Ruben Miessen Co-founder and CEO at LegalFly: 8x ARR Growth in One Year

0:00Hello and welcome back to the Scaling Europe show presented by Deal. I'm Seb Johnson. Today I'm joined by Ruben of Legalfly. Legalfly is a super interesting legal AI tech company being built out of Europe. Thank you so much for joining me. Thank you very much. Very excited to be here. I'm thrilled to have you. Look, can you give us a quick intro for those who maybe don't know you and don't know Legalfly? What is it that you've built? Yeah, so Legalfly is basically becoming the legal operating system for in-house legal procurement teams. So we're automating, executing any legal task that is relevant for an in-house team, especially anything that is very transactional or that is very much focused around or relabel as commodity, legal work.

0:41And why in-house? Why in-house? It's a very good question to start with. first of all we very strongly believe in the potential of building a specialized generative AI solution for in-house teams to empower them and to allow them to execute a much higher volume of those legal tasks themselves and reduce their reliance on costly external accounts it just makes so much more sense to build for the corporate segment than for law firms from our perspective And is that because you think the market's a lot bigger? You know, what's the rationale there, I guess? The market is of a similar size, I would say, to be honest.

1:22But we're seeing a macro shift in the space where legal budgets are being decreased at enterprise and corporate organizations. And there is a much bigger push also on a board level for those in-house teams to become more efficient with AI tools themselves. And as a result of that, the legal services budget is actually moving quite significantly to adopting legal tech to boost the operational excellence of the organization itself. Oh, that's super interesting. Yes. And then you are very well positioned to kind of make the most of that transfer of budgets from services to technology, which I guess is kind of the trend that we're seeing across all of technology at the moment, right?

2:02Is this transition from services to technology, especially like agentic and AI stuff? Does this, is this like a very clear distinguishing point that kind of separates you from the Harveys and the Lagoras of the world? Are they, you know, they seem to be more targeting law firms themselves. Do you see that as a big differentiator that you are not targeting the law firms, you are very much going to the in-house? I would definitely say it's one of our differentiators, definitely. Both Harvey and Lagora have been initially built to serve advisory firms, law firms, ASLPs. and then have broadened their focus into the corporate segment as well and now they're serving both and then they've built solutions like a portal for example where they're bringing a law firm as well as with a client together and they can jointly get legal work done within at their ai platforms to be honest from our perspective it takes a different product to serve the needs and the workflows of a law firm versus an in-house legal team when you want to built a generic solution for the noise legal team it's all about actually executing commodity legal work and executing it at scale and that's exactly what we've done with legal fly and that also means that if you look at the solution from a product perspective legal fly is not just a solution to advice legal work or solution to ask queries and get a legal answer back or just extract information we've basically built an ai native workspace with more than a dozen of different agents and for any legal task that we know a corporate is doing on a daily basis there is an agent in place that can help you to execute that task so it's it's very complete end-to-end solution super interesting and so this is i think it's a really interesting model and i guess you're going to end up i guess you're trying to take up all the money that the big magic law firms are charging at the moment right that's kind of the budget that you're going after are you seeing when you're speaking to customers that you're speaking to the clients that you've already got are you seeing that trend already are you seeing that now the people that you're working with are having to become less reliant on their big law firms yeah but 100 just to clarify we're not after all of the money that is going towards those law firms because let's be honest gen ai solution will not fully replace the needs of external counsel but especially with all of the repetitive legal work there we can make the difference and it's it's a significant chunk like more than 80 of all the legal work that those corporates are processing is commodity legal work so that's exactly our sweet spot and that's exactly what we're seeing with our existing clients as well so we're working for amazing clients like bosch lufthansa group european commission and we're seeing the same trend across all of these accounts and how do you think this is going to change the wider legal sector you know does that model work of you know like a sort of a very wide pyramid structure where you have a lot of junior people doing i guess a lot of that grunt repetitive work and they learn and they train and they kind of go up the crib after ladders and it's all billable hours.

5:05You know, is that model still fit for purpose in the age of AI? I think the legal landscape is undergoing a lot of changes. And one of these changes, I think as well, is that the way how the law firms today are set up will probably change over time. We're already seeing a lot of those law firms that are actually hiring freezes, especially across the junior positions. While they needed literally like an army of junior associates in the early days, now with AI it's not needed because especially to do the pre-assessment of legal work or do the preparation for legal work, AI agents can execute most of the job.

5:46So it's definitely, the change in landscape will definitely have an impact on the wider industry and also how these law firms are set up. Yeah, it's really interesting. And how have things been going? I think you raised a big round in 2024. How have things gone since then? How have you, I think, was it 12 million that you raised? How has that capital been spent? Kind of what's gone on since then? Yeah, it's even a little bit more like 15 million euros we raised indeed in July 2024. And we're now preparing ourselves to initiate the B round later this year as well. Ever since the Series A round, it's been an amazing ride.

6:25I would say like if I just look back at last year, we grew nearly eight times. It was only just from our AR perspective alone. So it's, yeah, I couldn't be happier, couldn't be more proud of the achievements of the team. And what I particularly like is that we wanted to move more upper market to our center price. Actually today, more than 40 % of our client base is enterprise. So it's also something that I'm particularly happy with. And what about your targets for 2026 then? You grew 8x AOR last year. Do you think you can maintain that level of growth or is it probably going to... I would expect it to decrease a little bit, obviously, as revenue grows.

7:05What are you targeting? Is it 2x, 3x, 5x, 8x, or is it even bigger? I can share exact numbers, especially not with the B-Round that is around the corner. But to be honest, we are expecting quite an aggressive growth trajectory to just continue. Also, because we're just getting started to really crack into the enterprise market. We've booked some amazing successes with the European Commission, with SAP, with PIF in the Middle East. And at the same time, we're attacking multiple territories at once. So we're very active in continental Europe, in the UK, in the Middle East. And we're now also preparing for a proper US market entry.

7:43So again, like I see no reasons why our growth would slow down. Super interesting. When you're looking at partners for your Series B, are you looking maybe for US firms to help with that US expansion? Definitely. So in terms of the B rounds, again, like it's, we're not running a process right now, but when we go out to race later in the year, most likely we'll optimize to partner with an amazing US VC that can definitely help us to expand properly into the US market. We already have a significant amount of inbound clients, like on a daily basis from the US that we're serving. So it will be great when we make it our priority.

8:25And where have you seen the most growth come from? You said you're kind of in Europe and the Middle East. Have you seen a difference in, a geographical difference in the type of companies that are reaching out? Are there certain parts of Europe or the Middle East that are more forthcoming, actively seeking out AI solutions or is it sort of an even spread? Yeah, it's a good question. So we're a Belgian, Ligle High Scale, headquartered in the city of Ghent. so the Benelux is our home territory but we're seeing a big push from the Dach region actually where we're now doubling down UK is a little bit tougher, it's very very competitive so it took us a longer time to get a strong foothold into the UK market but I'm very happy with how everything is evolving right now and then the Middle East is actually one of our latest bets so we've signed some amazing clients like PIF like Basics as well.

9:18So the release is definitely, definitely paying off, especially because one of our main USPs, which makes legal fly very unique is our approach to data security as well. So we're literally the only legal provider globally that has decided to, if you want to unleash the power of AI agents on your legal documents, let's make sure that all the sensitive data is removed. So we anonymize every single legal document, every single prompt to make sure that all of the sensitive data is anonymized and that it's safe and that it's not ending up with the LLMs itself. And, you know, in the Middle East where data security is one of their main concerns, yeah, there is an amazing interest for a solution like LegalFile.

10:02And does that resonate strongly with your prospects and your clients when you talk about your data security? Is that something that they say, amazing, that's great, we love it? Is it Is it a top-of-mind priority, I guess? It definitely is top-of-mind priority for the clients we are engaging with. So we're very active mostly on financial services and insurance. So clients in banking, clients in insurance firms, they love it. It's actually prerequisite for them before they can start utilizing AI for their confidential documents. so yeah and definitely the higher you're moving up in the market upper mid-market and enterprise also there um it's it's key and one of the i think it's super interesting that you're building from ghent you know ghent is is a strange thriving tech ecosystem i think it has like a population of 200 000 people but it's got a really it's a rather small town yeah i mean it's a small town but it really punches above its weight in terms of tech companies.

11:01Why is that? Andreas Bieler - There is an amazing startup ecosystem. So you had some amazing founders who have launched companies like Netlog in the past, and then they exited Netlog to Match Group. And they're paying it forward. So then they're reinvesting the money they made into the next generation of entrepreneurs and build a very active ecosystem around it. You have the Winter Circus in Ghent as well, which is a collective of startups where you can invest in. But they're also, they get housing, their keynotes, their sessions. And there is a very, very collaborative spirit in Ghent. I mean, it's amazing.

11:42And it feels like the flywheel just continues to spin. And yeah, it's such a, you know, across Europe generally, it's the big cities, the big hubs. You know, like in Sweden, it's Stockholm. In the UK, it's London. In France, it's Paris. i mean belgium is like ghent small town children and people but with this insane amount of talent and these amazing amazing startups like aikido security is one of the first unicorns of 2026 here in europe again against startup i've interviewed a bunch of founders from there i don't know it just seems so interesting yeah they've just the the the town has managed to capitalize on those few success stories and turn it into a thriving ecosystem yeah and to be honest it's especially quite recently because notion capital um one of the cities that led our series a rounds i think now they already made four investments in ghent which for notion capital in such a small you know city is quite unique so there is definitely something uh we often joke with with the partners of notion that there must be something in the water in ghent that fuels and it feels like and good for them i guess we're kind of uh getting ahead of it right and realizing how great an ecosystem it is.

12:55And so when you look for, when you look to the future of 2026, it sounds like you're going to have a busy year. You're going to be fundraising. You're going to be expanding into the US. What else are you going to be spending your time on? Is it, you know, do you need to feel like, do you feel like you need to be further investing to the product into R &D? Do you feel like your product is quite stable and actually it's more about distribution? Is it going to be about hiring an A-class team to help you expand? Or is your time going to be solely focused on fundraising? What does that look like for you?

13:21Yeah, there are plenty of things. So first of all, I'm very happy with where our product is today. I think definitely we're leading the package on a global level within Legal.AI. Now there is one important product innovation that we're right now working on and that is we really want to make sure that Legalfly becomes platform agnostic. And what do I mean with that? Legalfly is available for our clients on the web-based platform. We have a native Microsoft Word add-in, there's a strategic partnership with Microsoft as well. But then we also want to make sure that you can actually engage with all of LegalFly's agents through Slack, through Teams, or even through an intake system through email, which is now in a beta release with some of our key accounts.

14:04So basically you can just send any requests to LegalFly over email, whether it is to review a contract, whether it's to run a compliance check, whether it's to run due diligence on a data room or a specific SharePoint environment, or you just have a legal question, you just send the email to legal fly in a couple of seconds later legal flight gives you the advice or even a redline document attached to it and that is the next level of automation and work orchestration that are actually looking for where you can just ask legal fly any question there is an intelligence layer with an orchestration layer that will figure out the intent of the user and then forward it to involve the right agents and then a very specific workflow is being kicked off as well which again it's not just advising your legal work it's actually helping you get the work done in a couple of seconds often without losing just to clarify without losing the human in the loop process which for legal is quite important so approval workflows um etc are baked in the workflow super easy yeah and that's gonna be game changing it's really interesting yeah i'm very excited about that front um from a go-to-market perspective as i mentioned we're scaling up the go-to-market teams uh doubling down on the dark region doubling down on the at least and then prepping to do a proper US market expansion as well.

15:21And then running the B round will be almost like a hobby project besides it, I would say, between scaling the go-to-market team and building the next generation of the product. Will the US expansion see you relocating out there? It will definitely open an office, most likely in New York. some preparations of that are already on the way. The decision needs to be made how we change the company structure. But I think, to be honest, our headquarters will always remain in Gantt. I don't think we'll change that anytime soon. Amazing. And things are going well. You're A-Texing, A-R-R, you're on track to raise a Series B this year.

16:05You're signing some amazing enterprise clients. When things are not going well, when clients are saying no, maybe they are actually let me just ask when clients do say no what are the reasons that they're giving? That's a good question it's a really good one

16:26in most cases they're looking for a point solution which we're not we're awful package we're an end-to-end solution so you get access to the AI native work space as I mentioned there are more than a dozen of different but also comes at a slightly more premium price. If you're looking for a point solution where there is a very specific use case and you're only interested in getting exactly that use case checked, there are probably cheaper solutions out there in the space. And especially also if data security is not that of an importance for you as an organization, So then I'm talking about more long tail or SMBs, which again, if it's not of your interest, it doesn't justify the premium price you would pay for it.

17:17So to be honest, I think if data security is not a priority for your organization, and if you're looking for a point solution, then League of Fly will most likely not be the best fit. And that's what we have seen as well. And so those companies who are looking for a point solution, is that just because they're looking for, it seems strange to me, are they looking to have lots of different point solutions, solving different use cases, or are they just kind of only hoping to sort of dip their toe into AI and solve a very small use case? yeah so either it's because they want to did their toe into ai for a very specific use case or they have a very specific pain that they want to get solved and a good example is sometimes clients are just looking for a word add-in that basically functions as a class library for a contract drafting process it's very very specific and it's the only thing that they're looking for then there are better tools in the market that specifically do that at a better price as well.

18:11So it really depends. What we do see in the space is when clients are looking for a collection of point solutions, then it doesn't make sense to pick a point solution, but then they rather make the investment in an end-to-end solution. First of all, it will become more affordable because as soon as you need to sign with multiple licenses, then definitely legal flight is a better option. But again, from a data security perspective, you only want one processor for your legal data and then you want the one that deals with it in the most secure way. And then thirdly, those of change management, if you need to train your team on how to use multiple point solutions, you will take it.

18:48Yeah, it's going to be painful. Well, Ruben, we're all out of time. Thank you so much for joining me. It's going to be a big year for you and the team. I'm super excited to see how you get on, and no doubt there'll be a Series B announcement at some time. So look, keep me abreast of anything that's changing, any news. I would love to hear more about it and get you back on when the time is right. It sounds like it's going to be another big year for you, so I'm looking forward to seeing it. Amazing. I enjoyed it. Thank you very much. Bye.