Khurram's Quorum – Ep 016: Avaneesh Marwaha on the #1 skill lawyers need to develop

My guest today is Avaneesh Marwaha, CEO of Litera, a legal tech company. I've used Litera myself and found it genuinely useful, so I was looking forward to this one. We get into the goals he wrote down in his mid-20s and is still living out today, what he has learned building the company, and where he sees the legal profession heading.

Top Insights

• In his late 20s, Avaneesh wrote out a five-year plan broken down by quarter plus a higher-level 20-year plan on a legal pad, tracking his progress against goals across professional, personal, monetary, and civic tracks.
• Litera grew from 85 employees in 2016 toward roughly 700 by the end of the year; under earlier owner K1 Capital it went from 16 million to 42 million dollars in revenue.
• The company builds its product decisions around three focus areas: helping firms improve client retention, increase their margins, and improve the day-to-day experience of lawyers.
• About half of Litera's annual growth comes from acquisitions and half from selling its own technology, backed by a disciplined post-acquisition integration playbook.
• Asked the single most important skill for lawyers now, Avaneesh names collaborating with clients virtually, using tools like Microsoft Teams alongside email.
• He plans to spend his next chapter on education, focused specifically on raising high school graduation rates.

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Full Transcript

Khurram Naik: This is Khurram with Khurram's Quorum. My guest today is Avaneesh Marwaha, who is the CEO of Litera, a legal tech company with some pretty big ambitions. And I've actually used Litera. I found it really useful, so I was looking forward to this conversation.

It was fascinating. I think the thing about Avaneesh is he's had some very big-picture thinking, some very strategic visions for himself, that we discussed early on. We talked about some of the goals he set for himself in his mid-20s that he's still living out today. So I think that forward thinking is really impressive.

But what's also impressive is how down to earth and flexible he is. We discussed some of the things he's learned along the way, and you'll definitely get a sense of humility and a lack of ego, which is really impressive. So I think there's a ton of great insights in there for lawyers, or for anyone who's looking to learn more about where the legal landscape is heading, and anyone who wants to think, from first principles, about how to enter a new domain, how to grow something, or how to enter into a new frontier of some kind. So I think there's lots of insights for lots of people here.

So I hope people enjoy it as much as I did. Avaneesh, great to catch up again.

Avaneesh Marwaha: Yeah, good to talk to you again.

Khurram Naik: Well, you know, we were just talking about a really interesting concept, and you were talking about the relationships you focused on as you've advanced yourself professionally. You talked about the role that focus had in how you selected and cultivated relationships as you've advanced. I think it's a really interesting concept. And it applies to me as I enter a new phase of entrepreneurship myself, learning who I need to rely on and whose ideas just aren't as useful. And I'm sure other people are at similar reflection points for themselves.

So I'd love to hear more about how that philosophy has informed your life. And an interesting jumping-off point is when you made that realization, and what the circumstances were that led you to make that switch, and what that felt like. So can you tell me about that?

Avaneesh Marwaha: Yeah, great. That's an interesting topic. As we've grown and our careers have evolved for my wife and me, there's been some intent, not necessarily purposely, around who we naturally gravitate our time toward. When I sat back in my late 20s and wrote out the goals I had personally that I wanted to achieve in the next 15 years, so by the time I'm 45, and the journey I want to go on personally and professionally, I realized that if you were going to achieve those things, you had to change things about your life along the way. You think about phases of adulthood: when you're in college and right out of college, it's a fun time, you're learning how to be social, you're learning how to navigate different relationships. As you move into your late 20s, you're probably starting to look at the mentorships of people you want to follow, you're slowing down the socialization a bit, you're getting more interested in culture and travel, and you might find folks with the same interests as you.

And then at some point, for many of us, we really want to achieve professional greatness or monetary greatness. And to do so, and this could be wrong, I think you need to surround yourself with people who are like-minded during that phase of your life. Sometimes the folks you hung out with, who fed and kept your soul full in your late 20s, early 20s, and late teens, just can't have the same place in your life. It doesn't mean they can't be your friends. It's just difficult to find the opportunities to be together, because you have to surround yourself with folks who are like-minded in the phase of life you're in.

So a lot of our friends and relationships now, we tend to find ourselves with folks who are on some journey, whether it's a physician who wants to become the top of their profession and be the top physician in the region for their craft, or someone in banking and finance who wants to hit really great returns for their shareholders. They're all motivated by professional achievement, and ironically they want the same thing for their families, they want to be good people, and we can share a lot with each other. When I have an issue at work, or someone else does, even if our industries or professions are different, there's a lot of commonality in what we deal with. So it helps us find solace with folks who went through the same things. Now, we do have friends we've been friends with since college, and those relationships are different, right? We'll get together and it's meant to relive the past a bit, reminisce, and share memories of what you all achieved over a given period of time, but you're probably no longer driving each other to do something great, because you're at different stages of your lives and chasing different dreams.

So we just find ourselves now more and more spending time with folks who are driven for the same purpose. I always use the word shed, but we haven't really shed anyone. We just naturally don't find the opportunity to spend time with folks we knew in the past. And that's the thing that's helped us, because now we're surrounded by folks who are equally driven. They're not giving us advice and counsel against doing something because they wouldn't do it. They're giving us advice and counsel on how to do it better.

And those are great friends to have, I think.

Khurram Naik: So it sounds like a variety of people. In the past several years, where have you met this variety of people, who have been kind of very different from your past circles?

Avaneesh Marwaha: It's definitely harder the older you get. That's the nature of being human. I think the older you get, the harder it is to get out of your comfort zone to meet people. Typically it comes from one person you might know, and they know someone else, and you slowly find your way into new relationships over time. But because it's so difficult, the number of people you have in your circle does get smaller, because it's hard to find 10 or 15 people to hang out with. You may just have three or four.

And for me personally, that's okay. For some people, they need that large group around them for different purposes. I just don't want the time or the brain space to manage that. So we've been fortunate to find three or four people we like to hang out with, and I don't know if it's being lazy or not, but that's been okay.

Looking back at the last five years, most of the success we've had as a family has come from this tight circle we've had around us. It's worked out well.

Khurram Naik: So what are some insights, I mean, you are the CEO of a legal tech company. I don't actually know how you define the nature of your company. So there are certain classes of problems you're going into and they look a certain way. And if you're talking to somebody in a pretty different domain, it might take a different type of practice. Superficially it's very different, but maybe structurally there's some commonality. So can you think of an example of someone else becoming an expert in some other domain, and share a story about lessons you've learned from another area and how it's applied to yourself and your work?

Avaneesh Marwaha: A topic that was recently chatted about in our circle of diverse friends was this notion of how you handle the risk of cancel culture at work. As a leader, if you say something wrong, your employee base could take it a certain way when you had no intent behind it, or you could say something with belief and conviction, and you know it's right, but there's a population of your organization that still believes the opposite. And how do you handle those situations with grace and humility? I think it applies across all industries.

Physicians have to deal with that routinely when they give advice and counsel for medical treatment to their patients, because their patient may not believe in X, Y, and Z, or patients come in with strong opinions of what a doctor should and shouldn't be doing. And we find those kinds of commonalities to talk about, and we spend hours brainstorming ways to resolve it. There is no solution other than to have solace that this just sucks and you've got to deal with it. So that's probably a pretty decent example of how we, as a group, have conversations to work through stuff. Cancel culture at work right now, I think, is one that's pretty ripe, and one we try to solve during different times of the year.

Khurram Naik: And so going back to the goals you set, do those goals stay pretty stacked, and you kept pursuing them, or have you changed them? Do you still remember exactly what those goals were?

Avaneesh Marwaha: Yeah. If we were in my home office, I could show you this legal pad that I actually wrote them down on. There are two sheets of paper. The first one was a five-year plan broken down by quarters. It's way too descriptive. And then there was one behind it that was almost like a 20-year plan that was much more high-level. And I have looked at it randomly. I've never changed it. I haven't gone back and updated it with a red pen. I just said, that was where I was when I wrote it down back then, and how am I tracking toward achieving those things?

I think there's value in handwriting something like that, even versus digital. Digital goal setting is great, but it's easy to hit delete or open a new document. Handwriting requires more thought, at least for me. I'd say for certain, you know, there was professional, there was personal, there was monetary, there was civic, and miscellaneous, like five tracks that I created. For most of them, I'm on track, maybe like 80% there. A couple I'm like 150% of target. So it's felt good, knowing you have to pivot along the way.

You're making different decisions. I wrote that document when I was a lawyer, and I'm far from that today. So I planned a life as, at that point, essentially a lawyer with some entrepreneurship blended in, and I ended up nowhere near being a lawyer long-term. I'm in software and productivity, and it's a pretty different arena. But I've checked in on those goals along the way to say, this is what I wrote. My 25-year-old self, Avaneesh, felt this was a happy world to be in. I'm now 40. Does that feel right? Did I have the right intent back then?

So my wife asked me, am I going to redo my next 15 or 20 years at 45? I haven't decided yet. I don't know if I want to have targets for the next phase of my life or career. I think I'm going to live it and see what happens. But I definitely told myself that between now and 45, I want to be really intentional in my career and what I do, and have an outcome that makes sense.

Khurram Naik: Can you share some of the goals you set?

Avaneesh Marwaha: There were some around what capacity of giving I could be in to help the community, whether it's donations or other things we could do. Another one was being married and having a kid. Those are routine. The next one was spending time with parents. That's probably where I'm at 80% of my target. Even though they live close, it's really hard to navigate that. On the fiscal side, I had a dollar figure I wanted to have as assets by the age of 45. I think I'll hopefully be at three or four hundred percent of that. So it was really specific. I actually wrote down the dollar figure I wanted to have in my savings account at different ages along the way. It was a way to set some measurements along the way, because you need some metric-based goals. I can't just be like, I want to climb Mount Kilimanjaro. That's one outcome. But if you want a long-term basis, you need sticks along the way that you can measure against. So those are the high-level things I had on that sheet. It's on my desk. It's folded up, and I actually saw it last night.

Khurram Naik: That's cool. And so how did you make that actual for yourself? I know you said it was broken down by quarters. It's one thing to say that. It's another thing to actually make it happen. So on a weekly basis, how do you think about the goals you're hitting on a weekly or monthly basis? And what are the things you do to actually hit those goals?

Avaneesh Marwaha: I think for a long time now, every Monday or early in the week, I write down no more than five things to get done that week. I'm not a daily goal setter. I know some folks will set three things to do in a given day. At this point, I just can't predict my day enough to say I can achieve that. I don't like setting goals that I can't hit. Maybe one of the five will be a stretch, but I think as human beings we have to set achievable goals and stretch goals. You can't just be all stretchy stuff, because if you don't accomplish things, you get goal fatigue and you'll stop doing it. So sometimes on the list of five, two things are really tactical and easy to do, and I know I'll get them done regardless of time. One is a must-get-done that will require intent, and then a couple are really stretchy. And that's helped, at least in the last three or four years, to make sure I get this next run of my life under control, because there's so much happening running the company that you can lose sight of the small wins along the way to the bigger objective.

I look back earlier in my life and career, and I didn't do weekly stuff. That's why the quarterly stuff made sense, because you could set one or two things to do in a quarter. When I was a lawyer, I'd say, I want to get five new clients, or I want to bill this many hours this quarter. This is a habit of achieving success. It doesn't work for all parts of my life. I can't set health goals. I can't be like, I'll work out three days a week. I will never hit that objective. I can hit my career objectives. I can hit my other objectives, but there are certain ones I know I can't. So I don't need to set those goals anymore, because I think, for me, you have to have a sense of being able to achieve it to set it.

Khurram Naik: So the natural question is, in the past several years, how have your priorities shifted? You've been using the goals you set in your mid-20s, and it sounds like you seem to hit them and even exceed them. So how do you shift your priorities in these goals? Are these actually more important than others?

Avaneesh Marwaha: So there are almost zero goals in my near term that are like, I want to hang out, I want to do fun stuff with friends. All my goals are how much time I spend with my wife and my kid. Make sure I'm home for that. Make sure I do as many pickups and dinners and drop-offs as I can in a given day. So they're really focused and targeted on things that are meaningful to me, regardless of my circle. Even with my friends' circle, I'm like, I still need to be selfish and do what I need to do. I spend probably zero time at this point making sure someone else is happy besides my wife, my kid, and my parents. But really, as a unit, that's number one. And I keep that top of mind. So all goals trickle off that. And that gives me the time I need to get stuff done. I add nothing else to the list. If it's not that, and if it's not the company, then pretty much everything else is at the bottom. There's no reason for it to even show up on the list at this point.

Khurram Naik: Are there things you're doing for yourself so you can show up for, let's say, those number one goals? Are there things you're doing for yourself to make sure that happens?

Avaneesh Marwaha: Yeah, part of it, I kill myself. So I wake up at like five and do phone calls from five to six-thirty or seven, in that range, so that way I can do breakfast and help with getting ready and getting out the door for school. And then I grind from like eight to four. And then I make sure I try to be around for pickup and dinner. I probably miss one or two of those activities a week. And then I'll log back on to work every night from 8 p.m. on. So I stretch my day and stretch my productivity from time start to time end to give myself four and a half hours during the day to hang out when she's awake and not in school. And I get to be part of all those things. That's how I've managed it, and that's what gives me the greatest relief and fulfillment. Because I think if I was just someone who worked and didn't get those moments, then I would probably not be a good leader in the business, or a good partner at home, or a good dad. So personally, at this point, I stretch myself where I need to, to make sure I'm available for those four hours a day.

Khurram Naik: How busy are you now compared to other phases of your career?

Avaneesh Marwaha: This is the busiest the business has been. I used to mentor at this high school in Chicago. I remember asking these freshmen and sophomores what they wanted to do when they grow up. And they'd all say celebrity names or entrepreneur stuff. And there's this notion around celebrities and people who have a startup or are great business leaders that they just fell into it. Well, they got lucky, they fell into that money, or they fell into that fame. Like there's no work that goes into it, right? Even Jay-Z works from five a.m. until 2 a.m. and probably isn't drinking during the week or around the weekend. It's all in, and it's all image.

So anybody who wants to be successful in any given field, anything they want to be good at, whether it's the Olympics or being an athlete, those folks are exercising and working out to be the top of their game. It takes time, it takes effort, it takes energy. So we're in a phase of the business now where it's massive growth. We're being really successful with our customers. I don't want to lose out on opportunity because we've taken our eye off the prize. And we're scaling really fast. We went from a business that was 85 employees in 2016 to around 700 by the end of this year. And that requires a lot of diligence, a lot of intent, and purposeful planning. So it's definitely the busiest the business has been, for sure.

Khurram Naik: And the goal mindset, the application of those goals, making them tangible and achievable, is that a process you've applied to your company, or is that just for you? Is that working?

Avaneesh Marwaha: Yeah, yeah, we applied it to the company too. We set three-year targets and then break it down to annual targets, then quarterly targets, then monthly, and then, if possible, you go weekly. That creates clarity in the business, and top-down, everybody's working toward it. We try to be as metric-based as possible. You try to celebrate when you achieve different things, whether it's bookings or product releases. You try to have retrospectives on those good and bad moments to get better for the next run. And, again, like anything else, you've got to do it, you've got to talk about it, you've got to tell other people about it, because then they hold you accountable. And then you make sure you get a chance to think about the success you just had along the way. Goal setting is easy. It's just, how do you manage it once you've set it? How intent are you on actually doing it? Like I said, I'm not that intent on doing health goals today. But maybe that's my target after 45. Right now my priority is grinding and making this happen. So you have to have intent and the desire to achieve to set those goals.

Khurram Naik: So what is the intent you've set for Litera?

Avaneesh Marwaha: Yeah, so our first goal recently was to become a 200 million dollar business. And we feel like that's in sight in the next six to seven months. We are in the middle of thinking about the next chapter of the business. I'd love to see it double in size in the next three or four years. We want to continue to solve problems in a lawyer's day-to-day, creating content, doing deals, litigating, managing their day in a way that makes sense, and just be a really good partner to firms globally and have longevity in that. So I think we have a really good opportunity to be the market leader for 10, 20, 30 years for what we do. And I have no desire to lose to the competition. So we're really focused on client engagement and happiness that leads to long-term growth for us. So we're planning around and building plans around how we scale this business for the next chapter, hopefully doubling in size.

Khurram Naik: And is there any sort of analog for the kind of company you're trying to build, some other industry where you say, OK, this is the kind of position we have in the industry?

Avaneesh Marwaha: You know, nothing lines up 100%. You try to look at pieces of other organizations. They've all got their pros and cons. But looking at how Salesforce has approached the market with the CRM and then over time added other ancillary things that make sense, from proposal generation to quoting to pricing, and looking at how SAP has managed to grow, and looking at Dell and the Harvard perspective, I think we try to emulate where it makes sense, and then try to draw lessons learned. So we want to have a good user experience. We want people who are happy to work with us. We want lawyers to really enjoy technology and make sure it works for them. And then we want to say sorry if we get it wrong and make it better. So we try to find the best places to emulate, and where we think we're better, we put our head down and focus on that. This industry of law is nowhere near the size and scale of other industries, but it's very captive. And if you're a brand that maintains trust, integrity, and quality, you have a long runway with the firms and lawyers. So that's what we focus on.

Khurram Naik: And so how is the opportunity to identify and change now versus when you first came to Litera?

Avaneesh Marwaha: Yeah, good question. When I first came on board, we had a very humble target. Can we fix the drafting process at a lawyer's firm? It is the most boring thing to try to fix, putting words on paper. But when you step back, words on paper is what pays the bills. That's what someone is hiring a lawyer for. Whether it's a husband and wife creating their first trust or estate, or a small business owner defending themselves from a slip and fall, it's all words on paper. And it's a very disjointed way of working today. You have to use different vendors. You have to start from scratch. You have to unwind documents. I think our first mission back in late 2016 or 2017 was to solve that.

So we went out and bought the best brands in this space. It fixed a very humble problem of putting words on paper, and that led to great success for us in the first few years. Since then, we said, wow, we did a good job there. The firms trust us to look at more opportunities. So we expanded our lens and asked, what else can we fix? The first workflow we went to after drafting was transaction management. So we built the first global transaction management platform, allowing people to do M&A transactions, fund formations, and commercial real estate transactions online. And then we went to litigation management, helping legal teams collaborate online on creating timelines, witness prep, and deposition prep. And then we went to data management and firm intelligence, asking, how can we use data to increase matter management efficiencies at a firm and increase the experience firms have with business development? And I think that has a long runway for us going forward.

So we started with a humble view of consolidating a bunch of vendors and building a good drafting solution, to now asking, can we consolidate a bunch of workflows under one umbrella so a firm can stay with one vendor? So it's really changed from a simple workflow to really solving massive problems and opportunities at firms today. We've been very fortunate along the way to have really good clients and customers to work with who give us good feedback that we can put back into our product and our investment thesis.

Khurram Naik: So what is that customer discovery like? Because when I think about lawyers, in my experience, lawyers so much are incentivized by billable hours and not so much incentivized to work efficiently. And the way law firms work actually hasn't changed much in, say, 20 years, maybe longer. So with that, how are you gathering information about the things you can improve, because I feel like sometimes when you ask, hey, what could you improve, they'll say, oh, not much?

Avaneesh Marwaha: So we start with some pretty clear focus areas for the business. About four years ago we designed three focus areas for us to always improve on and have an impact on with all our decisions. So one is, can we help lawyers improve their client retention? Clients can buy legal services from anybody these days. They can go online, search, find hourly rates, and go hire someone to do something. I fundamentally believe that clients will stay with lawyers and partners if that firm can produce high-quality work on time and on budget, over and over again. And the area we haven't impacted historically as an industry is quality. I think we're doing that now, saying we want fewer errors in documents, we want clean paperwork to look at. I don't want to catch an old party's name in a document ever again. We think we can impact time with technology. So I don't think of it as efficiency, I think of it as meeting deadlines. And then third is budget. So what can we do to remove unbillable time from a project, allowing folks to focus on higher-value tasks that need the budget? So that's number one.

Number two is, can we help the firm and lawyer increase their margin potential? Can they remove waste in the process and focus on higher-value tasks, which always get paid for? Can we help them look at prior work to determine future pricing and budgeting for matters? So, from top to bottom, can we help you build a matter on day one the right way, with the right pricing and the right team? And then, can we make sure you do the work in the most effective way possible?

And then the third is user happiness. Lawyers and partners, we know they work after hours. Most first, second, and third-year associates are working after hours. What can we do with technology to help them feel confident that when they're working those hours, the outcome at 7 a.m. is as good as possible? What can we do to give partners the resources so they know what's happening in their matters and know how to have an impactful conversation with their client? So with those three focus areas, we've been solving some really critical problems. And the challenge I get back to partners who bring up, well, I don't want you to impact my billable hours, is: have we reviewed how much of the time you spent today actually gets billed, or is recovered from the bill?

I buy legal services today. We redline every invoice we get, because we're like, our technology solves this, our technology solves that, so why am I paying for it? Why would I pay for you to create a first draft? A first draft should not take you five hours anymore. A workable first draft of anything should take minutes. You get first drafts pretty quick these days. You shouldn't spend 18 hours proofreading a 500-page document. You shouldn't be spending this much time doing other things. Now, if you remove all that waste, that typical unbillable time, and allow those folks to think about theory, client development, business development, and new ways of finding revenue for the business, isn't that better time spent than doing things no one likes to see on the bill anymore? So efficiency is definitely a hard word. I think of it more as risk management, meeting expectations on time without killing yourself, and having high-quality work go out at the right price. So it's hard to argue against those few things, I think, for any sole practitioner all the way up.

A sole practitioner is typically doing fixed-fee work too. And if you're doing fixed-fee work, it's all about how efficient you are. The faster you get something out on a fixed fee, the better your margins are. So why wouldn't you want to use technology? It's not about how many hours you spend doing something. It's how fast you get it out the door. So there are definitely different ways to look at technology and why you invest in it, I think.

Khurram Naik: Are there any clients, kinds of lawyers, or types of firms you're not going after?

Avaneesh Marwaha: I hate to say we don't go after a certain demographic. We have great opportunities with trust and estate lawyers, but that's a tough area to get into. IP attorneys can have some great results with our technology, but I've learned over time that IP attorneys just like to have things their own way. So we're not quite in that game yet, but I'm hoping in the future we will be. We're just entering litigation really healthily, and I think we have a long way to go there. Where we're probably not really good today is those small regional needs a practitioner may have. You know, we look at New York, Chicago, Illinois, California, and Texas. Those four states typically have a lot of great legal technology being developed because the volume is so great. But if you're a practitioner in Oklahoma, what's happening in your local state or city that you can use technology for? So we're not quite at that level yet, but I'd love to have an impact on all 50 states to some degree. Right now, unfortunately, a lot of our focus goes to the big four states. So there are opportunities there for folks who develop technology for localized regional needs. Over time those become really strong areas for us to go for acquisitions, and then we say, you built something, we'd love to use it globally, and we put it together.

Khurram Naik: So litigation is maybe a new area. Let's take something like M&A. What's one of the things that Litera knows about M&A practice that many or most M&A practices don't know about their own practice? What insights do you have about what makes for a successful M&A practice?

Avaneesh Marwaha: So there are a couple we could probably talk about. The one that I think goes unrecognized, and we only have this lens because we've been the client so many times on M&A deals, is that the client experience today in an M&A transaction is not good. Even if the firm tells us they're going to give us white-glove service on a deal, that's not white-glove service. It may have been white-glove service back in the 90s or 2000s, but the expectations of clients today, when we all live on this device, we all live on an iPhone, most people now live on an Apple Watch or an Android device, are different. Why are we still doing things the way we did in the 2000s? There isn't a single client that I would argue is happy with the way we engage in M&A transactions today. This should be a happy moment for most founders of a company. This should be an exciting time for people to realize a liquidity event for the hard work they've done. And the process doesn't allow for that. There's too much risk in the process.

We're not doing enough due diligence on the documents in the transaction. Lawyers will routinely say, which of the top 10 contracts are we looking at? Give us 10 contracts out of a thousand to look at. That's not the right way to do due diligence. You need to review every contract, but we can't because it's too expensive. We should have zero wet signatures today. There's absolutely no reason for a wet signature. So there's a lot of that, where I think law firms still believe white-glove service means giving us more associates to throw at the client. And that's not the case. Again, I buy legal services. The last thing I want to see is an email to me with 10 other people on it. It doesn't make sense. And this is not me trying to force technology. I just don't like the feeling of getting an email like this, where if I respond, all 10 people are going to take five minutes of doc time. So we have to recognize now that white-glove service isn't the same as it was in the 80s.

And I think the firms that are evolving, and there are some great ones out there evolving and really thinking about how to engage with their clients long-term, may end up being the long-term winners here. And everyone else will just be following for the next 10, 20 years to catch up. We have to recognize that you have to be nimble, you have to be agile, and you have to be open to new ways of doing work. The pandemic should have been the catalyst for a lot of change, and a lot of us would argue it wasn't enough. There wasn't enough investment in innovation or ideation during this period to evolve the industry. Some happened, but not enough.

Khurram Naik: So you've talked a lot about how your experience as a buyer of legal services informs your vision for the product, and the goals you're setting to help your clients, the law firms, develop their practices and find new areas of growth. But you also talked about their clients, the clients of the law firm. So is there some tension between trying to optimize the experience of the law firm versus the law firm's client? How do you solve that, I guess?

Avaneesh Marwaha: It's difficult. We spend time with some of the large corporates out there, just showing them what we provide as opportunities and investments by law firms. Law firms have access to this type of technology. What do you think about your outside counsel using it? And that creates conversation between the client and outside counsel, saying, hey, we just saw a great litigation management tool, how come we're not using that in all our cases? So that's another way we try to influence change management, to say, I think your clients want you to do this. Whether it's our tool or not, you should start considering how to increase your spend or investment in these areas. So we try to bridge that gap where we can, as much as possible.

Khurram Naik: And you talked about this very M&A-heavy approach to synthesizing different workflows and making a more unified workflow. Is that a unique strength you have, or is that something you're seeing other operators effectively use as well?

Avaneesh Marwaha: No, I think it's been a growth lever. It's been around for decades. Half of our growth in a given year comes from M&A, half comes from selling our technology and having success there. What I would say is unique about Litera is that we bring good software M&A methodologies to our business, and we try to run a really strong integration playbook. We have a great partner in our ownership that is willing to make investments and make sure integrations go well for the long run. We're not looking for short-term wins, we're looking for real long-term sustainable solutions. And by having that long-term lens, by running a really strong playbook, I think we've had strong success in M&A and post-M&A opportunities. I can't speak to the other folks in this space who do this, but for us it's because it's so much a part of our DNA and it's what we do here as a business. We take it seriously. It's not just buy the fund, there's intent, there's a purpose, there's a goal, there are objectives, there are roadmaps built for each deal, and we look at them and measure them: did we hit them, did we not, did we over-achieve? And then we refine it and say, for the next deal, what did we learn from the last one to become better?

Because otherwise, if we mess up, our ability to go back to a customer and sell them something new goes away. So we're willing to go slower, willing to have a little more intent in our M&A and integration work to make sure we maintain trust and integrity with our customers. Otherwise, why would they trust us in the future? So we've been fortunate. I don't think it's unique to us. I think other people do this in the industry, and it's the right approach to innovation and scale, but you just have to make sure you do it right and spend the time and energy on the post-integration work. It's easy to buy. It's the effort of the integration work that's hard. The buying part is the easiest part of the whole thing. It's how much energy you put into the back end that's important.

Khurram Naik: What would you say is the most successful purchase you've made?

Avaneesh Marwaha: Well, we've had a lot. I don't think we've had a bad one. We've been very lucky. I think we've hit the market at the right time with the investments we've made. I've been pleasantly surprised with some of the technology we bought back in 2017 from the early investments we made. We bought a technology being used for the creation of documents, and the underlying code allowed us to build a clause library on the side that no one had ever thought about. That was a great opportunity for the business, because we had a plan for it, but then it resulted in another product offering we didn't know existed there. We've also had some great culture wins, where people come in and change their business for the better with their new culture and how they approach it. So it's hard to say what's the best, but we've been very lucky that every organization that's joined us has brought huge value and talent to the business.

Khurram Naik: And you mentioned the ownership has been supportive and investing in your business. So can you tell me who the ownership is? Tell me more about that.

Avaneesh Marwaha: So we are backed by private equity. Our primary investor is here at Litera, and prior to them, from 2016 to 2019, we were owned by K1 Capital. And they've both been really great for the brand. K1 took us from 16 million to 42 million dollars in revenue, and helped us build the first set of foundation, skill, and muscle around M&A and integration work. And then under our current owners, we've really been focused on bringing the brand out to the rest of the world, becoming more global in nature, expanding our product and tool set, and getting really good at customer engagement and happiness. So that gives us a long runway with our brand for the future. They've taken the business almost four or five times bigger in under three years. And I think we have a long runway with them as well. They're really strong investors who believe in this industry for the long run. So we're really working on a 10, 20-year vision here of how this will take place, to become the name in legal.

Khurram Naik: What are the reasons not to go public today?

Avaneesh Marwaha: It's a good topic. We're seeing brands go IPO. That's exciting for us as another player in the space, to know that the market is responding well to this industry being investable. I like the nimbleness of what we have today as a business. We can take risks. We can try different things and not have significant reporting requirements. You can do things that are riskier, short-term or long-term, and place some interesting bets on the table, because you're working with an investor that believes in the same thing. When you go public, there is a fiduciary duty to potentially be more calculated in those things, maybe take fewer risks, maybe be less agile, and run a more consistent, investable approach. So right now, for this business, I think we're having a lot of fun. It feels like a startup, even though it's been around since the late 90s. And we want the nimbleness and agility in our short-term decision-making. We like being aligned with one single investor at this point, because we're able to make decisions really quickly. We can hop on a call and talk about something and go do it. We're not having to think about how it's going to impact the quarter, or how it's going to impact our image on the street. We are focused on our customers first, and our employees, and making sure we do right by them. If we do right by our customers and employees, our numbers will always follow. And it feels good to be in that spot right now.

Khurram Naik: And earlier you were talking about sales and growth. So what are some of the pros and cons, or challenges, in selling to lawyers? Tell me about the distribution of your products.

Avaneesh Marwaha: The most difficult thing about selling to law firms is getting the mindshare of the lawyer. Even if they want the technology and believe it'll help them, it's hard to convince someone to spend the time to learn how to use it, because it takes them away from their day job. So we know that. I practiced law. There are other folks in the business who practiced law. We understand what it is, the problems they face, how lawyers measure their time, and how they want to use it. So we think about things in six-minute increments. How can we deliver education in five minutes versus seven? Because if you go seven minutes, you've now cut into another one of their blocks. Our videos, we try to make digestible in those periods of time. We try to align ourselves with CLE courses, so we can talk about something like risk and maybe tie that to our technology as well, giving lawyers a chance to get the CLEs they need while learning about what technology is available, whether it's ours or someone else's. There's a way to get innovation in front of them. So we look for different ways to get visibility within a firm.

The greatest way it happens for us is lateral moves. A lateral leaves a firm and moves to a partner position somewhere else. They bring all the technology they've used along with them, and it opens up the eyes of everybody else in the new firm. So again, if we maintain good relationships, integrity, and quality of software, people talk about it, it gets out there, and it makes the buying process easier. So we try to have an eye on the end user as much as possible in everything we build and do, so they find value and want to come back to using it.

Khurram Naik: You mentioned CLE. What sorts of media or distribution do you use, to get access and stay top of mind with these lawyers?

Avaneesh Marwaha: Every firm has a different culture. Some firms have very rigorous ways of getting technology out. They have innovation groups, they've got the practice heads come together often, there are partner retreats where we can go and show off technology. Regional ABA events are a great way to get out there and showcase different innovation technologies available. But obviously, webinars. We created our own TV channel on the internet that we broadcast for three hours a day, live content about different things in the industry. So my lens is, at this point in time, we have to be everywhere it makes sense, and we have to try everything at least twice. We have to give lawyers every opportunity possible to look at content, learn from it, and have opportunities with it. When we look at our SaaS-based solutions, we can do things like in-app instructions, in-app videos, and in-app how-tos to encourage more usage and adoption of technologies. So we're looking at all kinds of different ways to guard the time and bandwidth of an attorney to look at technology.

Khurram Naik: So tell me, there's any number of lawyers taking a look at this who recognize their firms need to change, and recognize legal tech as an area. So what are the opportunities you're seeing for people who are looking to leave, let's say, big law, and move into legal tech? This is a very different field now than when you entered it. You can talk to me about your history that preceded Litera. But what are the options you're seeing for people who are in big law, who have experience, understand the process, that they might be able to take?

Avaneesh Marwaha: There are definitely more opportunities today than there were five, ten years ago. So we started hiring for a position called Evangelist. And this ended up being people who practiced law, or had been CIOs or directors of KM, who wanted to get back out into the marketplace and talk about our technology, and technology in general, just to go out and be a force in that space. I think more and more vendors now have this role because it just makes sense.

The other area we're seeing good opportunities for forward-thinking attorneys who want to transition to other practices is product management. Having someone who understands the science of product, product management, and helping technology companies build software with the right user focus is important. So I think product management is an area where we'd be excited to find some attorneys who are interested. Client service is always a great one. So we are now hiring partners and associates to help us drive adoption of our technology in firms. If firm X buys our transaction management tool, what can we do as partners and associates at Litera to go out and help them spin up a deal, help them run a deal, so they learn about it? So more and more, there are opportunities being created in software companies like Litera and others where lawyers can pivot. They can say, I like being a lawyer, but I like increasing the adoption of technology more. And I like to see the practice of law evolve from where it is today, and I like the speed of software development. So there are a lot of opportunities at this point. If you're motivated and have the skills, it's probably hard not to find something you like to do in software development.

Khurram Naik: So you've been growing the software company, and now it's huge, so it's kind of your niche now. But let's say, with what you know now, you were to start over again and launch a software company directed at law. Let's say you had $100,000 to work with, and that's your runway. What would you do?

Avaneesh Marwaha: Yeah. The fun thing about your question is that there are more startups in legal today founded by lawyers than there were five years ago, and a lot more than 10 years ago. So what I'd say is, if you have a problem or workflow in front of you that you just suffer through day in and day out, you should build a solution for it. It's not that hard to find a development team that will work with you to build a solution.

Good example: Haley Altman started a company called Doxly. Haley was a transactional corporate lawyer and then a partner, and had a problem dealing with the transactions she was on for her clients, and built an online platform to solve for it. Now, we acquired that technology, she came along, and now she's running corporate development for us. Another lawyer out of London created a small proofreading tool called XRef that we also acquired, because that lawyer, Travis, got tired of proofreading documents looking for the same eight things. He got a few developers to say, can you look for these eight things so I can stop looking for them, and built a company around it. So the biggest roadblock isn't ideation. I think people have ideas all the time about things they hate to do and want to fix with technology. The challenge I put out there is, do you have the guts to do it? Because capital at this point is not hard to come by, actually. Resources and finding developers to do the work is not hard to come by. The problems are being identified left and right. Ideation is there. It's, who are the lawyers who are going to have the guts to go out there and start something, because there is now an ecosystem of buyers, an ecosystem of investors, an ecosystem of companies like ours looking to buy innovative tech and bring it under our umbrella.

There is no better time than now to be a founder of a software company focused on legal. The problems we identified up front are the big ones. There's a lot of stuff that is nuanced by region, nuanced by practice group. Even within M&A, there are things that are nuanced that we currently don't look at. We don't look at corporate formalities today and how they're intertwined with each other, but there are two founders out there who have created stuff we're interested in. There are all these things people create to solve their niche issue that we're not going to look at today, but we will look at over time. There's actually no reason not to be a software startup at this point. Look at how many labs there are. You have MDR Lab. You've got Dentons with a lab. Clifford Chance has a lab. All these firms are creating labs for technology and innovation. This is the time, if there was one, to go try something and give it a shot. It just requires a little bit of guts to go do it.

Khurram Naik: What would be the characteristics of the ideal company to acquire? Let's say I wanted to build a company, and my goal is for it to be part of the Litera family. What are the characteristics of that company?

Avaneesh Marwaha: We like things that over time can become mission critical. Once people have it, without it, it's a problem. We like things that are recurring revenue, with very low to no services required to get the technology up. And I personally think it should be centered around the end user, focused on the lawyer and improving the lawyer's life a bit. Those are the basics, the high-level things. If you can do those three things, then we're always up for a conversation. Then it comes down to, is the way you solve the problem the way we would solve it, or do you take a whole different lens that doesn't match our desire? For example, we believe all drafting technology should live inside Microsoft Word. We shouldn't have a pop-up window taking you out to our ecosystem to do work. We should try to do everything inside Word, because along your own Word, the effectiveness and efficiencies are there. There are certain things like that we'd probably have hard lines on. Otherwise, high-recurring-revenue businesses, almost mission critical, with good retention rates of customers who've bought from you more than one year, are all things we're also looking at.

Khurram Naik: You're partly talking about culture as well. Some people, thinking about platforms in the tech world, would say, I think about what TechCrunch has done historically, or Hacker News, or maybe Product Hunt. These are media platforms that have been instrumental in launching different companies. Looking at legal tech today, are there media platforms or similar platforms you look at and say, hey, this is a kind of hub of innovation, and we're going to see more good companies come out of it?

Avaneesh Marwaha: Not necessarily media, but like I mentioned before, you're seeing probably 20, 25 law firms out there that have created really good innovation hubs internally, where they're incubating their own lawyers' ideas, or allowing third-party, outside lawyers to come join their incubation to help build their ideas out. We'll be announcing soon a couple of firms that we've bought technology from. They built it internally, they incubated it, a lawyer solved a problem they had internally, we think it has global appeal, so we structured a deal to acquire the tech. So you're seeing that opportunity come up more and more for us as well, to say, you guys did a good job, you built good tech, we think it's got mass appeal, would you want us to take it off your hands, and take a royalty-free license from us forever, we'll manage it, but we want to go sell it too. So I think that's where we find a lot of innovation for legal software coming out of, these hubs and incubators of law firms that have created it.

Khurram Naik: And so with the skills lawyers should be thinking about acquiring now, we talked about direct moves you can make into the different roles you described, product management, evangelist, and similar roles. Let's talk about skills. What are the skills you think lawyers who really want to expand the possibilities of their practice, and not limit themselves to just legal practice, should permit themselves? It won't be one size fits all, there will be different categories, like sales, product management, but what are the different categories of skills you think lawyers should be cultivating?

Avaneesh Marwaha: Besides teaching themselves the tools, because that's still a skill we're all learning, I would say number one is how to collaborate with your clients virtually. That's a skill that needs to be expanded upon and professionalized quickly. This was the opportunity to do it with the pandemic, to figure out how to have a long-term game plan on collaboration and how to leverage things like Microsoft Teams to be successful in keeping your clients informed, working with them, sharing ideas, and collaborating on documents together. I think the firms and attorneys who figure that out really well and adopt it as a go-forward methodology, along with email, are going to be successful. Those who rely on traditional methodologies for collaboration and still want a face-to-face for every meeting, or want to mail you documents for review, or only leverage email, I think there's a marketplace for that that will exist for a while, but it's not a long game. The long game is adopting these new ways of collaborating and working into your day-to-day operations. You can't shy away from it. It's a disservice to the marketplace to shy away from tools at work that really enhance productivity and client experience and not bring them into your fold. That's the space we're in today. And that's not meant to sell our tools. It's really meant to be a place where we just have to get better as an industry and leverage that asset in a way that makes a lot of sense.

Khurram Naik: And for my thoughts, let's say in litigation, so much depends on what judges direct, and so much of what judges direct is based on what they understand. There are any number of judges who have the answer, an understanding of e-discovery, and they're able to make pretty good calls, because they say, hey, I understand what's feasible here and what isn't, what's reasonable and what isn't. So has Litera had any thoughts about educating the judiciary on what the options are out there and how that's going to change?

Avaneesh Marwaha: You know, it's probably an inappropriate thing to say, but we haven't. And not that you've flagged it, but we probably haven't spent enough time there. We've done some. We've had some conversation with the DOJ about what's available, what people are using in technology that you don't have, so when you go into cases, just so you're aware, this firm may have X, Y, Z at their fingertips, and what are you using to keep up with that? But it hasn't been at the judgeship level. We haven't gone to the Cook County courthouse and said, hey, judges, let's get together and talk about the platforms available to you, or what people are doing to file cases in your court. That's a good flag. I think now that you've mentioned it, it's going to be something I want to think about, how we do that, because that's the full circle on litigation, thinking, should they have an understanding of what's happening in this space? I don't think they do, because you still have carbon copy happening at some courthouse right down the road, still filling out court orders on carbon copy paper. So there are things to work on there, and I think we probably have not done a good job in that space.

Khurram Naik: Yeah, last time I was at the Daley Center, I asked if it was carbon. This is a few years ago now, but yes.

Avaneesh Marwaha: Yeah, I've been going to those centers since '08 or '09, but I imagine it hasn't gone away. My knowledge is as of, I'd say, 2015. So there you go.

Khurram Naik: Yeah, I think that's a good idea. And of course, there are any number of judges who draft the discovery orders themselves, and those tend to be the judges who are the most knowledgeable and most open to this.

Avaneesh Marwaha: Right. In my recent past, we've had some conversation with the ABA and other folks around what ethical standards we should have with lawyers knowing technology. We let other people influence those things, but we do have a strong point of view, and, again, not just to promote Litera technology, but if you hide in a cave with your briefcase and never think about how technology can reduce the risk of your work, then that's a disservice. So I think more and more we'll see the ethical requirements get stringent on using technology to reduce risk and to practice law.

Khurram Naik: Now, I want to go back to your history a little more, but to do that, I actually want to go forward. So let's say a few years from now, you feel like you've achieved your goals with this company, you've grown it the way you want to, and analogous to the goals you set for yourself personally, you say, hey, I set these goals, I achieved them, I don't really want to have goals now, or, I don't really need to continue to grow this company, I've made the mark I need to make, I need to pick something else to work on. What else would you pick? What's another industry you'd pick? If you weren't working in legal tech, what would you want to be working on right now?

Avaneesh Marwaha: Education. That's probably been top of mind since my mid-20s. If we think about some of the problems we face, not just in this country but now more globally, which I would say wasn't the case in my 20s, it's just a lack of education, and a lack of inquisitive nature from folks coming out of high school. So to have a material impact on the next few generations, and have people come out with innovative ideas, I think we've got to start, well, I don't want to say we've got to start, people are starting it, but it's an area where I want to have an impact. And I think it's an area where I'll spend more of my time going forward as we transition to the next phase of our lives. It's just really keen to me to find, whether it's local community efforts or statewide or whatever, how can we increase the number of people graduating from high school? My lens is less concerned with college, and more on high school graduation rates. Because that's important, I think you can make an impact on high school graduation rates if you have influence on kids in seventh and eighth grade. So those are the areas of material impact where we can have long-term opportunities for innovation, ideation, and understanding empathy. That's always been in the back of my mind as an area I want to help and be a part of. I do not have the solutions, nor will I ever have the solutions, but I want to make sure I'm contributing to it in whatever meaningful way I can. And that's been, since we've been capable, an area of investment for us on the side for the last three or four years too.

Khurram Naik: And so when you say investments, into these companies, or what are you discussing?

Avaneesh Marwaha: It's direct. We try to directly impact the schools and make sure they have the resources, so teachers aren't thinking about how they're going to take care of supplies or all those other things. So for me, education is going to be where I put some thought and energy for the next 20, 30 years.

Khurram Naik: It seems like a lot of that is messaging, because you were talking before about the kids who are just like, hey, I want to have this kind of outcome, whatever. And they're not thinking necessarily about the work that goes into that, or how to work backwards from that. Jay-Z is a comparison for certain things, but working backwards, how did you do that?

Avaneesh Marwaha: Yeah, there's some of that. There's some storytelling around what achievement looks like and how you get there. And, B, I think there's a greater need today than ever for people to feel like they've achieved something. When you look back at growing up, what's the first thing you can remember as a strong achievement? The driver's license test. Not many folks would help with their eighth-grade graduation, right? For me it was taking the SAT, but yeah, just being in high school. High school is your first memories of achievement. So the SAT, ACT, driver's license test, and we culminate onto your diploma, right? Part of my goal is, you need to do things that are achievable, you need to achieve them, and they need to reflect on the achievement and move forward. So if we can have more people have that achievement and reflect on it, I just think there's a better chance for an outcome over time.

Khurram Naik: You know, looking back, you were talking about culture and some of the concerns you have about that. So can you, I used the wrong word with cancel culture, but, yeah, go ahead.

Avaneesh Marwaha: Yeah, that's fine.

Khurram Naik: Yeah. But tell me some more about some of the changes you're seeing in how business is being done, and tell me more about the D&I component that you're seeing as affecting your business and your clientele.

Avaneesh Marwaha: Oh, I think most leaders try their best, and we have a lot of pressure on us to not just be individuals with our own individual thoughts. We have to have the thoughts of leadership, and how we're going to impact our employees. And then you have to have a point of view that the customers want to hear from, and there's a growing sense in the population that corporations are people and that they should act and behave in a certain way. So most leaders try their best, and we try to not inject our own beliefs and feelings into the business, because that's inappropriate. But we do take stands. Most people are taking positions they feel transcend their own beliefs, because they're so big. So when we do those things, there's a percentage of people who give you flak for it, because they think you're just joining the bandwagon.

But I think we have to be given the chance as leaders to have a voice, make a statement once in a while, and not be shunned for it, because I think we're entering a world now where some of us fear having a position. And, right or wrong, it's a fear. I'm a human being, and we try to always do right by all 600 employees of ours. Sometimes we get it wrong, and when we do get it wrong, we say sorry, and we try to adjust and get better. For me, right now it's very heightened. The scale of acceptance of a potential misstep is so small, you have a very small window, and it's a very small gradient to even have a misstep, that you choose not to even take steps, because it's safer not to.

So it's a very interesting spot to be in. As a leader, I've taken this stance, I'm willing to play in that gradient and still make positions known for the brand and for myself, and take the fallout. I think they're the right things to do. I think human rights are basic things we have to be okay talking about, we have to be okay putting things up for each other anywhere in the world, we have to give all of our people globally the time and space to select who should run their business or their country for them. It shouldn't be a burden to go vote anywhere in the world, it should be a right. So we make these positions and stands, a lot of us, and there's fallout sometimes, and some people find it hard to do, and other people just keep doing it. I think right now I'm choosing to be in the gradient and try to still make those positions known that we feel are important. And then, as far as the organization and D&I and how we run the business, you do your best, and it's a very interesting space to be in, software development, because the demographic available in this space isn't always the most diverse you'd want it to be. Diversity isn't just more colors, more sexes in the same business. If you look at the biggest legal tech providers right now, the CEOs are mostly Indian. Well, not mostly, but there's a group of us. Now, is that right? Are we getting too much into that one thing? You think about these things, right? So it's a concept you want to do right, and you want to have a very diverse talent pool that brings great ideas to the table every day. I've been very lucky to build an executive team I'm proud of. It ebbs and flows in percentages, it's never what someone wants it to be, but we try our best to be as diverse as possible, because diversity brings great ideas to the table.

Khurram Naik: Yeah, because one thing you talked about, I think cancel culture is a problem if you are really highly leveraged in one game, right? If you have a lot to lose, that's who these people are. So if you're the head of a company, relative to someone who isn't the head of the company, the threat of cancel culture is more acute. So the underlying issue there is, you've made a choice to focus, going back to the goals you had, and being the CEO of a company is one way to achieve those goals, let's say financial or personal satisfaction. Have you ever had any thoughts about having a more diversified approach? We haven't talked much about your history, but you've worked on a variety of companies and industries before taking on Litera, including CPR training, very different fields. So you have a diversity of experience, and you could have said, hey, I'm going to have a small portfolio of businesses that I'm going to grow. So what made you, it sounds like there was at least a tacit choice, maybe an explicit choice, to go all in on one company? Tell me more about that decision, because I think it's interesting, because it affects other things like this cancel culture discussion.

Avaneesh Marwaha: Yeah, so for me, I wanted to put all my energy into one thing. I proved to myself that I had the chops to take a business with my thoughts, my vision, my strategy, and bring it to fruition, because in the past it had always been that I was the COO, right, other people were driving the ship, I was running the business, and I felt I had really good ideas that weren't being acted on. One of the reasons I left the practice of law was that you gave your clients good ideas and they never listened, so you get tired of that position. So I got tired of being the COO and always having ideas that never got put into place. I needed to go find an area where I could have that impact. I got very lucky with this opportunity, having two funds that gave me the ability to have a strategic idea, a vision, and a voice in the world of business, and find success in it. That's really why I'm driven here, to selfishly find success in ideas. And on the education side, I want to impact as many people every day as possible, and we have a phrase here, we want to help people focus on what matters. So if you work at Litera, if today the most important thing to you is your family, then that's what you do, you don't worry about work. If today the most important thing to you is passing your MBA test, well, that's what you do. If today the most important thing to you is closing a deal, then that's what you do. And with our customers, if you're a lawyer, what's the most important thing to do, and I'm sure technology supports that. So I really want to impact as many people as possible, and you can only do that with focus. So by focusing on one business, one idea at this time, it allows us to have the greatest impact, I think.

Khurram Naik: So tell me more about how you actually made the leap here. You said there was a lot that had to line up. How did that happen?

Avaneesh Marwaha: So I had just spent four years at a legal IT consulting firm here in Chicago, came out of that looking for an opportunity in software and productivity, because that's really where the speed of innovation was moving at a different clip from the rest of the space. I was looking at who was in the space doing interesting things, came across this fund in LA, and they were happy to look at the initial acquisition, which lined up well with my past experience of being a lawyer, and then being able to come out of that legal IT consulting to help them with this investment, and then being placed as a CEO to run it. So, a bit of luck for sure, but I think also I was willing to leave something comfortable to go try something different. I've done that three times in my career, where I've left the comfortable to go try something new, and been very lucky. I always say I've been very lucky along the way, but timing and effort, I've been there too.

Khurram Naik: And how do you help people get that nerve? You were saying before how some people just know something is worth doing, and some people don't. How do you help people get that nerve?

Avaneesh Marwaha: I think my job now, in the position I'm in, given the size and scale we've taken this business, is to tell more of my story, especially to our demographic of Indians, especially ones born in the US, to show them that success is possible with taking the leap, and sometimes not being afraid or shying away from the fear of disappointing our parents. If you put that in a box, you can probably do a lot more through life than keeping it out in the open, or disappointing your community or your friends around you. If you can put more of those things in a box, and be selfish with your own time and with yourself, I think more people will find the willingness to try something different. It's not always about being a doctor, being a lawyer, or an engineer. I think we've proven that as a generation over and over again, seeing people succeed outside those professions. So I think my responsibility now is just to try to get my story out a bit more, so people can understand that I started off as a humble attorney in Chicago, a small firm, making $40,000 a year out of law school, grinding, and just finding opportunities to take risks and bet on myself as many times as I could versus someone else. So I think that, to me, is the important piece, where you want to bet on yourself, or you want to be selfish, because if you are, then I think more people will have the guts to try something.

Khurram Naik: People say that, you know, betting on yourself, but what does that feel like, or how do you conceptualize what it means to bet on yourself?

Avaneesh Marwaha: You know, it feels like vomiting every three months because you're so nervous. It's this idea of, if you have an idea, and you've thought it through, why have ideas at all if you don't do something with it, right? If you don't believe something is a good idea, then why have any ideas at all? So you have to bet on yourself and take the risk. Betting on myself means I'm willing to not make the salary I want today, reducing that compensation for a period of time, and that's the bet I'm making. That's tactical in nature. I'm going to eat Jack's pizza for a period of my life, which actually sounds phenomenal right now, to survive, to reduce my cash burn. I'm not going to go out, and I'm going to live and scrap to make what I'm trying to do realistic. And I did that in my late 20s and early 30s. That's betting on yourself.

I don't think it requires someone investing a million dollars in you. I think it's just taking meaningful steps to find opportunities for ideation, innovation, and investment. So I used sweat equity, I used different commodities I had, to get out of the practice of law to take a risk on a CPR business that worked, and then taking a risk on an IT consulting firm that was kind of paused out and needed to find a way to grow, and solving that problem, and then taking a risk on myself, saying I think I can be the CEO of a company, convincing someone I could do it, and then being nervous as hell for a year trying to do it. And then once you find that first initial success, you're like, oh, the confidence is there, and you keep doing more and more. Every three months, this business is different, and I'm like, I've never done X, and I'm about to go do X, and I say, I can do it, and all those times I say I can do it, that's a bet on myself. And when I can't do something, it's the willingness to say, help, who has other ideas? That's something I've learned along the way, especially in the last two years. Why am I doing so much? We'd probably go faster if I had more folks saying, I can do it, on the team. That's what I've been doing the last six months, bringing people into the business who can take more of the load off me.

Khurram Naik: Is there a specific experience or transaction or event that you think taught you the most, that has been the most educating for the world you have today?

Avaneesh Marwaha: I mean, there have been so many along the way. I had a really bad investor early on, and I learned really quickly that all money is not good money. That was the early lesson: not every deal is a good deal in sales, right, you can say no to deals. Sometimes the biggest opportunity is the killing of the business, so those were lessons learned all the way. The biggest one was at the consulting firm, just how important it is to motivate and engage people in the business to work in the same direction, because as you get bigger, that's the biggest lever you have, your people, making sure they're motivated and excited about what you're doing. I spend half my time on that today.

Khurram Naik: Right now you mentioned how much the company is growing, at a really happy clip, but it sounds like the previous opportunities weren't exactly rocket ships. So tell me about the pros and cons of targeting a company that's high growth versus a company where you are doing everything you can to make it grow.

Avaneesh Marwaha: Yeah, I think there are a couple of different kinds of business styles. You can create a business and have it become a lifestyle business, right, it turns out a decent amount of cash every year with very minimal growth, and that's a great business to be in, a long-term cash company, and maybe someday you'll sell it for some value. Then you have a startup business, where you're just grinding to make the first couple of bucks so you can have dinner. And then if you want to get to the growth phase, that's a different muscle. The muscle we used at the consulting firm worked. We grew the business almost two or three times in three years, but it was still, at the end of the day, a lifestyle business for the ownership. They weren't ready to think of anything other than that. They weren't willing to double down on investments, they weren't willing to think of alternate ways of doing work to increase the growth trajectory, because the lifestyle was so good, so why change it?

So I used some of those principles I learned at the last couple of companies to say, now, if you find an ownership group that's aligned with you on growth, aligned with you on investment thesis, what could happen? And that's what private equity did for me, the direct alignment of, yeah, we want to grow, we want to engage people on the journey, and we want to impact a certain industry for a long term. I've been very lucky to have ownership along the way that's aligned on that thesis, and that's given us the chance to grow as fast as we have. Without that, if the ownership and I were different, if the ownership was like, we want this to profitability, we don't care about growth, just run this business as profitable as you can, I wouldn't stay here. It's not my mode. My mode is growth, growth, growth. It's not for just profit. We want to see growth, because growth yields opportunity for our people, growth yields opportunity for the community, growth yields opportunity for innovation, and we have to be a growing organization. And I guess we're very lucky that we've had ownership that's been aligned on that strategy for the last five years now.

Khurram Naik: Are there any advantages you have from working with things that are maybe more lifestyle businesses, that structurally had more challenges with scaling? Did those experiences teach you something that, if you'd started with Litera, you wouldn't have learned otherwise?

Avaneesh Marwaha: Yeah, it's taught me that when we do M&A, and we've bought companies along the way that have been lifestyle businesses, I now know what those founders care about. We understand why the business looks the way it does. We're less judgmental of what we acquire. We're more empathetic. We don't ask questions that don't need to exist, because they just grew a company and they're happy with it. And we think we can do something magical with that technology, so we buy it and put it into our ecosystem, and don't break them along the way. It's a different speed, and we respect that. So what it's given me is the ability to have empathy for that type of business. So when we have those relationships or acquisitions in the future, we can treat them with a completely different level of respect and understanding than we would someone else. Because if you went in with the same lens, like, why aren't you growing, why is this bad, why is that, that's not the way to do it. This is not bad. You did a great job for what you were doing. You built a business that does $10 million in revenue. You walk home with a million and a half in cash every year. And that hasn't changed in 20 years. I'm not going to knock you for that. That's amazing. Good for you. But give me the chance now to take what you've built and make it better. And so it helps with that conversation. That's what it is.

Khurram Naik: Yeah. So that empathy component is something you couldn't have had unless you'd had that previous experience. And it sounds like the previous experiences have informed how you're running Litera now. But tell me, what's the most difficult decision you've made as CEO?

Avaneesh Marwaha: So this business has grown from 16 million dollars in revenue, and we've grown to a big size today, and it's going to keep growing. And there are people who come along the journey with you, and they make a huge impact on the business and on where the company is going, and they've planted seeds that have huge value for the long term. But they don't have the skills or experience to go from 200 to 500 million. And you have to move on from that, and recognize that as well, and go find something else for them to work on. So it's really hard to stay focused on stuff like that. But along the way, you may have to change who the leaders are once in a while to do that. And those are tough conversations that I've had in the past. I don't think those are easy things people do. But we have to keep this company safe. And so those are tough times. And they eat you up inside. But we do the best we can as we grow, and make the right decisions along the way. So that's probably been the toughest one for me.

Khurram Naik: So when you're going down this path, you talked about learning from people for guidance. I know you've got your internal guideposts and the goals you've set for yourself. But what are the external sources you've chosen? Are there other books that made an impact over the years? Business leaders that made an impact over the years? What are the sort of external inputs?

Avaneesh Marwaha: Yeah, there have been a good handful. So there are other CEOs I've met along the way from different portfolio companies that are fund-owned. You're able to lean on their experiences to help you with decision-making, and that's been hugely impactful in my growth over the last five years. We follow a book called The Advantage that talks about organizational health and how you actually build clarity inside your business. We try to follow that as closely as we can, and have for the last four or five years, and it's helped us scale. I have a very active board that I can leverage for experiences, and my chair, the chairperson, is someone who's done it multiple times and seen it multiple times and can help me along the way too. Those have specifically impacted the success of the brand and how the business evolved. They've all had various levels of impact. I think each person is different. I'm not someone actively out looking for more mentors, but the people I have had have been very meaningful along the way.

Khurram Naik: And now I'm just picturing, there's probably some college kid listening right now, and I'm sure this is a big eye-opener, because certainly when I graduated college, it was hard to get access to the founders of legal tech companies, and they were former lawyers themselves. So what's a message you have for that new law graduate who's just looking to get to work?

Avaneesh Marwaha: When you come out of law school, and you're entering the workplace, you've got to be a sponge, and you've got to treat people the right way, because you never know when they're going to be part of your network later. So learn as much as you can from everybody around you, and treat people with respect and dignity. Even if you went to a top-tier school and graduated at the top, there is no one below you, everybody's equal, right? So when you enter the workforce, you've got to check the ego at the door. You've got to be part of the ecosystem. You've got to be a collaborative person. You've got to learn a lot. And you've got to have fun, right? You just finished an intensive course of work, and you're going to be doing intensive work for the next couple of years as a fresh associate. But you've got to find a chance to have that social outlet, because at some point you've got to turn it off and get really focused on what you want to do, if that's your desire.

I have plenty of college friends who never turned it off. They have a lot of fun and they work hard, but they don't have massive ambitions beyond what they're doing. So it's great, it works for them. But if you're someone who had a vision for yourself to be something great or do something meaningful, at some point you've got to turn it off, and you've got to focus on that, whatever it is, and make that priority one. And whenever that realization hits, you've got to do it and go for it. If you don't want to turn it off, then you can't complain, right? That's kind of the statement I've given to my nieces and nephews. If you want to have fun, you can't be mad that you're not doing something else. You can't be mad that you didn't get promoted. You can't be mad that you didn't get staffed on a project. So at some point you've got to turn it off, and you've got to be focused and have intent and purpose, whether that's with a charity or whatever it is. You've got to do it the best you can. So enjoy life after graduation, enjoy life as a fresh associate, but then at some point, it's time. Let's go time. And again, whether it's charity, whether it's family, whether it's work or career, it's time to get serious and make that priority one.

Khurram Naik: That's an awesome message.

Avaneesh Marwaha: It took me longer than I should have, right? I don't think I got focused until it was like 29. I started partying when I was like 25. Then I probably should have been a lawyer, because I got really focused on my career at 29, and wasn't being a lawyer before then. But if at 25, coming out of law school, I'd stopped partying when I was 26 and said, then let's go, who knows? It'd be a different path. But so, timing and everything.

Khurram Naik: Yeah, but it seems like that's exactly it. I think knowing where to apply energy makes all the difference, and it could have been for something very different. But this has, like you're saying, in terms of the impact you're having, in terms of the number of people you can effectively reach as a business, that's the goal.

Avaneesh Marwaha: Yeah, that's right. That's right.

Khurram Naik: Great story. And I really appreciate hearing it, especially in the context of talking about how folks move through time. So I definitely appreciate you taking the time to talk about this.

Avaneesh Marwaha: Yeah, it was good. It was a good chat. I look forward to listening to this back and hearing myself be an idiot. So thanks.