An interview with Mariana Hagström – From Managing Partner to Legaltech Founder
In July’s issue Polina Medvedieva interviewed the founder of Avokaado, Mariana Hagström. The interview covered Mariana’s journey from Managing Partner to Legaltech Founder, differences between the two roles, challenges starting a legaltech startup and whether there should be more women in legaltech.
You’re currently the Founder and CEO of Avokaado, a document automation/workflow company based in Estonia – how did you make the jump from lawyer to startup founder?
For most lawyers pursuing their career in a law firm works according to a playbook. Once you step through the door you start chasing the final destination – a partner position. You volunteer to work late, weekends and refuse to take a proper vacation for years. Everything serves the goal of getting promoted to the next level, to get noticed as a talent and a dedicated associate. When you eventually reach the pinnacle of your legal career, becoming Managing Partner, it is not that common for people to quit. It was a radical decision to leave behind more than ten years of experience with all the recognition and reputation gained, income secured, and the whole team orchestrated to work towards the law firm partnership model. It was an even more drastic step for a female partner, as building up a career in this very masculine industry required extra efforts and the establishment of authority.
Q: It seems the decision to quit such a successful legal career didn’t come overnight. How did you decide to make such a momentous change?
The decision to make a career turnaround did not come overnight. It evolved from the need to find more efficient methods of sharing knowledge internally to delivering legal services to customers with fixed pricing 24/7. When this vision was shaped into a minimum viable product document, the outcome was a DIY platform with automated document packages for the individual and corporate clients.
When partners’ investment into the development of this product did not get unanimous support, my law firm partnership seemed to reach its peak. The chance to stand out in the market and deliver cutting-edge solutions for clients came to a dead end. And this was something I felt passionate about, finding the competitive advantage in the new business model and service delivery. That was back in 2015.
So that’s how an internal DIY platform turned into my own spin-off. This later evolved into an enterprise-level product that empowers lawyers to serve their clients better by enabling the creation of legal solutions to keep the interests of end-users/non-lawyers on point. That product is now known as Avokaado.
Q: What was it like to start your own legal tech company? How did it compare with managing a law firm?
I didn’t actually leave the partner position immediately after founding Avokaado. I kept my partner job and hoped to work as both. I worked at this pace for almost two years, but then I felt the pressure from both my law firm and startup to decide to either leave the legal job or give up on the startup. It was a big surprise to all my partners when I chose the startup and left the partner position to take the role of CEO at Avokaado.
Founding a startup is very different from managing and running a law firm. With a startup you don’t know what you sell and to whom. You try out different business models, segments, markets and attempt to pivot fast enough -– this is all part of the startup journey. As our home country Estonia is such a small market we had to build products that could scale globally from day one. Entering the market from Estonia has been the most challenging part of running the startup, but Estonia is an excellent location for product development and we enjoy being part of the local ecosystem.
Q: What challenges did you face at the beginning of your entrepreneurial journey?
I like to say that I grow year by year into the shoes of a startup founder. For me, the past five years have been challenging, especially as a female solo founder. It has been a true challenge combining fundraising, being a product owner, doing sales and a team lead all alone. That’s why I recommend having co-founder(s) to support you and share the responsibility. Luckily for me, my mentors, community, team and family have all been very supportive.
Even in the toughest times running the law firm I do not remember any of the days being as challenging as running a startup every day. Working long hours and on weekends, high stress levels and competition pressure were something I was used to when building my career at a law firm, but instability and insecurity around every aspect of the startup’s future and existence was something I had to get comfortable with.
I remember a discussion I had with one of my mentors when he really seriously asked me if I was sure that I really wanted to run a startup as it burns you out, destroys families and personal life. And the other talk I had with another mentor when I seriously felt like quitting. He reminded me why I started in the first place, what my mission was and why I shouldn’t stop. I don’t remember needing this kind of advice and support while running the law firm.
Q: Now that you’ve run both a law firm and legal tech business, and learnt and achieved a lot, what do you think the future holds for the legal profession?
The legal profession is surely stepping into its version 2.0 and these are very fascinating times for tech enthusiasts, futurists and legal service providers. After decades the change is finally happening and everyone is trying to pick a direction hoping it is the right one.
In my opinion, the legal industry will be affected by the same trends as business overall – going online, digitalisation and automation. We already see now how cracks are developing in the industry framework -– monopolies for providing legal services and the ownership model is already breaking, as well as time-sheets, billable hours and the partnership model. Legal organisations are now also searching for operational efficiencies, bringing on board more non-lawyers and becoming as client-centric as other businesses.
After this year’s pandemic we’ll also see a shift in where people work. Working from home or any other location will become the new normal for the legal industry after Covid-19, so the meeting -a -client model will change as well. I believe and truly hope that all these changes will also bring changes in law itself and enforcement. After all, it is not practical for online businesses that do business globally to reasonably cope with hundreds of different regulations.
Q: What would you advise anyone plotting the same entrepreneurial path as you once chose?
Everything comes down to your motivation – why you do what you do. I believe I stayed in the law firm too long. I should have left much earlier as it became my comfort zone for a number of years back then. I would not recommend becoming a startup founder during or right after University though. If you are interested in running a startup business, first go and work for one, apply for the founder’s assistant position or any other role you dream of. Work hard and learn. I have seen some of the best and fastest growing startups are founded by the team members of a scaling startup, where they uncovered new opportunities or found a niche to jump into.
Back when I was working in a law firm, I once hired a first year student who felt bored in law school. For him, working at a law firm was a career that lasted two years before he joined the bank’s AML team and shortly after that he jumped into a fintech startup as a co-founder. I think that nowadays legal education gives you a lot more opportunities than it did before. The choice is now much greater than just being able to work as a judge, prosecutor or attorney-at-law.
Q: Do you think women are well represented in legal tech? If not, how do you think it could be improved?
I think it is not so much a question of whether women are well represented in the tech or legal industry but why we see so few women legaltech (co-)founders or partners in law firms.
For me it comes down to the question of what is the dominating factor: is it negative self-talk that is holding them back (“I am not smart enough”, “I do not have that much experience”, etc) or the dependency on other people’s opinion of them, either positive or negative. For example, being undermined as a professional by being stigmatised as “not a leader type of person”, or as a person by compromising your capability to cope with stress by saying “you are a woman and should not take these kinds of risks”. On the other hand, there are people who do rise above all the real and fictional limits and make their own bold choices in life. The interesting question here is why men rise above it far more often than women do.
I was among very few female partners when I was invited to join the partnership.Now I am in tech and a solo founder. All this happened because of lucky factors in my life. As a child, I did not have any “girl or gender excuses” when it came to housework and it was the same for my elder brother. We both did the same amount of house cleaning and garden work. So my parents did not raise me to be a woman but raised me to be a human first of all. Later in life, my first mentor in a law firm encouraged me to achieve more and never be satisfied with past results. He used to say that satisfaction is a close friend to stagnation. When the partnership results were compared, there was never a place for gender discrimination or excuses.
I believe women empower women with their example: the more women succeed in the community and with family, the more it encourages others to pursue their dreams too. The change in the direction for women’s better representation in entrepreneurship starts from home, from a mother’s and/or sister’s example and with the father’s encouragement.