- Legal tech company's stock price up 28% in first day of trading
- CEO Kiwi Camara says industry starting to shift 'from services to software'
(Reuters) - E-discovery provider CS Disco Inc made its public debut on the New York Stock Exchange on Wednesday, with shares jumping more than 28% over their opening price to close at $41.
The Austin-based company, which provides artificial intelligence-powered software for e-discovery, legal document review and case management to corporate legal departments and law firms, listed under the trading symbol "LAW."
"We think that software is coming to the legal function, that software will help automate away a lot of the services that have historically been used by legal departments and law firms," DISCO founder and CEO Kiwi Camara said in an interview as shares began trading Wednesday.
DISCO priced the initial public offering of seven million shares of its common stock at $32 per share, above the expected range. Based on the company's expectation of 56.28 million shares outstanding after the IPO, Wednesday's ending $41 share price would value the company at about $2.3 billion.
DISCO is going public as the industry is "in early stages of this transition from services to software," Camara said. With the IPO under its belt, the company plans to invest in and scale up its go-to-market organization in the United States, Europe, Canada and eventually elsewhere, he said.
"We decided to go public because we think there's really an opportunity to build a big independent company in the legal technology space," Camara said. "And we think being a public company makes clear to our customers, who are general counsel at some of the largest firms in the world, as well as many law firms around the world, that DISCO can be a long-term partner for them, as they think about how technology will transform their work."
DISCO, which launched in 2013, grew out of Camara & Sibley, a Texas litigation boutique that Camara helped found. The company set out to "build software to automate the things we were doing that weren't why we went to law school," he said. "That's the magic of legal tech."
Camara said early on there was "reluctance to invest in legal tech, because there had not really been a home run outcome in the space."
"We hope the DISCO IPO will be a catalyst for a lot more early stage financing and a lot more innovation in legal tech," he said.
Investors have been eyeing the sector, with companies in a variety of legal tech and online legal services spaces from Clio to Rocket Lawyer to Reynen Court attracting funding in the past year. DISCO is also the latest legal tech-related company to go public in recent weeks, after online legal services company LegalZoom Inc and Palo Alto-based software provider Intapp Inc made their market debut July 1. Dealmaking has also been active in the e-discovery space.
Other providers, including Relativity ODA LLC and Exterro Inc, have also touted the promise of artificial intelligence to help transform services for legal teams, making acquisitions and revamping offerings in recent months.
Camara said that what differentiates DISCO from its competitors is "how much we use technology," emphasizing that DISCO is a software business rather than a services business. The advantage to utilizing automation and AI in e-discovery and legal document review is becoming more important as "the volume of data that's involved in legal matters explodes," he said.
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