Startups Magazine: The Cereal Entrepreneur

Episode 13: Andrew Thornton, Sparqa Legal

Episode Summary

The Cereal Entrepreneur

Episode Notes

Sparqa Legal is an online legal platform providing expert guidance & auto-generated documents for businesses. Anna Flockett & Andrew Thornton, founder of Sparqa legal, discuss how they have adapted their business to support SMEs at this time, including offering free legal documents & support for the big questions they might have around the changes from COVID-19.

They have also introduced Sparka Post, which provides daily updates to SMEs regarding the legal questions SMEs will have around this time.

Episode Transcription

Anna Flockett0:01 

Cereal Entrepreneur.

 

Hello and welcome to the serial entrepreneur podcast brought to you by startups magazine. You are listening today to me Anna Flockett. And I'm joined by Andrew Thornton, founder of sparqa legal. spark legal is a DIY platform for small businesses to help them meet their legal needs without a lawyer. They have just launched the sparqa post a free online legal platform for small businesses to guide them through their legal challenges during this pandemic, Andrew, first of all, thank you so much for joining me today. It's great to have you on how are you? 

 

Speaker 10:33 

Yeah, I'm good. Thanks. Yeah, nice to meet you.

 

Anna Flockett0:35 

Oh, brilliant. I thought maybe we could start the listeners by you just telling me a little bit about spark illegal what you guys do and a little bit about yourself. 

 

Speaker 10:43 

Okay, so sparqa illegal was launched, following on from another business in the legal sector that we have. That's called from counsel and provides a knowledge service to the leading law firms in the UK. So we have approximately 75 percent of the leading 100 law firms subscribe our service which essentially consists of a question and answer knowledge data set together with precedent documents and the daily new service. And when we launched that, we began to think a little bit about how a similar service might work for SMEs. So my day to day job is I'm a QC practising still practice at the bar doing corporate law. But I've also sat on the boards of a number of startups including swiftkey, which the old predictive keyboard company that Microsoft purchased about four years ago, and sitting on boards of small startups as they as they grow, we realise that those sorts of companies are really badly served by sort of in relation to their legal needs. And that's not necessarily a criticism of lawyers and law firms. It's simply that accessing the law is quite an expensive exercise and there's a lot of duplication between the needs of startup. And we felt that providing a digital platform that provided guidance to SMEs around the essential legal rights and obligations they have and enabling them to make decisions armed with the right information and producing documents as and when they required them would either provide them with a more cost efficient way of accessing the law or just give them access to the law, because we're aiming not so much at here's an alternative to a law firm. We're saying, for those of you that simply won't access the law at the moment won't go and talk to a law firm because you put off by the cost or the complexity, here's an alternative and so we Sparkqa which came from that sort of background and we have about 13 areas covered. And the idea was to say, Well, what are the key issues from a legal standpoint that face an SME from birth to death, so from being incorporated through to an exit, so we cover employment law, company law, health and safety, raising capital, protecting your IP, all that sort of stuff. So it's very much aimed at providing access to relevant law so that companies can not get distracted by legal issues as they build their businesses, too many companies get distracted by legal issues and spend too much money on dealing with them. And we sort of say, rather than have these issues, if you use our guidance and our documents, hopefully we can avoid issues as they go along. So that if you are in the fortunate position of undertaking due diligence, for example, on a sale or a VC investment, you don't have somebody coming along and saying, Oh, well, your employment contracts are deficient or you haven't properly protected your IP or you've got some risk here, which will ultimately impact upon whether you can do a deal and if you can deal with those. The terms of that deal are definitely. And for startups, especially people that have obviously never dealt with the law or the legal side of stuff before. I can imagine you have no idea where to start. I would have no idea where to start. So do you guys kind of cover all

 

Anna Flockett4:00 

The legal aspects and everything that you need when starting like a small company or a start up.

 

Speaker 14:04 

Yeah, we try to. So we when we first thought of this country, we thought, well, this should be relatively straightforward because we've built a business that provides legal knowledge in a question and answer format to lawyers, we ought to be able to adapt our content quite easily to provide a solution for SMEs. And then when we started to do that, it became more difficult than we thought, because a completely different audience in the sense that from counsel is talking to a lawyer with a view to that lawyer then advising subsequent client clients. So it's a sort of three stay or two stage process involving three parties. Whereas with sparker, we're talking directly to somebody who, as you say, may not have any knowledge of what they're trying to do. So we find the question and answer style we've adopted very helpful because we can, we can actually, instead of saying here all the legal principles relevant to a commercial lease, we can actually split it into the questions that customers are actually asked. So we very much try to build it up from foundations. So we start with variables questions and then gradually build in more detail as we go. But the idea is that we try to give SME owners and managers information in a style that they will be able to understand so that they can make decisions that best protect their position.

 

Anna Flockett5:16 

Amazing. And Have you always been working within the law and the legal sector.

 

Speaker 15:22 

I qualified as a barrister back in the 90s and the practice since then, and I've launched a few businesses in the legal sector. So the team behind from counsel and sparqa were involved with launching a legal training business in 2007 2008, called CPD cast. We provided training to the barristers and solicitors through podcasts, and we sold that to inform appear for informer PLC, the events company, I think in 2010. So yeah, I've always had a lot since about the mid 2000s. I've been involved with various legal businesses. I've been fortunate to be involved with non legal businesses as a director of An angel investor that have sort of given me some experience of the sort of the tech world which is namely say well actually if I apply some of these principles to the legal sector, we end up with quite an interesting proposition and of course, that the legal sector like many sectors has moved away from print to online and we felt that simply taking a textbook that worked as a print product and putting it onto a screen wasn't the right solution hence why we we came up with this idea of question and that process of using Question and Answer derived from the podcasting business so we used to do as we are today do an interview with a leading lawyer on a particular issue recorded and people would download it listen and recorder point for their their ongoing training. And then we started getting the podcasts transcribed and suddenly saw that really q&a style and was a really neat way of learning. And so we thought this would be really good. If we were thinking about doing a sort of a knowledge service and two, three After we sold, CPD cast, we started to work on from counsel and tuck the, the q&a star through and it just enables you to convey information in a much clearer and precise fashion than you can with writing it in writing chapters. Long chapters just don't work on screen, even for lawyers. But certainly when you start talking about trying conveying complex information to a lay person, it's just not appropriate. And so q&a works really nicely.

 

Anna Flockett7:25 

Yeah, definitely.

 

So talking about the whole light textbook style doesn't really work and like taking it online, what technology Do you use within sparqa? And And could you talk me through the process of how it works? Like if I was a customer coming to you, how would it work for me, 

 

Speaker 17:40 

so we built our own platform. So it's it's essentially the same platform for from counsel and sparqa, that they look completely different. The front ends are different, but the underlying technology is exactly the same. We built it on in Scala, which kind of sort of flexible platform and so if you if you come onto the onto the platform, it depends on whether you've come from a part... partner or not. So if you come via from Starling or revolute, or Vodafone, you generally will come straight through the signup process, you'll come straight into your account and there you can start looking at our question and answer knowledge banks if you're coming in to ask a question about furloughing, for example, and we have detailed guidance on what what that means what you have to do as an SME to furlough, people, and so forth. And you can also move into our Preston documents. So if you need to send out a furlough letter, you can move into our document automation process and produce your document through that if you want to, you know, you can work through by topic, or you can just do a simple search to find the content that you want. And if you're coming into the site afresh, then you you can access the q&a by simply registering for a sort of freemium model. So the question and answers are free as long as you subscribe as long as you register, and then we sell the pressing documents either on an individual basis or on a pack basis toolkit. basis, or annual subscription, the annual subscription works out at 25 pounds per month. But essentially, we want you through the sort of the firewall, essentially you, you can search the q&a content or the precedent documents. And then we send out regular updates by email, so newsworthy events, things that have changed that we think that SME should be aware of. We call that our current awareness service.

 

Anna Flockett9:22 

I can imagine that it's something especially rely on the legal side of things that you can face a few hiccups along the way, has there been many challenges since founding sparker?

 

Speaker 19:33 

So we always felt that we could build a good product where we thought that our challenge would be would be with distribution. So distinguishing between from carrots and spark with from counsel because we're practising in the area of law, we were launching the product, we sort of knew the customers, we could go and talk to the partners in the law firms and say, Look, we've built this what do you think? Would you like to subscribe? So it's pretty straightforward. Of course, when we turn to spark which is aimed at SMEs, there's an immediate challenge of how do we get SMEs to become aware of the product and to try it out. So the approach we adopted was to go via partnerships initially. So instead of spending millions of pounds on PPC and so forth, we said, well, which companies already have relationships with SMEs? So obviously, most people have accounting packages, banks, and so forth. So we started talking to those guys first. And I think we were fortunate in the sense that because of our background of having launched from counsel and it being used by the leading law firms, it enabled us to perhaps get through doors that we wouldn't have been able to do without having had that background. So we distribute through and at the moment are our three key partners are Starling revolute and Vodafone those are the three major distribution arrangements we have

 

Anna Flockett10:52 

Oh wow, and they're quite obviously big name partners to have that on board. When did you found spark or how long has it been going?

 

Speaker 110:59 

So you We sort of started talking. So the commercial launch was sort of late last year. So when we started, we started talking to partners in late 2019. But we'd been working on the product for about two and a half years before then. So writing the content and getting the platform into the right shape, and so forth. And we ran a quite a long trial with about 6000 SMEs through about six months of last year, just getting feedback on the content and so forth. So yeah, about two and a half, two, not two, not three is building it six month trial, and then we launched a commercially at the back end of last year.

 

Anna Flockett11:37 

That's incredible. And obviously I know you said that it kind of came from previous business and you've been involved in a few but how many are on your team now in sparker, and we're most of them working with you previously on the other projects.

 

Speaker 111:49 

So we have a team of about 12 people writing so that they haven't didn't come from from Council. A couple of them actually were involved with CPD cast the podcast company. So two of the key people worked together before, we attracted sort of lawyers who were sort of between five and 15 years qualified, who wanted to do something a little bit different and still wanted to be involved in the law. But we're interested in being involved with a startup as well. So we attracted we've got about 12 people writing, and then we have a tech team of about 13. Now, they, they essentially provide the platform for Sparqa, but they also provide the platform for from counsel, so they move between the two businesses, and then we have, you know, a small commercial team and and the usual so so in terms of strictly speaking in within sparker itself, probably 16 people, but then there's, as I say, the tech team will often be working on the Sparqa market platform, then another 12 there. So the broadly the the from counsel and spark group employs about 60 people in total.

 

Anna Flockett12:51 

Oh, wow. It's amazing. And what kind of challenges and how have you hidden the team found the whole current climate and the big chain With the corona pandemic,

 

Speaker 113:02 

So probably two things, the content and commercials are separate. So we found that, as you'd imagine the the demand for content has changed in the sense that things that people would be thinking about absent COVID-19 they're probably not thinking about at the moment. And so we've, we've generated a lot of content relating to things like furloughing, and businesses that are maybe pivoting more to selling online, whereas perhaps before they'd sold physically, so we've developed Preston documents for furloughing, and for people moving online and selling online. And we've made those available free. So rather than make those part of the subscription, we decided to make this free and that's partly because we've sort of whether rightly or wrongly taken the view that this isn't a great time to be asking people to subscribe for a new service. So we've concentrated much more on providing people with useful free products that hopefully they will use and then when we've all emerged from this and are in a better place, they may be sufficiently loyal to us to want to subscribe and so that's that's both reflected the content on the site, the what we offer free on the site, but also the relationships and what we've offered via Vodafone and and revolute, in particular that they're offering sort of free access for a period of time to the service. So really, it's a question of a saying that we're going to have to assume that our sales will be sluggish in the COVID-19 period, but we can provide a lot of useful information and show just how valuable a service like this can be through through the period.

 

Anna Flockett14:44 

Definitely. And obviously, it's amazing how you said that you've done it for free. Is that part of your sparqa post?

 

Speaker 114:50 

No. So sparqa post is slightly slightly different. So sparqa or post is essentially an attempt for us to get more regular updates. So we weren't doing a daily current one No new service prior to COVID-19, but we thought will look the same as changing on such a regular basis that there is a good reason to provide a daily service. So we established sparqa post, which is essentially looks when you go to looks a bit like a newspaper, it gives sort of daily news stories that we think are relevant to SMEs in during the COVID-19 period. So following the ganders dates on following the government financing schemes, and all the other things that we think will affect SMEs in relation to COVID-19. So it's really an acceleration and of our new service,

 

Anna Flockett15:34 

Of course amazing. And I mean, I imagine it positively but how has both the sparkle post and all the kind of free content and help that you've been given been received by people?

 

Speaker 115:45 

Well, pretty well. So usages, I mean, across both sparker and from council usage has gone up significantly. As you can imagine people are working from home and needing to find information perhaps more urgently than they were before. So we found usage has gone up furloughing stuff in particular has been heavily used. And we've had some really nice feedback from people we just tried to make it a little bit easier is pretty horrible as a business to have to furlough people but hopefully giving them you know, assistance in when they've made the decision to do so how they go about it, making sure they generate the right documents give the right notice to employees so that they get A: they get it right. And so their employees understand, you know, what their rights are?

 

Anna Flockett16:22 

Yes, of course, and how, as a company, have you guys had to adapt? Have you been remote working and have people been isolated? And have you found that big change?

 

Speaker 116:33 

Yeah, so we moved everybody to remote working about a week before the government enforced it. It's not actually too bad for us because we're we're generally got people who are writing content, and so many of our employees work part of the week from home in any event, so remote workings not been an enormous issue for us. We have regular sort of all team meetings, but a remote workings been pretty straightforward. You know, we have had to sort of re calculate You know, revenue expectations for the year, we've really regarded the next three to six months as a as an opportunity to build awareness of the service and get more people using it rather than concentrating too much on generating lots of revenue. And we think it's, as I said, the wrong time to be asking small business to start writing new checks. So in terms of day to day disruption, it's not been too bad. But of course, we've had to with recalculating our revenue expectations and budgeting that creates its own pressures. And of course, like many SMEs, we don't obviously qualify for many of the government schemes that have been been launched. So that's not ideal. But we've got a very supportive shareholder base, we're able to finance our way through the crisis. But, you know, we're aware that that's not necessarily the case for all of our customers. And so hopefully giving them something that they don't have to fork out for at this stage is helpful.

 

Anna Flockett17:56 

Yeah, of course, and what other changes are you You're going through right now in the corona kind of landscape, you know, with your barrister job and another day, so life has been a big change for you.

 

Speaker 118:08 

So that bars been, I mean, the legal profession, gender has been quite heavily hit. But the bar in particular, because most barristers make their money by appearing in court and quite a lot of courts have closed down completely the stuff I do, some of the hearings have been done remotely. And so, you know, I did a hearing this morning where the judge was in Derbyshire, and I'm based in central London. So that was done on Skype. And the courts got very used to that and has adapted very, very quickly. I suspect, one of the effects of pandemic is going to be that core process will accelerate in terms of its development, we become much more tech savvy and develop much quicker than it otherwise would have done. So, generally speaking, changes to the core process are done through consultations and trials and all that sort of stuff. But with the pandemic, we've just had to sort of get on and try things out. And it's all work pretty well. today. I mean, it's Remote hearings are can work very well, for short hearings much more difficult. If you think about a trial with witnesses and so forth, that doesn't really doesn't work. But yeah, the general legal profession has been badly hit with the bar in I think, in particular sectors. 

 

Anna Flockett19:13 

Yeah, of course. And would you say that there's a sense of like worry throughout the industry? I mean, I wouldn't. I didn't really think about the whole legal industry. When you think about the the sectors that would be most affected by a lady says it's probably taken its toll on you guys.

 

Speaker 119:28 

Well, yeah, I mean, barristers are self employed so that you know, they're not on salary. So they're not appearing in court and not doing what they're not earning. So but but still incurring expenses so that the barrister model works on the basis generally that, you know, you keep your own income, but you pay Chamber's expenses, so for rent and employees and so forth the court as a proportion of our income. So people are expenses are still going on, and still carrying on but they're not earning anything. So probably the best way to look at this it's something that none of us ever envisage would encounter during our practice. So people always worry about what Well, I might become ill, or I might take time off to spend with my family or we might take a sabbatical, that sort of thing. But nobody ever really thought there'd be an interruption to their practices like this. So I think it's probably come out of the blue for all of us, really. And it will make people a bit a little bit more sort of conservative about how they conduct their, you know, their financial practices going forward. Because, you know, this could come back I guess, it's sort of thing could come back so it's Yeah, I think it's been a bit of a bit of a shock.

 

Anna Flockett20:29 

of course. And as far as the legal What do you guys have planned for the future? both kind of for the rest of lockdown, but also after? Did Did you guys have like a kind of five year or 10 year plan and did Corona common effect that massively?

 

Speaker 120:44 

So yeah, we so we do have sort of a long term plan. I mean, Corona will probably delay a thing. So we were going to very much build out our content and also some of the technical features of the platform so that more account features so that people come And registering and putting in their, the details of their company would automatically generate a library of documents they can use rather than doing a one to one basis that involves some technical build out. So we'll probably we will still do all of those things, but delay them slightly. So, and again, in terms of marketing, will we sort of currently at the stage where we would otherwise have been moving alongside building out the partnership, relationships to do more direct marketing to to SMEs will probably wait until much later in the year to do that for you know, because as I said, This isn't the time to be asking SMEs to spend to spend money. So I think from our point of view, it's a delay on our plans rather than a change to our plans. The business that we've built, the model we built won't change. As I said, we've built up more content and made more content free, but I suspect we just were just really delaying our plans rather than changing them materially.

 

Anna Flockett21:55 

Definitely. And that's a good way to look at it. Everything will carry on and and it One day, but we just don't know when that day is Yet. Finally, to finish this off, do you have any advice for startups right now that might be worrying or unsure of times ahead of them? Not necessarily. It can be from obviously a legal point of view, but also, you know, from a business owner to a business owner?

 

Speaker 122:16 

Well, I think what we're doing is alongside carrying on running the business, we're taking this as an opportunity to sort of focus and think about how we might do things differently or better moving forward. I mean, the difficulty is, we don't really know how long this gonna last what the outcome is going to be, how it will affect different businesses, but it is to use the time to sort of refocus and think about how we might do things differently, you know, should we be focusing on different sectors and so forth? So I think it's a bit of thinking time. I mean, I think it's very difficult to give general guidance because of course, every company's requirements are different. Every company's prospects are different. Some sectors are being affected more than others, some Can, can finance through others can't. I think Probably for all of us using it as a time to reflect on where we are. And what we might want to do going forward is probably is what we're doing. We're very much thinking about how the the business could evolve over the next few years. And sometimes you don't get the time to do that when you're sort of head down, building the business out. So think certainly what I would say is people should, you know, absolutely look at the government schemes and how they can help. I mean, certainly, other businesses I'm involved with have taken full advantage of the government schemes there have been lifesavers, that's a billion we own also chain of nail bars, for example. And, but for the government scheme, there's no way those businesses would have survived. So, you know, look at the government schemes and see if they can help.

 

Anna Flockett23:41 

Definitely, it's about using this time wisely, isn't it? Because, I mean, hopefully, we're gonna get this time again.

 

Speaker 123:48 

It's a terrible time but you know, it does give potentially give us time to think you know, to, as you say, to think about things and to use that time wisely, but you know, look at what the opportunity it creates in terms of available time.

 

Anna Flockett23:59 

Definitely. Well, Andrew, thank you so much. That was really insightful and really great to learn more about Sparqa legal and I'm excited to see what else you guys do after locked down and continue to follow your journey.

 

Speaker 124:11 

Yeah lovely, nice to speak to you Anna.

 

Anna Flockett24:15 

Cereal entrepreneur.