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A ClariLegal interview with Mike Bryant

Updated: Aug 15, 2020

We recently had the privilege of interviewing Mike Bryant, partner at the private equity firm Knox Capital. Working as an investor with legal technology/services companies at Knox Capital and having previously built and grown companies for the legal market, Mike brings a unique perspective on the drivers of value in the legal industry and business in general. Mike began his career at Eastman Kodak, joining their B2B division. At Kodak, Mike became involved in the legal and financial services markets, particularly from a systems standpoint. As Mike puts it, “at that time, corporate training was still a thing”, and Mike received education and training to become a “general manager”, getting exposure to fields such as sales, operation, finance, and human relations. Mike later transferred to Kodak’s services division where he worked with global legal markets. Mike ultimately left Kodak to join a competitor in the services space, where Mike worked to designs solutions for law firms and investment banks.

Mike became involved in M&A and global corporate development, incorporating acquisitions into his firm. Over time, Mike became involved in private equity, investing and working with lower middle-market technology enabled service companies and early-stage technology companies. Over the past several years, Mike has focused significantly on legal and compliance focused technology services companies.

We began by asking Mike what the concept of value and the value exchange means to him. Mike says that he likes to think about value and the value exchange as a joint venture. As Mike says, “joint ventures only work when both parties take the time to understand what success looks like for the other side”. Once that is finalized, Mike believes that parties need to agree up front on communication frameworks and reporting, to actually communicate with one another, and to being willing to adjust the relationship, so that their “joint venture” can measure the value exchange. Otherwise, Mike stresses, the relationship, like any other transaction, won’t work out.

We next asked Mike about how value is defined at Knox Capital, as well as in his previous firms, and how those definitions of value have aligned with the value that those firms provide to their stakeholders. Mike says that, at Knox Capital, he and his partners believe that the value the firm provides includes both their investors and their portfolio companies. Mike also says that they look to work with companies that have a truly deep understanding of the concept of value. Mike notes that the most successful business leaders tend to have a good understanding of what value their business delivers to their stakeholders; however, Mike also notes that this understanding is “just table stakes”. Instead, Mike believes that businesses that truly generate outsized growth are those that successfully communicate (in a concise, repeatable manner) about value to all constituents, not just clients or partners. Mike argues that the greater the breadth and depth of understanding of value in a business, the better its performance. Mike says that any company should be able to articulate value well at each level of the company, or as he puts it, “in 30 second, three minutes, and 30 minutes, depending on where you are in the organization – you need to have command of all three”. Mike asserts that the entry-level worker should be able to communicate the firm’s value in a 30-second elevator pitch as well as the CEO can in a 30-minute presentation.

As for Knox Capital’s investment operations, Mike starts by noting that value in private equity is often measured simply by return on capital. Mike says that for his firm, the ultimate metric is still “are we generating returns to our investors”. However, Mike says that what drives that particular value is companies that understand their own business strategy and the value that they provide to employees and clients; the companies must also be good at adjusting to better deliver value. Mike says that part of the value that Knox Capital brings to its portfolio companies is helping them with these adjustments. Mike warns that it can be easy to lose sight of client service and satisfaction when integrating newly acquired companies or services into the existing company culture.

We also asked Mike about how his firm’s clients and stakeholders define value. For the portfolio companies, Mike notes that consistently delivering on key financial metrics is critical. However, inside the companies, Mike says “what drives [value is] employee satisfaction and client satisfaction…the financial outcomes tend to track naturally”. Mike notes that if portfolio companies don’t have a “balanced attack for measuring success”, Knox Capital works to help them implement it. Mike suggests that satisfaction is driven when portfolio companies take the time to seek feedback from their clients such as “would you hire us again?” or “would you refer us to a colleague?”. As for Knox Capital’s investors, Mike says that they and the firm are aligned on being flexible on time horizons for exits and returns on investment; in contrast, Mike notes that many firms are constrained by the length of their funds and the need to exit from investments or raise new capital in more defined periods that may run counter to portfolio company preferences.

We asked Mike about how he and his firm measure value; what sorts of metrics are used to monitor the value exchange. Mike begins by stating that some of the most important value metrics that the firm uses to measure performance include financial performance, employee satisfaction, and client/customer satisfaction. Mike also argues that financial performance is especially important, since if a company is profitable, “clients know the company can invest” in development, people, and growth. But Mike says that companies should also listen to clients about where they are doing well and not doing well, as well as to cues from client about where investment should occur. Mike states that client retention derives from value creation, which is driven by developing new services and repositioning them for clients. Mike believes that firms should have highly developed client engagement plans that drive conversations between companies and customers that help organically grow the relationship. Mike asserts that clients want to be offered new services and to be reminded why they retained a company or purchased goods and services from in the first place.

We asked Mike about how Knox Capital identifies value in prospective portfolio companies. Mike begins by noting that his firm tries to stay current on developments in the business of law, working with well-respected industry leaders and joining industry groups and events to keep a finger on the pulse of the industry. Mike further notes that Knox Capital is often introduced to prospective portfolio companies when those companies reach out to Knox via its website or to Knox’s partners through LinkedIn and similar platforms, and when Knox meets companies at industry events. Mike says that he primarily values technology-driven legal and financial services companies that foster efficiencies for their clients. As for what he looks for in the leaders of portfolio companies, Mike notes that leaders should be respected in the industry and experts in their field. Mike believes that the key indicator of a successful leader is whether he or she can recruit exceptional talent; Mike argues that when a company has the right leader and the right talent, the clients will follow because the market knows which companies “get it”.

To conclude, we asked Mike for his thoughts on how well businesses and stakeholders understand value. Mike begins by noting that value is increasingly talked about in the legal industry, thanks to initiatives by organizations like EDRM, ACEDS, ACC, and CLOC. As a result, Mike finds that big law firms and corporate legal departments are starting to have meaningful conversations about value. Mike finds that the conversation doesn’t really begin to take off until the entire organization understand what value means to both the firm and to the firm’s clients. However, Mike believes that these conversations still need to turn into tangible results. As for how well value is communicated in the industry, Mike notes that more sophisticated law firms are beginning to retain professionals from the accounting, consulting, and enterprise sectors to help the firm develop better engagement with their client. Mike believes that the firms that are best at communicating about value take the time to learn their clients’ businesses, ask more questions, introduce the firm’s partners to the clients, and ultimately become expert on the clients’ businesses. Mike sums up the key drivers for his understanding of value as (1) alignment of the value chain through communication, (2) reporting and transparency, (3) use of technology as a facilitator, and (4) having talent that understands what value means for all stakeholder groups.

Disclaimer: The statements of the interviewees in the Value Article Series are opinions and observations of a personal nature and do not necessarily reflect the opinions and policies of their respective employers.


About the authors:

James Johnson is principal attorney of First Venture Legal, a Cambridge, Massachusetts-based law practice focused on corporate and transactional law for very-early-stage startups. James assists entrepreneurs and small business owners with corporate formation and structuring, contracts, commercial law, employment matters, and early-stage fundraising. His practice utilizes alternative fee structures to deliver value-based service to early-stage ventures.

In addition to practicing law, James works with ClariLegal, focusing on building out its innovative platform and spreading the word of ClariLegal’s mission to reduce cost and complexity in legal vendor selection and management for law firms and corporations.

Cash Butler is the founder of ClariLegal. A seasoned legal technology innovator, Cash has over 18 years of experience in the legal vertical market, primarily working in eDiscovery, litigation & compliance. Cash is an expert in legal vendor, pricing and project management.

ClariLegal is a preferred vendor management platform for legal services that improves business outcomes. Made for legal by legal experts. We match corporations and law firms with preferred vendors to manage the work through a fast and complete RFP and bidding process. ClariLegal’s platform allows all internal client segments to improve business outcomes across the board – predictability, time and money. Learn more

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