was just recently valued at about $2.5 billion. And so, um I sold it in 2012. I did not sell it for $2.5 billion. >> What was my case ARR back when you sold it in 2012? Do you remember? >> Yeah. Yeah, I do. (02:20) Uh cuz the multiple was pretty extraordinary. We were only at about 500,000 or 600,000 of ARR. >> Okay. And what do you know what it's doing now today? >> Um I don't know what the specific my case piece because it's part of a much you know it's the biggest property in a bigger company. There are other pieces there, but I got to believe that it's somewhere around 150 or 200 million of ARR. Wild. (02:43) Wild. And do you remember what multiple you traded for back then? >> It was a lot. I will tell you it was much more than like 25x. >> Wow. Okay. Yeah. And so, just to be clear, the reason I was going down this line of questioning, you were not like you sold it to to to Appfolio back in 2012 and then AppFolio sold it for 193 million in 2020. (03:01) You didn't get any bite at that Apple. You were 100% out at that point. >> That is correct. I was 100% out. >> Yeah. Wild. Okay. All right. Let's go to Law Matics. When did you launch the business? >> 2017. Very end of 2017. Took uh took about a year, year and a half to really build. And so we really started selling in Ernst at the end of 2018, beginning of 2019. (03:19) >> Okay. So 2018 first customer. Is that fair to say? >> Yeah, it was end of 20 I think end of 2018 that we had first customer. >> Okay. And how long? And you were working on it just basically for a year prior coding it. >> Yeah, that's right. >> Okay. Are you the engineering founder? or did you hire a dev shop to do it? How'd that work? >> No. (03:37) So, um I'm not the engineering founder. I had another co-founder had a and then a couple people who were just there from day one who were on the engineering side. We had we had really proper uh a really strong founding engineering team. Um my co-founder is out of the business. He left the business about a year and a half, two years ago. (03:57) Um but the other original engineers that were with us then are still with us now. >> Okay. So c going back to the beginning, it was you and a co-founder. Did you guys just split it 50/50 at the start or were you bringing a bunch of extra money so you had more? >> Yeah. No, it was really my my deal. Um he took uh a smaller a smaller split. (04:16) Um significantly smaller. Um I really, you know, it was um uh one of those things where I was going to build this company, kind of build it no matter what. Um I thought that he would be and he was a great person to start it with on the technical side. very young, very, you know, first kind of uh first entrepreneurial experience. (04:36) Um, and so it was definitely not an even split. Um, but a very >> we're talking we're talking more like a you keep 80%, he gets 20% kind of split >> in that in that range. Yeah. >> Okay, cool. So you guys get coding together, you get first customer in 2018. How did you get your first five or 10 customers? Do you remember the growth tactics? >> Yeah, so I think it was a lot of uh thankfully for us, I had done this before in the space, right? in my case at that point was a pretty big company. (05:00) So, the idea of me starting another company was just something that I got a little bit of press and got a little bit of uh it was relatively easy for us to get out there when we launched. So, it was a lot of inbound um kind of right away, right? Just making a couple press releases about me launching a new company, about Lomatics being ready, uh going to some partners, going to some people I knew in the space who had clients that they worked with in a tangential arena and and bringing them into us. Uh we went to to Google (05:31) advertising very quickly. Uh >> how much were you spending those early months? Do you remember? >> In early months it was very very small. We were probably maybe we were spending you know five grand a month or something like that. >> Um it was it was we raised money very very early. (05:46) I mean we raised money right away. So we had >> How much did you raise? >> Uh in the first year or two it was probably three million bucks. >> Okay. Okay. So you raised three million between 2018 2019. Yeah. 20 Yeah. 2020 probably. So Okay. Um we we did our first like true seed round at the end of 2020. So Okay. Three million. >> We had raised about three Yeah. (06:07) two and a half or three million before that because we knew what it would take. We we uh we knew we were going to have an opportunity to step on the gas pretty quickly. And so when we had the product ready for launch, it was all systems go. Um and we had we had a go to market strategy, a you know, a strategy that we had already deployed at great scale at my case. (06:27) And so we knew what playbook to run. >> Guys, remember I am not just a YouTuber. I'm investing into my third fund. We've deployed $250 million into 550 software companies so far. Again, at founderpath.com. If you're interested in capital, I would love to cut you a check because I know you're investing in your education. You watch my show. (06:44) So sign up at founderpath.com. And when you get the onboarding email, I reply and I see all those. Just reply and say, "Nathan, I found you through YouTube." And I'll make sure to prioritize you. I would love to cut you a check. Check out founderpath.com. Sounds like though I mean I'm trying to identify the most successful growth tactic for your first 100 customers. (07:02) Was it Google ads? >> Yeah, it was it was online. I mean I wouldn't say specifically Google ads. I would just say it was it was paid search and paid social. I think those were those were the things that really got us going. Now for us in legal we also went to conferences right off the bat and th that is a very good growth tactic in our space. (07:22) Um lawyers are required to do continuing education. So they they tend to get those hours at these conferences that are put on all over the country. They're very well attended and they're very great opportunities for sponsors. So we went to those straight away as well. Name one or two of those conferences. Um >> so ABA Tech Show is is one of the biggest ones um that's in Chicago every year. Um you now have Cleocon. (07:46) Uh Cleo, one of the bigger companies in the space, my old competitor at my case. They have a fantastic user conference. It's probably the best in the industry. Um and then personal injury has a lot of each practice area have they have their own um they have their own trade shows, their own conferences that are very well attended for those practice areas and we attended those as well. (08:06) >> And so if someone else is listening right now launching in your same shoes and thinking about spending money on these events, what would be too much to spend to sponsor some of these events earlier on in a founders's career? >> If you can spend between five and 10 grand and get in there, um it's usually pretty good opportunity. (08:22) And what were those first customers paying you on average per month or per year? >> Oh man, that's a good question. Um, very very little. I know that because they are still paying that. And I just have a I have a personal belief of not really raising prices on people um for the foundational platform. Um, people who come to you early, early adopters, they should be rewarded. (08:45) I don't, you know, see the need to increase their prices. So we still have people that are paying like 60 80 bucks a month for Latics when when now it's really costing people 4 or 500 bucks a month. So um yeah it was it was in that range. >> Yeah. Okay. So just to be clear new customers today average RPO is four or 500 bucks a month. (09:04) >> Yeah. I think our average um our average revenue annualized is is in that five to six grand range. Maybe it's going up a little bit more than that. >> Yep. Is that intentional? you're intentionally moving up market. >> So I don't necessarily see it as moving up market necessarily. I just think it's intentional in terms of uh our pricing strategy and and extracting the the you know matching the value to the value that our customers see. (09:32) Um we are definitely seeing more upmarket trends but the pricing is not necessarily intentionalized for that. >> Okay interesting. Let's keep going back to 2018. So, first customers, conferences, paid ads, 5K on Google, earlier customers paying 60 bucks a month. You This is sounds like it's working because you then did a seed round. It sounds like in 2020. (09:50) What was the size of that seed round? >> We did that round was 2 and a half million. >> Okay. Do you remember about how much you s I mean back then folks were selling between 15 and 20% of equity in their seed rounds? Were you in that same range? >> In that same range. >> Yeah. >> Okay. Okay. Interesting. (10:05) Do you have any regrets about that now or No, that was the right move. >> No. Right move 100%. Y, >> we've probably raised more than I want because I would like to raise very little, but I have no regrets. I mean, we needed that money. It it it allowed us to do things. It allowed us to hire. It allowed us to grow faster. (10:20) And I think we we absolutely needed it. And I think the valuation was fair at the time. Um, I mean, I think uh, you know, maybe we'll get to it, but on in our series A or you know, that was probably, uh, worse timing because it was at the end of, it was December of 2021. So, it was literally right as we were falling off the cliff, right before we fell off the cliff. (10:42) And so, we got an amazing valuation at that. And then the few years after, it was very hard to maintain that. So, as we had to add money, it was more of like very small up rounds, not not anything significant. So, um, at the seed though, no regrets about that. >> 2.5 million selling 15 to 20% that puts you like call around a 10 million valuation. (11:01) You said >> somewhere in that ballpark. Yeah. >> Yeah. You said series A was quote an amazing valuation. I mean, can you quantify that at all? Maybe a multiple or an actual number if you're comfortable sharing. >> Yeah. I mean, it was um especially at the time it was a really good multiple. I I want to say that it was in the I mean more than 15x. (11:19) >> More than 15x. Okay. Okay. And had you broken a million of AR at that point? >> Oh, yeah. >> Okay. What was the first million year? Do you remember? >> We hit a million of ARR. I you know, I don't remember exactly. I I I want to say it was probably in 2020, 2021. I don't remember. >> Investing the seed round >> somewhere around there. (11:38) It had to have been um just thinking about where we were at generally when we did our A round, but but the A round was a really good valuation and valuations were frothy then. That was the last like that was literally the last couple weeks of these frothy valuations. >> Yeah. And when you I mean if you're doing around a million to two or two million in 2021 out of 15x that means maybe pre- money you were like 30 millionish. (12:01) Is that sort of the right range? >> More than that. Yeah. It was more than that. >> Oh, more than that. Okay. Got it. Interesting. Okay. Well, take us forward. Uh take us into 2024. Your co-founder left. Everyone listening. People deal with co-founder problems all the time, but no one wants to talk about it. (12:15) I'm going to see if I can get you to talk about it. Right. >> Oh, happy to talk about it. >> Okay. Why do you leave? I mean, did you buy him out? Was there conflict? What happened? >> No, I think I think it's natural evolution sometimes. So, as founder roles evolve, I think sometimes you get into a point where a person who's really good at being a founder might not be good at being an executive leader, right, as the company grows. (12:37) So, my co-founder is one of the best engineers I've ever worked with, period. Um, uh, we could not have built Lomatics without his capability. But leading a a big engineering organization as a CTO is maybe not the strongest fit for him at least at that moment. >> Where were you at that point team size-wise? >> Team size I mean our engineering team was is uh yeah at that point was probably 23 people or something like that. (13:10) So it required real structure um and um it needed a real CTO I think at that point someone with real CTO experience and it just wasn't the right fit and sometimes that misalign right where uh a founder wants to be that role but uh you know as a CEO can't does that role doesn't fit and so you know there's no real space for them at that point right and that just happens and so it was a mutual UAL it was a mutual split right it was it was an understanding that like okay this isn't I can't be in that role here and the role that would be for me is I don't really want to do I (13:47) want to pursue more of a leadership thing so I need to go somewhere where I can get that leadership experience and and add that to my resume which would be really really good for for him in this case um and and it ran its course and we we we brought in a much more senior um CTO someone with you know 15 plus years of experience um in order to to kind of lead that organization. (14:11) >> The advice to startups today is listen, even if you love your founder on day one, still put everyone on a one-year cliff and a four-year vest. Were you guys both on that? Like what actually happened to it out? >> No, I mean so at that point he he had fully vested his founder shares. >> Ah, okay. >> Um cuz it was, you know, it was in 200 and uh it was just Yeah. (14:31) 2024 that he left. So, yeah, we we're all all of our investing schedules are always, like you said, four-year vesting, 12-month cliff. That's just standard with everybody. Um, he's still in the business. He still has upside. >> He's still in the business. Yeah. And I wouldn't have it any other way. I'm be very honest, like, he deserves the equity that he has >> and his story checks out. (14:52) He had great things to say about you when he announced his exit on uh on on LinkedIn. And so it's nice to see that kind of these splits can happen in an amicable way, I think, is the lesson from this part of the story. So, it's funny. He it's it's it's it's funny, Nathan. He sent me a text message um out of the blue like a few weeks ago um just sort of thanking me for for everything and and also saying something which I believe in very strongly. (15:17) So, like I always I'm always a Monday guy. Like I hate the weekends. Um as a founder entrepreneur, I hate the weekends because work isn't getting done. Um, and I love Mondays because that's the first day that everyone's back and and and actually working on things, especially on an engineering side. Like I love when product gets developed. (15:37) Um, and so I always I love Mondays. I think that's like important as a founder. You got to love Mondays. And he sent me a text message that says like I I now understand what you always meant by loving Mondays. >> That's awesome. I love that. I love that. Well, that's great that you have a good relationship with him. (15:52) So that's awesome. Um, let's go past that. So that was 2024 23 engineers uh 20 25 was obviously last year. Give us an update on the business today. How many folks are full-time? >> So we are h somewhere in the ballpark of about 70 people. Um we have not the team has grown a bit over the last year and a half but it hasn't grown a lot and that's all again I like bragging about that. (16:12) >> Um >> yeah so I should have said how small is your team and how little have you raised? How little have you raised all in? >> I mean we've still raised a fair amount. We're we're not quite at 30 million, but I think we're probably closing in pretty close to that amount all in. Um but uh but but hopefully we don't need to raise anymore. (16:31) Um >> how much have you been able to hold on to the company considering that amount of raising? >> So I'm still in a pretty good position um myself um in that you know 20% ballpark. >> Okay. So you feel good like that's that's a relative to everybody, right? >> It is. And I think like at this stage if you're, you know, kind of in series B range and as a founder, um, I mean, it depends on if you have a co-founder who's kind of an even split, but I think like being having the founding team be in that 20 to 25% range or thereabouts (17:01) at a B is like a really strong position. >> Um, I think >> one of my my research team, I think, missed something because we only saw a seed for 2.5 and a series A for 10 million. I'm missing like like 15 million of money raised. Where was that? >> So, we did a we did a few. There's just a few things that were kind of quiet that we didn't uh feel the need to announce >> um to announce, but we had a few series A extensions, some small increases, and then we just did a a smaller, you can call it a series B, we don't call it a (17:32) series B. Um, and we weren't public about it, but we did put an extra $5 million on the balance sheet just um, at the end of last year. Um, at a pretty good valuation and designed to kind of uh, get us to this next milestone. The business is growing at a really steady rate, going to become profitable if that's what we want to do. (17:56) Um, and so we decided to do a smaller round, not put a not do a big round because we may not need it and we want to keep our options open. And I think that's an important thing for founders. Like optionality is key. >> Yep. And how many customers are you serving now today? >> We have about 2,000 law firms. >> Oh wow. Wow. (18:11) Can I multiply that times that 400 a month number? That would put you at like what 800 grand a month of revenue? >> We're a lot more than that. Yeah. >> You're more than that. You're Are you more than a million a month in revenue? >> Uh we are right at about Yeah. That's okay. That's great. >> A bit more than that. Yeah. >> The reason I asked that question, Matt, because I'm also going to ask you a tough I'm going to ask you a tough question to answer because you've been really transparent and I'm hoping you stick that way. It's really hard for (18:31) people that raised at massive valuations in series A to keep raising because like most people you can't get the valuation again. So like true or false the extension you did in past this past year in 2025 higher valuation or lower valuation on a dollar than what you got was higher higher. Oh yeah, definitely. (18:46) I wouldn't have done it. Um and and I think look that's when I mentioned our series A. We were a little bit of a victim of the times because we raised our A at a really really aggressive valuation time. And so you fast forward the years and the valuations have changed really hard to maintain that value. (19:03) So we were very strategic about how we raised money over the last few years. And then and then this is like the business is doing really really well. And so there was just no way that I'm that I'm going to be like okay well we raised in 2021 at this valuation. The business is now significantly bigger than it was then. we're not going to accept anything less than than an up round. (19:26) Um and so we did so so we raised at a at at a higher valuation. Um kind of reset >> tighter tighter multiple but higher dollar valuation. >> Definitely tighter multiple. Um but I'll be honest with you like I think um you know as we look to 2026 2027 and we might you know maybe there's some type of transaction we look to do whether it's a really really significant raise or recap or something like that. (19:48) There are opportunities that always present itself and given where we are in the market now and especially with some of the stuff with AI, I think we actually will get back to or we have the opportunity to get back to a 12 or 13x multiple on business if we look to do something. >> Hey, give me this is a selfish question, but whatever. (20:05) It's my show, so I'm going to ask it anyway. Right. We actually talked back in 2020. You were at like 50k of MR back at the time. You ultimately had too much money because you you raised a bunch of money. Let's say you're now at like call it 12 million of ARR. you know, we're doing55 to$10 million debt checks and a company's doing 10 to 50 million bucks of ARR. (20:22) How would you think about over the next 12 months funding the business with more equity versus considering debt? >> So, we have this conversation a lot. Um, and I've been very transparent. I'll continue to be very transparent. I've always been somewhat debt averse because for a lot of reasons. Um, >> tell me what scares you about it. >> Yeah. (20:43) I think the idea that like well like if things go really bad that debt is still out there. Um and um you know being an entrepreneur you're taking a lot of risks. I've seen people get you know I think in in venture debt and and this type of debt situation it's not as you're not there's not a lot of personal guarantee. There's not a lot of of individual uh uh responsibility that's getting put on some of the debt. (21:10) But it's it's also there's a cost, right? There's the debt service. It's going to increase, you know, it adds to the balance sheet. And so, um, you know, I've always been of the mindset that I'm going to give up equity. My equity is really, really valuable, but that's how it goes. Um, I'm going to do I'm going to have strategies to keep myself in a reasonable range, kind of the range I want to be in for equity, and that might mean being re-uped at rounds. (21:33) um you know having options given to me, earning those options you know through equity plans. My board is generally debt averse as well. There are a couple people on my board who want debt and so we've had this conversation at every step of the way. In fact, we just had it at the end of last year with this money that we raised. (21:49) There was a voice on our board who wanted us to add a few million dollars of debt as an option. And I'm not opposed to it. But my thought there was I'm not willing to pay for debt that I'm not going to use. I don't want to just add a cost onto the balance sheet for debt that I'm not going to access. Um, and so ultimately, you know, we we have a board meeting next week and we're going to be really kind of hammering it out. (22:12) But ultimately, my thought was that we don't need it at this point. We have so much cushion. We're going to get profitable. I think as we got as we get bigger, I think debt becomes more attractive. As we get profitable, debt becomes more attractive. >> Yeah. Well, listen. I'm going to make you an offer because I'm allowed to because it's my show, so you can take it with you. (22:31) My offer, just so you have in the back of your head, we would do a $5 million line of credit with somebody like you that's under 60% leverage against your ARR, 50% leverage against your ARR. Uh it's a line of credit, so it can sit there and you pay nothing, >> right? So, to your point, you don't want to take it if you don't need it. (22:44) But if you take it, then we'll do no warrants. There's no personal guarantee. The interest rate would be something like 14% paid back over four years with a 2-year extension. And we could even do like a one to three year IOP intereston period. So take that $5 million offer with you. And if you want to engage after the board meeting, like let me know. I'd love to back. (23:01) >> We'll get So So you you will get an email from my finance director, Brett, probably by the end of the day today. >> Okay. Yeah. We we I love getting creative from a financing perspective with firms like yours. Uh I hate that you're already down at 20%. But you know, you're not down to 1%. So let's keep as much for you and the team as possible. (23:20) >> Yeah. Yeah. It's true. I love that. All right, Matt. Well, you were you were like so transparent. This is amazing. I got to give you a little time just to opine on the future of your space. We see Harvey raising at crazy valuations. We see Spellbook, these sort of hey, automatically redline your legal documents in Word using AI. (23:36) What are what is Law Matics doing related to AI to help folks, you know, do marketing automation better, do data reporting better, etc.? >> Yeah. So, I mean, look, my general thought on this is SAS is dead. So, if if you're just SAS, your revenue is going to go to zero in the next couple years. (23:54) Um, you've got SAS plus AI, which is kind of table stakes now, right? And then you've got SAS with agentic AI. And that's where I think, you know, the real future is in our space. I think, you know, it's again, you got to have the AI in there. That's going to be table stakes, you know, generative AI, co-pilot experience, that type of thing. (24:11) Um, the Agentic is where I'm really excited and where I think we're going. Um yeah, qualify AI is our first agentic AI product. Um you can create agents, as many agents as you want who can, you know, who will learn about your data, learn about your practice area, learn about what makes really valuable cases for you and qualify them, but not just qualify them with a score. (24:37) It will actually give you an action, right? Like tell you what to do with this lead, like you should refer this lead, you should chase this lead. We're very very transparent with our and this is what I think is really important about our space. Too many uh solutions in our space are like the data goes into a black box and just something comes out and you don't know what's happening in there. (24:56) We pull back the curtain on everything happening with our AI model. Um giving you feedback, giving you the why the AI is making this decision, allowing you to give really really detailed feedback on those decisions and then take that feedback into account for the model and help it learn. So, you know, the the world is going to this agentic. (25:14) You've got platforms like Harvey, which are amazing. Um, using the wealth of of data that's out there. Um, I think you're seeing so many of these inflated valuations for companies that ultimately are just doing what someone could do in chat GPT by themselves. And so I do think we're going to see my my guess is that we see a little bit of a reckoning on some of these crazy valuations on some of these companies that are again just glorified chat GPT rappers. (25:41) So I think we'll see a little bit of a of a crash on some of those companies. But the companies like Harvey like what Cleo is doing um with I think it's called Vincent is um is really extraordinary. It's using the data. And it's using every case that's ever been decided in the US, right, and beyond to help you make decisions, to help you, you know, analyze uh how valuable your cases might be and and what what success rate you might have or what to do as a lawyer in order to get the case ready. (26:06) Those are things that are really really interesting from our perspective. We're on the front end, we're on the lead management side, we're on the get more clients, we're on the marketing automation side. So for us, using our data of like this is what makes a good client. This is what works to convert a lead to a client. (26:25) We have done like over 11 million intakes. We have an incredible insight into what works, what messaging works to a client, what you know, what email gets them to come back to your office for a consultation. Like all that sort of data and that's where we want to really build these agents that can help you maximize your own lead efforts. (26:43) >> Matt, I want to get a sense in dollars of how excited you are about the future. Here's the right way to ask this question. If Cleo or someone similar comes and offers you 20x allcash upfront, so 240 million bucks to sell Law Matics, do you take the deal? >> No, not all cash. >> That was a quick answer. >> Yeah. No, I mean that's the answer. (27:01) There's there's there's the number is really really big. If it was going to be all cash, um 20x, I'm doing it, but it's got to be at least 40% roll. >> Interesting. So you you you learned the lesson with my case. Uh you don't want all...