Welcome back to our SMB Tech Innovators podcast series, where we explore the intersection of FinTech, vertical SaaS, and how software combats the rising complexity of running a business. Our goal is to share stories, advice, and best practices from the leaders and investors behind today’s cutting-edge platforms.
Today, we’re highlighting the massive tech shift happening in law with Jim McGinnis, a leader in the financial services and accounting industry and voted one of the top 100 most influential people in accounting for three years in a row. As President of AffiniPay, the parent to several companies like LawPay, CPACharge, ClientPay, and more recently, MyCase, Jim has seen first hand the impact of technology in the legal arena.
(The following was transcribed and edited for clarity)
Share a little bit about your background, you’ve worked for some great companies from Samuel Adams, Procter & Gamble, Pepsi, Activision, Intuit, and now MyCase, a leader in case management software for law firms.
Yeah, I’ve had a little bit of an unusual career. I started with The Boston Beer Company, maker of Sam Adams, way back in 1987. Then I went back to business school and fell in love with marketing. I spent over 11 years with Procter & Gamble, first in Cincinnati, and then I was, believe it or not, in places as far-flung as Guangzhou, China, and Buenos Aires, Argentina. I went to Pepsi and sold orange juice with Tropicana and then an old buddy from my P&G days invited me to lead a division of Activision, the popular video game publisher. .
So I got into video games, which was very cool, and my nieces and nephews loved me dearly. Making games for things like Tony Hawk and James Bond. And then, I went into tax software with Intuit, which is where I got involved with technology very deeply. I got to know the accounting profession. Ultimately, that’s what led me to where I am now when MyCase was carved out of that folio and they were looking for a CEO. I was invited to lead MyCase starting last year, January of 2021.
How would you describe your approach to building financial services products?
I’ve always been passionate about helping accountants, particularly smaller bookkeepers and accountants move to the cloud. And my vision and evangelism for that, I think, led to the recognition in accounting. I’m not a CPA nor have any accounting background. My wife, however, is one. And we used to joke around the house that I had risen to the top of her profession. The fun, though, I think, is that particularly on the small side of things, both accountants and lawyers are really small business owners and they are passionate about helping their clients succeed. And that’s what I’ve been about ever since; whether it’s Intuit QuickBooks or MyCase, my approach is helping professionals better serve their clients.
AffiniPay has been on the Inc. 5000 list of fastest growing companies for 10 years straight. But, I have to say, when markets think about payments, they think of Stripe. How is AffiniPay standing out differently in this market?
I think the future is the verticalization of these things. And Stripe is an excellent product, and it’s used by many people. What makes AffiniPay products really special is that they solve the particular needs of the vertical that we serve. I’ll give you an example. We’re very aware of the importance of compliance with trust accounting. And so we make it very easy for lawyers to move payments to their operating or trust accounts and keep them separate.
Also, we will hold on to the fees until the end of the month. So when they get the payment from their client, it goes directly into their appropriate account. Only at the end of the month do we charge them the fees for the credit card payments. That’s really important, both for compliance. It definitely comes out of the operating account, not the trust account, and also for bookkeeping, it makes it super easy. Now, something like Stripe, which is a generalist solution, does things differently, which is good enough for everybody, but ours is excellent for the people we serve.
Do you think verticalization is going to happen across every industry?
I think many, if not most industries, absolutely. Everybody’s a little bit different. How they do their accounting, how they serve their customers, what their specific needs are, and if someone can better serve them, why not? I’ll give you a couple of examples. LawPay (an AffiniPay company) is recommended by all 50 state bar associations because we’re the most compliant and easiest to use for lawyers. MyCase acquired a couple of really interesting smaller practice management solutions. One is CASEpeer, which better serves personal injury lawyers than even MyCase can or any of our competitors. Personal injury is different because they deal with settlements and a lot of litigation and need to keep track of medical costs and data. It’s very form-intensive and not something generalist lawyers do. So, CASEpeer is built around smart forms to make it easy to collect the data they need. I think that specific solutions will always ultimately beat the generalist horizontal solution in specialized industries.
When I think about the legal profession, it’s not the first market that is thinking about innovation and adopting new software. What’s happening in the legal market that’s driving companies to invest in technology?
It starts with moving to the cloud. And the reason for that is you get your data out from that little prison under your desk that’s your hard drive, up where it’s safe and secure and can be used. That leads to a single platform solution where all the data gets entered once and used many times by all the relevant applications. From there, you get automation. That’s why people do it in the end because it allows them to be more productive, get more work done, and serve their clients better with less hours. And many of these industries, particularly professional ones, are in a billable model.
And then, finally, all of that unlocks the stuff that is beyond the scope of today’s conversation, but the really advanced technologies like AI and ML. So, that, I think, is the future. Legal profession may be a little bit behind. I remember 10 years ago; I was trying to convince accountants that they were going to move to the cloud and away from things like QuickBooks desktop. And it was like a scene in Shrek; they were going to take me out with pitchforks and torches. But now, the accounting profession is very much there. The legal profession may be a few years behind, but not many. So I think the continued investment by so many, the improved solutions that are coming out, and the ease of adoption that we’re all working on will accelerate the trend.
What areas do you think require more innovation in legal tech?
So I think there are three. One is, and it sounds crazy, but lawyers. So much of their time is document management. So I think document automation helping them collect the data, create the documents, manage the documents and get them signed and filed. All that end-to-end workflow and documents is very important in the legal space.
The second is, as I mentioned before, many of these firms are small businesses, and they need and want help finding clients, bringing the right clients in, and helping to make them as profitable as they can. And so I think customer intake and client management is the second.
And then the third is where the combination with LawPay and AffiniPay makes so much sense is the area of FinTech. There’s so much wonderful innovation going on there. A great example is LawPay recently introduced client credit, which is a buy now pay later offering specific for the legal profession. So as we bring more of these, I think very powerful, embedded FinTech ideas to market, I think we can help our law firms better serve their clients.
How do you measure the benefit of embedded FinTech products and how do you make the choice of what to work on over other product investments?
That absolutely is the hardest thing. The first is scans of the marketplace, not just the legal profession, but where innovation is headed in various areas. And buy now, pay later, client credit is a great example of this. This is coming up in so many sorts of consumer spaces it only makes sense to make it available in the legal profession as well.
The second is scans for big problems to be solved. An example of this is we’re launching accounting in just a few days on MyCase because we heard from our customers that they would like an integrated accounting solution where their time and billing, their general ledger, and their payments are all right there in front of them in their practice management solutions.
And then the third, it’s a constant interaction with our customers to understand their problems. We get hundreds, if not thousands of suggestions across the business of little things that we can do to improve the product.
What do you think is the biggest challenge today selling software to small businesses?
Undoubtedly, the biggest challenge in selling software to small businesses is, make it really easy for them to use and adopt. One of the real competitive advantages that MyCase has had is speed to that first benefit. So getting their data in, showing them around, making sure that when they get stuck, they can find their way to solve the problems themselves. So ease of use, ease of adoption are the number one things. And if we ever find any sticky points, that becomes a number one priority for us to fix.
Listen to the entire podcast
Listen to the entire podcast with President of AffiniPay and former MyCase CEO Jim McGinnis, available on Spotify and Apple.