BurgieLaw, which aims to solve legal woes of other startups, raises US$200k seed round

• Believes many startups fail due to ignoring legal foundations when setting up
• Eventual goal is to be one stop centre for technology needs of all legal firms

IT’S rare that you hear entrepreneurs cite startup pain points as being a motivation factor to launch their own startup. Yet, that’s one of the key reasons why Lai Chee Hoe launched his legal startup, Pisquare Sdn Bhd, which owns and operates BurgieLaw.com together with co-founder Louis Gan who is also CTO. 

[Paragraph updated to add name of incorporated company.]

“A lot of startups fail because there are no legal foundations to their establishment,” he says, pointing to the GrabGas fiasco. “The issue would have been averted if there was a proper agreement spelling out the obligation of the parties, remuneration terms and an exit clause.”

Beyond the vague terms between founders, lies an even greater danger warns Lai. “I have seen so many startups fail because they have had no clear legal advice and this comes back to hurt them when a VC comes into the picture.”

According to him, VCs will be put off by the fact that their due diligence will reveal a plethora of potential landmines such as no paper trail that sets out type of shares issued, arrangements and exit options with angel investors, agreements with key personnel not done and NDAs not signed with key partners. “All these will immediately put off an investor,” he warns.

The pain point that BurgieLaw wishes to solve within the startup community specifically, but also for small and medium enterprises (SMEs) ie providing affordable and identifying the right legal experts, has resonated with Andrew Tan, managing partner of TinkBig Venture who believes that legal services are almost mandatory for both SMEs and startups. Based on this belief, has just invested US$200,000 (RM880,000) in seed funding into the legal tech startup.

“The first thing a VC would look into a startup, before deciding on whether to invest, is the method of incorporation, the shares structure and various agreements binding its founders, employees, key personnel, suppliers etc. If these legal matters are not in place, a VC will not look further no matter how much the revenue one can bring in,” Tan says.

In seeking his seed round, Lai realized that most VCs were not familiar with the legal tech space but was fortunate that in TinkBig, he found one that saw the value in legal tech.

Aim is to be one stop tech centre for legal sector

Up to the point of the TinkBig funding, both founders have invested close to RM200,00 of their own money into BurgieLaw. According to Gan, “We spent a lot of time validating the idea and it was only in the second half of 2016 did I join full time because I saw the need for a startup like ours to help reduce the failure rate among startups.” BurgieLaw was launched in February 2016.

The founders actually believe that having sound bookkeeping is equally important as having sound legal advice but with their legal background, that’s the pain point they are best equipped to solve.

Marketing and business development will eat up the biggest chunk from the funding raised with the focus on acquiring registered users and signing up monthly retainers.

The next priority is to develop technology for the legal sector. “The legal profession is operating in a very archaic fashion. Some of the practicing lawyers still do not know how to track their amendments in Microsoft Word documents,” shares Louis.

“We hope to uplift the tech usage in the legal space which includes digitization, digital archiving, payment through innovative technologies, cloud services and even e-discovery. Imagine if all these are being done digitally, law firms will no longer be required to invest in papers, printers and storage costs – therefore enjoying immediate savings,” says Lai.

Being able to create this legal tech suite of services will help the duo achieve one of their key targets – to be the one stop tech centre for legal services. If a lawyer wishes to set up their practice after approval from the Bar Council, the duo envision BurgieLaw helping with all the tech infrastructure, designing, digitization, cloud computing services and payment technologies. “After all no one knows the legal industry better than we do,” claims Lai.

Making legal costs reasonable

Explaining how they went about making otherwise costly legal advice reasonable, Gan and Lai explain that lawyers with different specialities have their own non-peak hours.

The duo went about identifying the spare time for each lawyer and proposed that they make themselves available to customers who want immediate advice. The fee charged would also be lower due to the non-peak hour. But there was also a carrot pitched.

“We explained to our pool of lawyers that the customers they engage with for these quick consultations over the internet or via phone could just end up giving them more work or referring them to others,” says Lai.  

“One important point to note is that we work within the existing legal framework and we don’t tout for work. Touting is construed very rigidly in the legal profession Act and we have taken pains to list out all the important criteria of the registered lawyer to enable customers to choose their preferred lawyers on BurgieLaw.com,” adds Lai.  

Special package for startups

BurgieLaw has teamed up with almost 150 lawyers to introduce a basic package specifically for startups to enjoy access to basic legal access at a nominal rate of RM99.00 per month. This entitles startups to at least seek verbal advice to avoid any mistakes.

“For example a person may approach a startup to be its CTO and the startup may want to know if a restraint of clause is applicable in Malaysia. In such a case, they can immediately email, message, call the lawyer assigned to them to get instant advice for them to make swift decisions. This could save you from failing altogether in the event the CTO resigns and sets up an exact similar startup as yours,” explains Lai.

As to whether BurgieLaw will remain a single market service or can scale regionally, the duo say that decision will depend on their growth and on meeting certain milestones set by TinkBig.
 
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