Software for law firms clicks for Clio CEO

Vancouver company has posted 314% revenue growth over five years since overcoming ‘nuclear winter of finance’
Clio CEO and co-founder Jack Newton | submitted

Jack Newton admits his initial strategy for launching a startup in Vancouver was like a hammer looking for a nail.

A decade ago, it was obvious to the entrepreneur that cloud computing was transforming how businesses approach software.

Instead of relying on on-premise software clients would pay for once, Newton and childhood friend Rian Gauvreau realized the industry would soon be turning to the software-as-a-service model.

“We started brainstorming businesses to build,” said the 39-year-old Newton, who specialized in machine learning while earning his master’s degree in computer science at the University of Alberta.

A consulting gig with the Law Society of British Columbia persuaded the pair to launch Clio, a software tool that helps small law firms reduce the time lawyers spend on administrative tasks.

Nine years later, the Burnaby-based software company’s head count has expanded to more than 240 employees while revenue has grown 314% over five years, according to the 2016 Deloitte Technology Fast 50 ranking.

To date, Newton has helped raise $27 million from investors.

But it’s the first $1 million raised that sealed Clio’s fate in the middle of what Newton describes as the “the nuclear winter of finance” otherwise known as 2009-10.

After pitching every angel investor they could find in Western Canada, Newton and Gauvreau were frustrated with the feedback they were getting.

Everyone liked the idea of a company that could provide management tools to small law practices to help them reduce costs, recalled Newton.

But the problem was that everyone was afraid the financial system could fall apart at any moment.

While the co-founders were trying to squeeze water from stone, German investor Christoph Janz came across a blog post detailing Clio’s business model and immediately fired off an email to the company.

The message sat in a spam folder for two weeks.

“He was even more interested because of the delay,” Newton said.

Janz sent off a second message. This time, Gauvreau discovered it after he got bored while on hold during a phone call and began digging through the spam folder.

The German investor went on to lead that first round of financing.

The circumstances of his company’s beginnings, with their element of blind chance and the excitement of unforeseen opportunity, were something that Newton knew he might experience after leaving a stable job at Chenomx Inc., a University of Alberta spinoff company specializing in medical technologies.

Working there as the director of software development, Newton absorbed everything he could from the CEO before realizing what his next career move would be.

“I started to appreciate that while I loved working there, I really wanted to have a shot doing it myself,” he said.

He soon reconnected with his old elementary school friend, Gauvreau, and made his way to B.C. with wife Tonia Newton, whom he’s known since high school.

The three Newton children – ages 5, 7 and 8 – are all campers, and the family travels to Vancouver Island for outdoor recreation when they can.

Meanwhile, Newton said to maintain that work-life balance he’s been using the same trick every since his university days:

“I’ve run every day for 20 years.”

torton@biv.com

@reporton

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