See show notes for this episode: S 02 | Ep 33 The Path from Seed Stage to a Billion Dollar Exit.
Alex: Welcome to Experience-focused Leaders! Today I'm joined by Brian Liu. Brian is the founder, CEO, and chair of LegalZoom—the company that helped redefine access to legal services and ultimately became the first publicly listed legal tech company from the late '90s startup era. Brian, welcome to the pod.
Brian Liu: Thank you, Alex. Thanks for having me on.
Alex: I'm really excited. I've had the privilege of hearing you advise other startups on an advisory board we shared. When I heard that, I thought, "First of all, I could benefit from your advice, and our audience would love to hear your story and the rich experience you bring." So first, tell us: how do you go from arguably the most conservative profession—law—to trying to disrupt it with a startup back in the days when startups weren't "hot"? You were the pioneer.
Brian Liu: Well, I think it's a funny story, Alex. From the first days of law school, I met one of my best friends, Brian Lee, who was my other LegalZoom co-founder. We met on the first day, and we were immediately drawn to each other because we both looked at each other and said, "What are you doing here? Why are you in law school?" We formed a bond because we knew we weren't going to be practicing lawyers forever; that was never really our intention. For me, I just didn't know what else I was going to do.
Alex: Was it to please your parents? Let’s go there. Was it to prove something to them?
Brian Liu: I’m sure that had a little to do with it, Alex.
Alex: I had a business school thing, so I get it. In fact, I thought about going to law school because I didn't know what else to do, until someone told me, "Don't go unless you want to practice law."
Brian Liu: Yeah. Well, after law school, I did practice for a couple of years because you have to learn what's going on. It was good experience because law school teaches you one thing, but being an attorney at a firm—whether big or small—is something entirely different. There’s a huge disconnect. That’s why we started LegalZoom. I knew there was a disconnect between what the average American actually needed and what they were teaching you in school or what you were doing at a big law firm.
Alex: And what was the biggest example?
Brian Liu: Here’s something funny: the last thing they actually teach you in a Wills and Trusts class is how to actually write a will. You learn all the theories and weird situations, but you don’t know how to do the basic task.
Alex: Wow. So it sounds like it is purely academic training, not practical, applied training.
Brian Liu: Absolutely. So, what we always say—and I think this is still true—is that we never tried to put lawyers out of a job. It was about creating additional access. It was about democratizing the law because we knew there were many people who didn't want to pay the amounts lawyers were charging. There are good reasons why lawyers charge those amounts—they have liability and many other factors to consider—but it means they can't undertake those basic services cheaply. We wanted to open the market for everyday Americans so they could get the protection of an LLC, write their own wills, or trademark their products without the additional cost and baggage of a professional lawyer. We acknowledged from the beginning that there are still good reasons why you need a lawyer, which is why LegalZoom has lawyer-assisted services on the platform.
Alex: I’ve heard through the news that there were challenges from the institutional legal system. How did you handle that? What was that journey like for you as relatively young founders? Does being trained as a lawyer prepare you for conflict in a startup, or did it feel very personal?
Brian Liu: As a founder, it’s tough. We knew that if we were challenged too much at the beginning, it could bring us under because we didn't have the resources to defend ourselves. We tried to stay under the radar as much as we could, but that wasn't possible once we had Robert Shapiro as our co-founder and were doing so much PR.
Alex: And just for our audience, Robert Shapiro isn't just a "Legal Eagle"—he was O.J. Simpson’s lawyer.
Brian Liu: Right. He organized the "Dream Team." Having him as a co-founder meant he insisted we get a formal opinion from a law firm saying that what we were doing was supportable, legal, and legitimate. Luckily, California had a law on the books for "legal document assistants," and we were careful to stick to those rules. Operating in other states was harder; some investigated us. But at its core, we were filling out legal forms. Legal templates and "fill-in-the-blank" forms have been around for decades. You used to be able to buy Nolo books at bookstores with tear-out forms to draft your own documents.
Alex: So you were like "Legal Docs for Dummies," unlocking the lower end of the market while creating room for premium services for attorneys.
Brian Liu: Yes. And there was software at the time, like Quicken’s Willmaker. All we did was put that online as opposed to making it a static product. With a book, you have to read 100 pages just to do a simple document; we could help you do it online in 15 minutes.
Alex: Fast forward to today’s world, where we have AI like Harvey or Claude. A number of legal-tech AI unicorns have emerged. What has changed, and what remains the same?
Brian Liu: The main thing that’s changed, Alex, is that legal practitioners and end-users are finally demanding that lawyers utilize technology.
Alex: And are these clients large corporations or small business owners?
Brian Liu: Small business owners have always been early adopters because they are more willing to take risks to save money, whether it's AI-drafting simple documents or heavier levels of work.
Alex: Brian, I lost your sound for a second. Are we okay now?
Brian Liu: We’re okay. AI will probably edit this to make me look handsome, too.
Alex: (Laughs) So, the individuals and small business owners were always eager to innovate due to cost constraints. But you’re saying the B2B or enterprise component is what's truly changing now? Historically, that was all premium services with lots of junior associates supporting partners.
Brian Liu: Yes, that is changing completely. One reason is that large law firms kept increasing their fees to the point where clients demanded efficiency and the adoption of AI. Some large firms will fight this, but it will be difficult. It’s not just AI; there are alternative legal providers like Axiom and other in-house support models that are helping bring costs down.
Alex: That makes sense. But looking back a few years, prior to the AI takeover, well-known entrepreneurs tried to build Atrium to disrupt those costs in Silicon Valley, and it famously went wrong despite great investors. Why do these attempts fail, and why is now different? Is it the technology, or a "perfect storm" of pressure?
Brian Liu: That is a very relevant question. I used to tell people that a venture into legal tech or compliance is a "thank you for your service" mission, because it is not an easy journey. You won't find many interested investors; you have to do a lot of bootstrapping and reach deep to ask yourself why you are doing this. It can't just be because it’s financially lucrative. I remember coming into the office on the morning of 9/11. We had only started a year and a half prior. I asked my co-founders, "What is going to happen in the world? We’re doing a legal startup while there’s so much uncertainty." You have to know why you are there. Traditionally, that was the key to success. What has changed in the last two years is that private investors are finally interested in the legal tech space. It has become an investment "darling." Now, you have people without legal backgrounds coming in with fresh perspectives on democratization, and existing founders have much more access to capital. You aren't on an island anymore.
Brian Liu: I remember coming into the office on the morning of the 9/11 attacks. We had only started about a year and a half prior. I remember talking to my other co-founders and saying, "Geez, we don’t know what’s going to happen. What is going to happen in this world?" We were there doing a legal startup, but there were so many other things going on. You really start to think: Why are we here? Why are we doing this? Why don’t I have a stable job? Right in the midst of that chaos, I was trying to pay for my house and everything else. There was so much uncertainty, and you have to know why you are in it.
That has always been the traditional key to success for me: founders of a good legal tech startup must really know their "why." I think what’s changed in the last year and a half or two years is that, all of a sudden, private investors are really interested in the legal tech and legal tech-adjacent space. It’s become one of the darlings of the investment world. What’s great is that you have a lot of people who aren't lawyers—who have no legal background—who have decided that this is a great area for disruption, improvement, and democratization. They’ve come in with a new perspective, which is fantastic. Also, for existing founders, there is much more access to capital than there was before. I think it’s still relevant why you do something; it’s always relevant. But what’s great is that there is additional support out there now, so it doesn't feel like you’re entirely on an island anymore.
Alex: Got it. So, there’s likely going to be more innovation because the profession had it coming. It stayed pretty resistant to change, at least in some pockets—not your "bottom-up" pocket, but the higher echelons where fat margins led to high customer costs. There was that pressure, then one breakthrough success story, and now it lends itself well to LLMs. Everyone thinks this is the time to break through and they are jumping in.
What’s your take on the "tourists"—the people who think, "I had a bad experience with a lawyer where I was overcharged, so I'm going to go fix that"? That is often a founder's motivation—like the story of not being able to get a taxi on time leading to Uber. Are these people going to stick it out through the challenges? Will there be consolidation?
Brian Liu: I think that’s not unique to legal tech; it’s true for everything. You have to know why you’re doing something. For example, in the restaurant industry—which is completely different—if your idea is to start a restaurant just to make money because you "like trying new places" and think it’s "fun," you’re not going to survive.
You have to love doing this. It has to be a deep passion. Without that deeper "why," you just won’t survive the first time you face hardship—and you’re bound to face hardship multiple times.
Alex: Talk to us about what happens when you’re going through those hardships. LegalZoom was a nearly 20-year journey for you.
Brian Liu: Yeah, I was CEO for the first seven years, then I stayed on as Executive Chairman until 2012, and then I remained on the board as Chairman until 2018.
Alex: That is a long perspective. That’s probably an average of 20 crises per year.
Brian Liu: Yes, lots of challenges and crises. Luckily, as I look back, we didn't have anything that was an existential threat, but we definitely had major issues. I have to laugh at this one: there was a certain state that I won’t name that accused me of illegally practicing law without a license. It was a criminal complaint. The only thing I could say was that I had never been to that state, I would never travel to that state, and I would never even fly over that state! Somebody in a different state was threatening to put me in jail because of what we were doing. I pretty much ignored it, and I laugh about it now, but—
Alex: But at the time, when you were speaking to your partner, was that a laughing matter? Or did it feel real?
Brian Liu: It was more like, "Okay, I’m never going to go there." But really, it could happen. You get arrested for driving over the speed limit, they see a warrant for your arrest, and suddenly you’re in jail for the unlicensed practice of law. I'm still a little afraid to go there, by the way—they know where I am!
Alex: When you think about existential risk from your current perspective—having seen your journey and now advising other companies—few things seem truly existential. But at the time, especially during your first exposure to a crisis, it probably felt different. Where did you find the perseverance, the discipline, or the "meditative break" to restart and deal with it rather than just reacting?
I notice that for myself personally, when something happens at work that I don't like, I hide it at work, but then my daughter comes up with a light request and I react poorly. How do you process the stress of disrupting an industry?
Brian Liu: What felt existential at the time were the various investigations instituted by state Attorneys General and Bar Associations. We had to go and allay their fears. We had a great General Counsel, Chaz Rampenthal, who was a former Navy pilot. He was the type of guy who could walk into those committees and, when asked what we were doing, speak with authority. He’d say, "We know where the lines are, and we don’t cross them."
We found that the more we got in front of these committees and Attorneys General to show them who we were, the better it went. We weren't being shady or trying to put lawyers out of business. We were doing something good for the public, and we actually wanted to help lawyers by integrating them into our platform. The more open we were to their suggestions and dialogue, the more we realized that open lines of communication were much more important than a fight.
Alex: Speaking of communication, what were your challenges as a leader when you were starting out versus now that you’re advising others? As a chair, you have a steward role. What would you say to your younger self to address issues earlier? What is your advice to those of us on a "pre-IPO" journey right now?
Brian Liu: People tend to think it is their ideas alone that make something successful. Most of the time, it is actually about the organization and the people you have. Learning "people skills" is what tends to make a venture successful.
When I was in law school, I actually applied for a joint program with the business school. They didn't let me in. They told me, "Brian, you have to understand that business school isn't about the subject matter. It’s not about learning finance, accounting, or marketing. It is about learning how to deal with others and how to work together in groups." I understand that now, and I wish I had done more to grow that part of me a long time ago.
Alex: I actually went to two business schools—I did an undergrad and an MBA. I thought I understood what they were saying at the time, but you don’t truly internalize it until you "break some eggs" making a few omelets.
In our pop culture, we think of the law and business as fields for people who want to "win." We like legal dramas because of the satisfaction of winning the case at the end. But what you highlighted is powerful: winning the argument doesn't necessarily help the relationship or the bigger aim of building something. As a CEO, you have a lot of power and can "win" in many ways, but knowing when to use that muscle and when not to is a journey.
Brian Liu: Absolutely. In our culture, we think exceptional entrepreneurs start these giant mega-caps all by themselves. I guarantee you none of them would have been successful if they weren't able to attract people with their vision. You have to communicate your vision so that others believe in it. Mark Zuckerberg eventually wasn't personally writing the code or figuring out the algorithms for Facebook; he had a leadership role, but those things were the work of a group of really smart people following a vision.
Alex: So what you’re talking about is really trust. We trust in you as a leader, and you trust us as individuals to work together toward a goal.
Brian Liu: Overall, leadership is a set of skills you don't learn as a subject area in school. I don't think there are classes that really teach you; you just have to go out and do it.
Alex: Yeah, there is no class on trust, even in business school. What I found interesting was that one of the most popular classes at Stanford was called Interpersonal Dynamics, or popularly known as "Touchy Feely." It talked a lot about influence—how to be vulnerable or share certain things to influence others. That’s great, but even that had a transactional vibe when I reflected on it over time. I think it was a good start for becoming self-aware, but if you start with the goal of transactionally influencing someone, you’ll fail—people aren't dumb over the course of long relationships.
That’s why a deep passion for what you’re building is so important; it’s authentic. You can learn specific skills, like keeping your palms open to signal trust, but if your underlying purpose is to manipulate someone, they will smell it. You have to go to a level of depth where you are building real, long-term trust and working toward a common goal.
Many of our audience members work in regulated industries with compliant communications. Our view is that the focus should be on building trust between the creator and their audience. If you do that, everything else works out. But you can't build trust by creating a wall of information and hiding behind small print. That might be legally required, but it isn’t a way to build trust. You need to make things accessible—being both compliant and relationship-building at the same time. What are your thoughts on building in a world where trust is no longer a commodity and seems to be lacking everywhere?
Brian Liu: I think one of the things everyone is facing right now is whether AI can take over what they’re doing. That human trust element is incredibly important because users want to feel that connection. We lump many things into this idea of "trust," but a main component is understanding the human impetus—the reason why you are doing something.
At LegalZoom, our mission was to support the entrepreneurial journey—to really be on the customer's side. Our slogan was "We put the law on your side." We made that part of our story because people remember stories. Our story was: we are also business owners and entrepreneurs; we understand how you feel. We wanted everyone to have the benefits of the law so they could spend less money on legal matters and more on their business.
Alex: Got it. So you weren't building trust just by having them fill out extra-long forms to waive liability.
Brian Liu: No, it’s about authentic stories and reasons for why you do what you do. For example, my dad was a small business owner. I saw what he did for our family when he started his business. I remember going to his first office in Pioneer Square in Seattle. He had four desks in that office. I asked him, "Dad, why did you get four desks? You’re the only person here." He said, "Those desks will be filled. People are going to come and sit in them. I bought them because they will be here."
When you see and feel that, it’s powerful. Humans have an intuition; they can tell when you truly understand what they are going through. When they see you are helping them in a genuine, authentic way—not just something you read in a book to influence people or make money—that is how you build loyalty and trust. They think, "Alex, we’re going to be here for you because you’re here for us." I hope people realize that AI isn't able to do that. AI can do many things, but it will never have that...
Alex: Empathy. That bonding and authentic care. AI can sound very good, but you know it isn't authentic because it doesn't have a story.
Brian Liu: Exactly.
Alex: What a beautiful "mic drop," Brian. Authentic caring and storytelling as a way to describe the most legalistic, process-driven profession. I love how you connected it back to your dad. As we wrap up, what final words of wisdom can you share with our audience as they embark on bringing care and storytelling into their communications? What do you wish you had learned to get to that IPO faster or avoid a few "sharp corners"?
Brian Liu: I’m actually happy we went through everything we did, including the delays. We had difficulties with some early investors, and I don’t think we were ready for an IPO back then. We actually filed for an IPO in 2012 before finally having it in 2021. I’m glad it didn’t happen earlier because the team wasn't ready for the reality of being a public company. I’m not even sure an IPO is always the best path.
Alex: So, essentially, accept the journey? Sometimes we try to force it.
Brian Liu: Yeah, as long as it’s not too painful, the journey is great. The challenges are what you actually remember. You don't remember the days where everything went perfectly; you remember the milestones and how you overcame the obstacles. That is what makes it beautiful.
Alex: Well, Brian, I will definitely remember this conversation. I'm glad our journeys crossed. Thank you so much for coming on the show.
Brian Liu: Thanks, Alex.