Episode 15 - Danae Shell

[00:00] today’s guest of your Law Firm success podcast is Danae Shell of Valla I don’t know how many of you have heard of Valla but it’s a really interesting disruptive consumer focused employment law offering using elements of generative AI technology and a desire to provide everyone with access to Justice and help when they need it most I’ve been watching Valla’s progress from a distance from a short period now I’ve become a bit more involved recently as a result of the crowdfunding exercise and I think you’re going to find this episode within a really interesting danae and Valla have been real innovators and disruptors within the employment law space I think that would be fair to say we’re working on it yeah although you’re probably still I would say relatively unknown within the actual legal sector itself certainly when I’ve mentioned your name to a few actual lawyers they’ been like what’s that yeah that’s not a surprise actually we’ve been focused a lot on talking to Consumers directly and so are just now building up those relationships with the law firms that can help them too and  can you tell me a bit about what about yourself and Valla please sure so bit about my background so I’m American  from Tennessee I got rid of the accent  and then I moved over here to do my Master’s fell in love with Edinburgh decided to stay and basically I’ve worked in the startup scene in Scotland my whole career I was a software engineer and then somehow fell into marketing via like a Web Master role and worked at free agent which is  for people who don’t know it’s online accounting software for micro businesses so learned a lot about a really similar profession with accountancy watched the digitisation of that happen  at the very beginning free agent and accountants didn’t get on and then later they did so I learned a lot about what it means to you know support an industry rather than go directly against them and then worked a few more jobs as like managing director Chief marketing officer but got really interested in the law because as you get more senior as a woman in technology you become more rare it’s generally quite a male-dominated field and you also tend to get more people coming to you looking for support or advocacy when something goes wrong at work and I just kept seeing these stories over and over of like bad things happened to people and the story always ended with so then they just left because they couldn’t do anything about it and being American I was like but they have rights why can’t they use their rights and so basically discovered like the access to Justice Gap the problem that a lot of people have being able to do anything about an issue if their salary doesn’t warrant enough to actually pay the legal fees and thought goodness there’s something really similar here from what I did with accountancy so that was like the origin of Valla of saying well what does it look like to apply digital tools to this problem in the same way that nobody goes to an accountant anymore with like a like a Tesco bag full of receipts so why are lawyers still having to comb through like this you know 5 million attachments onto an email kind of a situation and what would it mean if we could make that easier what new business opportunities would that open up because typically the employee employment law space is being a difficult one and a difficult one for law firms to make money from and I imagine that would be then why you were able to or you were identifying this access Gap yeah exactly I remember when I first started speaking to employment lawyers and I would say you know what are some of the questions you would ask on a first phone call and one of the first questions would be what is your salary I said oh that’s interesting why are you asking that they would say you know if they’re below a certain salary even if everything is absolutely valid with the claim I wouldn’t be able to get back my fees and what they would win so it just wouldn’t be worth it for them to hire me and I was like oh like it’s a delivery model problem right it’s just like that that model can’t service people below a certain salary and that salary because of the cost of living crisis and everything else just kept creeping up and up and up and so that Gap just kept widening okay and so tell me the initiation of the concept of Valla your initial business planning because as far as I understand it what you’re doing now is quite different from what your objectives were when you started out yeah the objective was always the same so it was always this why can’t more people have legal services as just a general idea but our first hypothesis was we got really interested in discrimination in particular because we started looking at how a lawyer could help somebody and saying you know well what are the what are the things that take the most time or have the most uncertainty in them and one of the things that came up was the injury to feelings award within discrimination which is you know a huge range it’s like from £1,000 to about 50,000 or something like that and I mean an employment lawyer can ballpark it but it’s not easy to communicate to a user why they’re ballparking it that way and you know a £2,000 problem to someone can be a really big deal a really big difference just a couple of thousand pound and so we thought actually we could build a data platform we could make this super-efficient we could add a lot of insight to estimates when lawyers are talking to potential clients and we could you know add a lot of efficiency to the process what we learned though was we assumed if you could make things more efficient then law firms can move down market and support more people but what we learned and I should have known it already because accountants had the exact same problem is law firms aren’t set up to move down market so the efficiency isn’t going to lead to you know opening up of the market and that’s when I thought oh actually well we’ll open up the market we’ll go directly to the consumers we’ll help them and then if they need to interact with the legal system we can act as that interaction Point okay and so can you tell me a bit more about the history of the business in terms of a timeline your sort of usage to date yeah what your trajectory is because I know it’s making a steep upward curve recently yeah well we started working on the idea in 2020 but we you say we who do you oh so I had it was my original co-founder Kate and I to begin with and startups are rocky so Kate had to get a proper job somewhere along the way as startups go but now there’s actually a team of eight of us and we hired our first employees I think it was in 2021 and started building The Valla that we launched the Valla that we are today in 2022 were you funding this  we had venture capital investment in 2020 text start Ventures here in Scotland and Ascension Ventures down south invested in us we had a couple of innovate UK grants and then when we decided to build Valor as it is today we got a bunch of Angel Investors with BTC experience in so people like Tom blomfield from monzo we also asked Gary Turner from zero to join so I called he zero was the one that beat free agent really so I called him up and said tell me how you beat us and so he ended up joining as an investor and because I often think of us as like zero for the law similar kind of model so we launched in 2020 with basically a really basic case management platform for litigants in person in employment tribunal so was it a typical V1 type product I very basic totally like it had a it had a case chronology tool and it had I mean that was we had a couple of templates a couple of templates that people could use and we started working on the et1 template and a few of those of those main templates for like a grievance and things like that and we partnered with pregnant then screwed the charity with maternity discrimination cases and a few people from pts kind of co-created with us they ran their case through the platform and then they would tell us everything that was wrong okay and so we kind of built it up from there and then things started to pick up a lot once I started going onto Tik Tok in 2020 it was late 22 early 23 and started just answering people’s questions about you know was that really discrimination at work how would I tell how would I even figure that out or what happens after I submit a tribunal claim or what is a preliminary hearing so these were questions that you made up and then answered yourself or were these questions that were actually being asked actually being asked and still even now like if I go live on Tik Tok it’s just like a fire hose of questions about the process like you know how much does it cost who how does this even work  you know what is an et1 how do I figure out my claims you know all these really specific questions and so I just answer them as rapidly as I can so that people can just get a sense of the process and to go back just before we go on that because  I know that’s been a fundamental driver of the growth of your business and there’s points there for lawyers around that but to get a sense of your journey to date in terms of you know you can go into as much as little detail as you want just to give us an idea the  usage levels where you are on a sort of financial trajectory I know you did the crowdfunding exercise was involved in that myself so I’m hoping make a serious return near I’m working on it yeah so we 10x our first year after

[10:00] launch in terms of Revenue we’ve had about 10,000 cases on the platform so far and I can’t remember how many like so we have a free version of the platform with the case chronology and things like that so that’s a 10,000 and then a big chunk of those people will also purchase a template like the grievance or the et1 and then people also use what we call tribunal coaching okay so it’s not representation but it is someone who has litigation experience helping people understand like what is a preliminary hearing and how do I get ready for it and now we’ve  so yeah we’re continuing to grow month- on month really significantly and that’s being driven by as you say mostly social media organic we actually don’t do any paid advertising yeah and was would you like some water oh I’ve got some thanks and was  there are a lot of law firms out there that generate a substantial amount of their business online yeah  and this is typical of the firms that we work with they primarily use  paid ads organic search on Google social media was to a certain extent or certainly was for a period something that was moted as being an option for law firms but largely ignored as a result of experience and that most people will engage with or engaged with social channels when they actually needed something rather than browse I’m going to just browse yeah for legal issues so you started using TikTok was that on purpose sort of we had a so I I got a colleague from one of my old marketing teams to just test it out as a channel for us those tests didn’t really go well when we were trying like trending things and things like that it flopped but I am an avid TikTok user personally and so I understood the channel really well and there was one day  can’t remember what the activity was but something bad had happened to one of the clients that was using the platform and I was really angry on her behalf and I basically just posted a rant on Tik Tok saying you know this is a this is a tactic that I see people use and I really don’t think it’s ethical and I don’t think it’s right and I posted that and that almost immediately got like 20,000 views and I was like oh so there is something here and so then I started experimenting with it and realised there’s the thing about Tik Tok that I think a lot of not people don’t realise is that I think about it as like the new Google in the sense that Tik Tok is replacing Google as a search engine for more and more people as Google’s quality of results declines and because Tik Tok often is just a one minute video or a five minute video that just gets to the point A lot of people are shifting over to Tik Tok to do kind of longtail or transactional queries so my background as an SEO marketer I just shifted my content production over from Google articles to Tik Tok videos and then repurpose those videos across YouTube and then back onto my website as a Google article because it’s actually faster to produce content as video than it is to write like an in-depth article if that makes sense yeah that makes Absolut sense because it will take you what 3 or 4 minutes to produce a video which has I don’t know how many words you’ll be able to tell me better than I can probably estimate  that can then be transcribed into written content which you can then optimise etc for your site exactly and with Tik Tok do you see or are you experiencing more people using it than we’re doing so when you begun using it have you noticed an up swell oh in terms of users overall yeah but both but also those who are interacting with your type of content and coming to you with legal issues that you can help resolve oh absolutely yeah definitely  and I think part of that the algorithm because it’s very good at finding more people you know they often people come to us and they’re like how did it know that I was having this issue at the moment and then it I’ll just pop up you know and they’ll say goodness that’s exactly what I needed and so the algorithm is very good at targeting people once you get good at creating content that can be targeted and yeah absolutely to me there’s a direct correlation between the amount of content that you publish and how well your reaches for any given month although Tik Tok is also quite good for longtail like you are rewarded for having a bank of content on Tik Tok that can be accessed via search but the more you publish regularly the more views and the more audience you will create okay  and so does that then become a bit of a sort of hamster view for you oh totally yeah it’s  and in fact I don’t publish a lot at the moment because we’ve kind of validated it as a channel if you think about as a start-up I almost I’m not yet building a business I’m building a market exploration machine that I can scale into a business once I’ve understood my different channels and things like that so I’ve kind of I’ve validated Tik Tok as a channel so I don’t have to keep publishing on it right now because I kind of understand how it works so now we’re off testing different things but we still get the longtail kind of benefit of Tik Tok and YouTube and Google SEO and things like that okay so you’ve effectively done a large part of your product Market fit and testing by using Tik Tok as a channel and that as opposed to the typical sort of B2B exercise where you would then you would have your product being used by businesses providing you feedback you’ve had it with individual users yeah and now you’re at the stage where you are refining on an ongoing basis your product Market fit without having is there as much of a desire to keep growth in terms of user base yeah so I think definitely it it’s more like  as an early stage startup a lot of what we’re doing is we’re trying to find the levers so that we can pull them when we want to and so it’s nice to know that I can pull the lever if I want to if I if I wanted to get back on the hamster wheel and publish a lot of content I absolutely can but I’m also off searching for other levers that might not be quite so hamster wheelie and so I’m still looking around for other channels yeah and what would you suggest for smaller law firms in terms of the use of Tik Tok oh you know I see so much really good stuff there’s a lot of American lawyers who use Tik Tok really well I’ve noticed that yeah and there’s so there’s so many different things that I think law firms can do I would say ignore the trends occasionally you might do something that actually banks on one of them but I would just ignore them I do what people want on Tik Tok is someone who understands that they have a problem cares about the fact that they have that problem and can explain it to them calmly and reasonably in a succinct way and no problem is too small to explain you know I get down into the very specific part of employment law that my users have questions about and they’re tiny micro problems but it’s an enormous platform and it’s not it’s not just young people on the app no I think a lot of people just think of Tik Tok as like the dancing app for young kids and stuff but the demographics are absolutely huge now in terms of who is accessing it and if you’re just authentically you and answering a question in a helpful way you will eventually do well production value and things like that they really don’t matter in fact I would argue that the harder you try on production on Tik Tok the more you’re going to get penalised initially the more authentically kind of just rubbish you are it works because you have done it where you wear like different hats you’re just sitting at your desk you’re answering questions how did you feel when you first started doing that because I know some you know lawyers are generally quite self-conscious about that type of thing oh I completely understand it and you know I it’s always it’s kind of weird anyway just being a woman on the internet you never know what people are going to say about you just in general but actually I’ve never had a problem on Tik Tok at all I think their filtering is really good but I’ve never even like the filters have caught any kind of like negative unnecessary negative stuff that I’ve ever seen and yeah do like when I do skits I literally just turn my chair wear a different hat and then turn the chair and wear a different hat which is like a common Tik Tok style and otherwise I’m just sitting at my desk to camera and talking and eventually I got a little microphone to make the sound a little bit better but even that is kind of not necessary but you kind of have to do it to get used to it I I didn’t mind too much at first because I thought well this is fun let’s try it  but I have tried to persuade other people to do it and they’re just like oh I won’t look right I won’t and it the audience just it’s not that they don’t care they will actively penalise you for trying to be too slick about it so it’s better to be you know just a little bit more rough okay and  so you started off as a software engineer then became a marketer yeah but now you’re and it sounds to me as if you’ve got very comfortable with dealing with employment law advice

[20:00] yeah you know there may be those within our audience go hold on a minute she’s not an employment lawyer but she you can you tell me a bit more about that yeah well you kind of had to learn I had to learn it to build it and I had to learn it to understand what the audience would be looking for in order to kind of build the products and the content and so now I’m definitely not an employment lawyer but I definitely can help people understand and how the process works how the claims structure works and things like that and I think it’s fascinating because I didn’t realise until I got into this that there that most of the law is unreserved and so we you know we work with a lot of  legal professionals who support our users and some of them are qualified solicitors who are actively with a practicing certificate some of them don’t have their certificate and some of them aren’t even solicitors they’re HR professionals or they worked at a charity and they supported litigation that way and it’s amazing how many different ways you can get that litigation experience to be able to help people and so yeah it’s I think it’s really and it’s not something that I I don’t think anybody really realises outside of the industry that is possible but you do you build up a lot of knowledge over time and then you can at this point I keep it really high level on social media and then I’m like one of our coaches can answer that one for you and then I just send it down that way whereas before I would have to say oh you know you need to speak to a lawyer about that that’s but now I can just send them to a coach and usually that’s fine or now we can also start to send them off to other law firms if you know it’s a case that’s actually useful for a law firm to work with rather than the smaller cases that we typically support and this has been a a ground breaking offering a very different offering within the legal space and certainly within the more retail oriented legal space where do you see the future of Legal Services going from a retail point of view I think that the delivery model of Legal Services is changing and because of generative AI will change much more rapidly now and I think there will be a place in the market for what I kind of call a full fat law firm as I describe it you know where everything is high touch High  kind of handholding 100% representation no unbundling no client doing work anything like that and the people who can afford that we often describe ourselves as like the Ikea of law if you can afford to get someone to come and build a kitchen for you then you should pay for that they’re going to do a great job but if you can’t afford that and you have to do it yourself we’ll give you the bits and the instructions and so that unbundling I think is the future where there is a different price point available for the people who can’t afford the full fat version yeah who can take part of that work and do it themselves and work with a professional and then right at the bottom of the market there is more and more ability for people to just do it all themselves yeah because they might not have time or they might not have money but maybe they have time and they can do it themselves that way particularly in areas that previously would have meant that they were unable to actually access a legal service and representation yeah absolutely like you’ve well you see anyway the trend in civil like consumer issues where people are self-representing anyway it’s nearly one in three now in the employment Tribunal for example so people are already doing it but they basically just have like Google to help them whereas Now Products like mine are saying well what if we tried a different delivery model can we actually produce something that is at a consumer price point but still it’s not full fat but still gives them you know someone to check their documents for them or someone to help them prepare for the hearing but doesn’t represent them at the hearing so it’s yeah it’s classic unbundle in and how’s your interaction with law firms generally yeah it’s so i’m like I learned my lesson from watching free agent grow where they were like oh we’re going to replace accountants and then like five years later they were like we’re not going to replace accountants and I kind of watched that whole industry grow up and the thing that I really observed was it’s safe to say that at the beginning online accounting software was not something that accountants wanted they felt very threatened by it and they were like you’re trying to steal our lunch but what actually turned out happening was that accountants love online accounting software because it automates away the stuff that they never really wanted to do and allows them to focus more on advice and allows them to move down market and they can open up their books to different kinds of clients and they can have different often the cash profile of service businesses in Professional Services can be really spiky and so online accounting software allowed them to have more kind of smaller but higher volume repeatable regular Revenue kind of smoothing out that cash profile and so that’s exactly what I think the law the legal industry is like and so when I talk to lawyers the kinds of questions I’m asking is how much time does it take you to understand whether or not you want to take a case on how much money are you spending to understand whether or not you want to take that case on you know do you want to collaborate to see if we can help you like understand that faster and other than that like we’ve never been like the cases that law firms can service right now are the cases that we’re not interested in servicing we’re interested in the cases that people didn’t have any other option for and so they choose to self-represent so it feels like we’re just trying to fill in the blank parts of the market yeah well it’s something that’s very close to a project that we are working on receptio which is much more about  automating the qualification yes process for firms to save them spending so much time qualifying leads that they don’t want and they know from the outset or to get them into a situation where they’re taking on the clients that they do want more quickly it’s such an issue like it and it’s such a manual problem and there’s a lot of sense making you have to do in that process and so yeah it’s a I think it’s a really expensive problem for firms to try and solve have you ever put a number on it on we when we started testing this we started testing you know what does it take in order for one of our coaches to make sense of a claim and once we started measuring it when we started the average was 8 hours and that was reading the documents prepping for a call going on a 1hour call talking to the user and then giving them a report afterwards and that was averaging it at about 8 hours and then we started using generative AI to do a lot of the prep work on both sides and right now we’re down to 2 hours including the 1H hour call so it’s a half hour before a half hour after but we’re now automating we’re taking the transcript of the call and automating the report writing okay so we should be able to reduce that again okay and how are you using generative EI to do that currently so we basically so GenAI I think it gets a bad route because people use the chat interface for it and that’s all where hallucinations and things like that happen but if you use gen I in  in a much more kind of structured guard railed way you can say you can only you can say to the AI you can only give me back one of one or more of these specific answers and I only want you to do this one task and I’ve given you a ton of context and a ton of ton of direction and you can only pick from like these 10 things tell me which one of these 10 you think it is and so what we’ve done is we ask the user to upload you know what your grievance documents anything you’ve got and the first thing we do is we create we take across all the documents we create a chronology of what’s happened because that’s the first thing a lawyer asks for and then the AI develops like a hunch as to what the key legal claims might be and so it kind of surfaces that hunch to the coach before they go on the call and the coach has the hunch plus the timeline summaries of the documents and the note from the user and then they go on the call and they check Tech is that hunch right like I don’t know and that’s when they you know they dig in do they take so the hunch is generated imagine from a combination of the material plus your own carefully curated materials around employment law and all of the issues that are in that as opposed to a broader search around the internet that’s right yeah it’s all our  own material so we have a legal technologist in house who was an employment lawyer who retrained through a coding boot camp and she’s like our bridge between the law and the product and so she spends a lot of time basically deconstructing the law and helping the AI understand what we want from it when we send those really tightly constrained requests it’s really interesting and I know and I do think it represents the use of AI in future for law firms and discuss this Al actually with Callum yeah from Amicus but the finally I’ve been watching vet and I’ve been really impressed thank you yeah by everything that you’ve done extremely impressed around the progress of the crowdfunding exercise but can definitely see that this is the future of Legal Services how do you see the future of Valla oh I’m so excited about it it’s so to me the first thing that we learned was if you help people represent themselves you can like they will do it and they can do well with it and you know we’ve had we’ve seen so many people with so many great outcomes

[30:00] through that kind of self-representation part and now I think gen has unlocked this whole other level of opportunity for Valla where I keep seeing that that interface between consumers and the legal industry is that huge problem that case assessment problem so that’s the next step for us is helping consumers understand if they actually have a problem that is worth taking forward and then helping the legal industry say oh is this a case for me or is that a case for me or even the courts you know I’ve spoken to employment tribunal judges whose whole job is just preliminary hearings trying to help get those cases into a serviceable format for final hearing whereas a case that comes through Valla is so much tidier and Tighter so yeah for me the big vision is allow everyone to have an option whether it’s you know completely DIY or all the way up to full fat ow everybody to get access to an option to resolve the issue if they want to help them understand if there is a legal issue there and then make it as seamless as possible for them to interact with the wider legal industry you know saving them time and saving the legal industry so much time yeah I think that’s a big problem that’s the issue that creates a big time sync in law firms at the moment is dealing with people who are very uncertain yeah and if you can actually give them the opportunity to do that research themselves yeah and even we you know we tell people you know having looked at everything I’m not sure that you what you think this is what you think it is even just telling them that and why is helping them like uncertainty is the perfect word for it there is a huge amount of uncertainty and just resolving that uncertainty is a product and a huge Market all by itself and then the byproduct of that is that you know legal professionals supporting consumers don’t have to deal with resolving that uncertainty so much well thank you very much Danae thanks very much for coming in and best of luck with everything going forward thank you very much so thanks very much for listening to today’s episode I hope you enjoyed it I hope you’re enjoying our content we’d be delighted to hear any feedback that you have you can find out more about the your Law Firm success podcast at MLTdigital.co.uk/podcast Please Subscribe please share with your friends please share with anyone who you know that you think would be interested