April 20, 2021
InCloudCounsel Spotlight Miles Chan

InCloudCounsel Spotlight: Miles Chan, VP / GM of Insight

Three years after leaving BigLaw, Miles Chan was again buried under a mountain of contracts. He spent most of 2018 poring over limited partnership agreements, side letters, and most favored nations elections to help the world’s most sophisticated asset managers find a better way to meet the countless investor obligations buried within thousands of pages of fund documentation.

 

The idea germinated a few months earlier after lengthy talks with several prestigious private equity firms. It quickly became apparent to Chan and Troy Pospisil, the founder of contract automation and intelligence platform InCloudCounsel, that asset managers needed a purpose-driven tool to help them organize and manage the countless promises made to their investors. Not meeting those promises could jeopardize investor trust, hinder future fundraising, and draw regulatory scrutiny, potentially in the public eye as the industry became increasingly recognized.

 

“In today’s economy you can find whatever you’re looking for, whether it’s organic socks or an amazing CRM,” Chan said. “It struck me that while leading asset managers were becoming increasingly worried about the growing number of obligations they were required to manage, there was no software solution to address their unique concerns. Moreso because these obligations were owed to one of their most important stakeholders, their LPs.”

 

With rising competition for fundraising, and sourcing and closing deals, it also shouted opportunity. 

 

After a three year research and development cycle to deeply understand the problem, InCloudCounsel in the spring of 2021 launched Insight, the first purpose-built SaaS solution designed to help forward-thinking asset managers strengthen investor trust, drive organizational accountability and compliance, and save time and money. We sat down with Chan, Vice President and General Manager of Insight, to learn more about how the company has scaled to help its customers and attorney partners find the freedom to do what’s most important to them.

 

Q: What prompted you to pivot away from a traditional law career?

 

In law school I gravitated toward corporate transactions because they seemed like a nexus. I always saw law as a stepping stone to business, and I felt like learning how to do that work was the easiest way to bridge the two. 

 

What became very apparent to me as a summer associate, and later as a full-time employee, was that the legal industry wasn’t thought of as a traditional business and was not yet impacted by technology. As a young attorney, I looked at the tasks I was given and thought, “a lot of these individual workstreams lend themselves really well to being improved and expedited by technology. If we could separate out the less valuable work from the high value work, both attorneys and clients would be happier.”

 

I started interviewing for business consulting positions and had offers from some of the top firms, but I took a mentor’s advice to stay in law. I could use the experience to identify gaps and what I could do to fill them. What quickly became apparent was that these big law firms are good at certain things: high-end litigation, bet-the-company transactions, bespoke fund formation, and all of the complex, nuanced work where it makes sense to have the most seasoned professionals in the world. Then there’s this other layer of work, what I was doing, that was actually not the work these firms want to be doing. Their business models don’t support it. They don’t distinguish whether someone is working on something valuable like negotiating a purchase and sale agreement or something simpler like proofreading a document or negotiating an NDA. I very clearly saw the same thing Troy and InCloudCounsel Co-Founder Ben Levi were seeing: You need to match the right labor with the right professionals and workflow. After starting at zero, learning how to negotiate with no expertise, what they described made perfect sense. With the right model, you can decrease cost while vastly improving quality.

 

Q: How have you seen InCloudCounsel’s vision come to life during your six years at the company?

 

The thing that struck me about InCloud was how Troy and Ben were very focused on a very discrete, specific set of problems – NDAs and other routine document types – and they always talked about those first. When I spoke to other legal tech companies, I was often not clear on the exact problem they were trying to solve. 

 

I realized we were doing something special around my two year mark. I looked at the crop of clients we brought in in 2015, and how they grew with us through 2017. In particular, the growth rates for two accounts, two of the most prominent asset managers in the world, were astronomical. They were adding thousands of documents annually and asking us to handle these problems for them across strategies and across the globe. These are companies that once spent vast amounts of time and resources on routine documents, and they could now dedicate their valuable internal resources to much more important work. 

 

Alongside that, we looked at the attorneys in our lawyer network and asked how much revenue is that same set of attorneys bringing in two or three years later? We saw our attorney partners growing alongside our business. We initially thought people would only want to give us two to four hours of their day. We were dead wrong. What we found is people were interested and ready to do this work for their entire livelihoods. This became peoples’ full-time jobs. We had people who were outearning their BigLaw positions with the flexibility to work wherever and however they wanted as long as the work got done. It’s extraordinary and rare in a two-sided marketplace like ours to see both sides happy and productive.

 

Q: How did the company identify the pain point and begin developing the Insight product?

 

As our customers began to trust us to solve one fundamental problem, they started telling us about other pain points. One of the big challenges we kept hearing about is what became Insight: How do you efficiently organize, fulfill, and audit the thousands and potentially tens of thousands of investor obligations outlined in the hundreds of limited partnership agreements some asset managers have across dozens of funds?

 

At its core, InCloudCounsel is a company that streamlines legal processes by turning documents into data. Solving the fund obligation problem was all about turning some of the most complex legal contracts in existence into data, and layering that with fulfillment and audit capabilities. While these document types are different than those in our primary business, it was a natural leap to take the data in previously negotiated contracts and make it actionable on a centralized platform. 

 

The product came online in a pilot program in June 2020, and we were fortunate enough to have a marquee set of customers who put their trust in us from the time it was in the very early stages. Several of them partnered with us without even seeing the actual software. The benefit of that was that Insight was in a very flexible state, and we were able to quickly incorporate feedback into development. Besides having buy-in from the largest late stage asset management companies, we also had several middle market type firms and even early stage venture capital and growth equity firms participating in the pilot. We quickly found that amongst this diverse set of asset managers a common set of problems and features exists. Solving them could meaningfully improve the operations of those customers while also helping them achieve strategic success. Based on this feedback, we were convinced that this [fund obligation management] was an industry-wide opportunity.

 

Q: What was one of the most important things about leading the development of Insight?

 

The only way we could solve the obligation management problem was to deeply understand the contracts underpinning it. I’ve read dozens of LPAs and SMAs, hundreds of side letters, and analyzed dozens of compendia and summary documents to truly master this very nuanced area of law. What I love about this problem is that many of our customers focus on this documentation for a living, and we need to be true experts in order to be able to provide a credible solution.

 

We also have an amazing product team that sits between myself and the engineers. They’ve been instrumental in translating a pure business need into an actionable set of features that are truly impactful for our customers. We have a razor sharp focus on building features that will significantly improve their lives.

 

The biggest thing I’m learning in this seat is what is broadly applicable to our clients and most fundamental to changing the way they do business, and what are short-term, one-off asks that we can build out.

 

We want to address every issue and every situation and every feature request, but this is also a tool we think will be around for decades. Our strategic focus is managing a broad set of problems and building a product that looks to the future in terms of different use cases and other aspects of functionality.

 

Finally, because these are loaded complex legal contracts, we needed a set of data capture tools that would allow us to operate at multiple levels of detail, from the document’s text to a very simple description a non-legal user can understand and everything in between.

 

These obligations implicate a bunch of different functions in addition to legal – accounting and finance, investor relations, and even deal professionals. It was critical to build a system that would be useful to every function across the organization, each of which has discrete pieces of work they need to complete to comply with their fund obligations.  

 

Q: What do you see for the future of this product and the category it creates?

 

There’s nobody better than your customers to tell you what the problems are. If they trust you as a vendor, they open up to you in many ways. That’s how we got to NDAs, and that’s why we created Insight. It’s a great way to lead a business. You focus on solutions to real problems that are worth building and that customers are willing to pay for, versus working in the abstract on something that might not have an application. By making customers a more significant part of your business, you take the risk out of the unknown. As long as your team can deliver, you know you are building things that customers need and want. Today, as soon as we onboard Insight customers, I’m having conversations with them about what features we can add, how we can better integrate this platform into their day-to- day operations, and how we can continue to unlock the valuable data in their fund documents. 

 

Perhaps the most exciting part of Insight is the platform’s infinite potential. While we rolled it out for this very complex and acute use case — fund documents —  when you boil it down Insight is a platform that allows you to turn contracts into data. That’s a big idea that applies to any legal document with obligations in it. We are already thinking about our next use case — purchase and credit agreements — and will very quickly be in a position to roll this out to any contract type whether it’s a vendor contract, IP licensing agreement, employment agreement, or any legal contract that has meaningful obligations that customers must manage. 

 

Learn more about how Insight can help you strengthen investor trust, drive organizational accountability and save time and money. Schedule a demo today.