CS Disco, Inc. (LAW) Earnings Call Transcript & Summary

Thanks for coming, day 2 of the BofA Tech Conference. My name is Koji Ikeda. I am one of the software analyst and the enterprise software team here at BofA. Absolutely thrilled here. We have CS Disco. We have Kiwi Camara, Founder and CEO; and Michael Lafair, CFO. Thanks for joining us. Super excited to do this session. So I guess to really kind of kick it off here, maybe a little background introduction of your guys -- of yourselves. Talk about what DISCO does for those that are not familiar with the name in the room? And maybe talk about the opportunity or the size of the opportunity, what are you guys [indiscernible]?

Sure. So I'm Kiwi Camara. I'm from the Philippines, studied computer science and then became a lawyer. We built the first version of DISCO's original product, DISCO Ediscovery, as an internal tool at my old law firm and then spun it out in 2013 and have grown the business from there. In general, what we're doing is automating we're greatly accelerating the parts of legal practice or legal work that don't require human legal judgment [indiscernible] why anybody went to law school. If you look at our first product, it helps lawyers find evidence in huge collections of enterprise documents and data. So think about millions, tens of millions or hundreds of millions of office documents, e-mail, text and chat, video, audio, buried in those documents is the evidence that lawyers need to figure out who's right and who's wrong, and ultimately to prove their case in front of a tribunal or in a settlement discussion. So that was the original product. Since then, we've diversified the product portfolio, going in later in time with things like DISCO Review, which is AI-powered automation of the actual lawyer review of those documents, and then DISCO Case Builder, which extends the platform to witness testimony, so depositions and transcripts of hearings and trials. And then last quarter, we announced our acquisition of 2 additional products, DISCO Hold, which allows enterprises to preserve data in modern cloud systems that may become important in legal matters downstream. And DISCO Request, which is a workflow tool that legal departments use to manage incoming requests that trigger legal action. For example, service of process and lawsuits, third-party subpoenas, but also things like DSARs under GDPR or law enforcement data requests here in the United States.

Got it. And Michael, a little introduction on yourself?

CFO. I've been in business for almost 5 years. It's a fascinating business because as everyone -- folks that are familiar with the business, we're a usage-based model. And we have basically a land-and-expand model where the goal is to sign the customer up. And once they sign up, what we've proven as long as I've been here and even before I joined, we're able to expand those customers as evidenced by our strong dollar-based net retention. It's a very interesting model. I think it's proven really successful for DISCO and our customers love it because it has the benefit of a very quick sales cycle. And so once we get in the door, we can then expand and it just helps accelerate our overall growth.

Got it. Got it. So I'm asking every management team 3 questions, 3 of the same questions, 1 on the macro, 1 on kind of the hiring environment for yourself and then 1 on compensation. So first question on macro. A lot of things going on in the world, too much, in my opinion, with Russia, Ukraine, the war over there, the European macro, China, a lot of things going on with their, inflation risks, interest rates are rising. I mean, risks of recession, a lot of things going on in the macro. So from a high level, what are you guys seeing, any sort of impacts from the macro out there? And are you adjusting the business at all, if at all, for any sort of potential recession in the future?

The short answer is no. So so far, we've seen limited operational impact to the business. We have relatively small international exposure and no Russia or China exposure. I think it's less than 6% of the business today. In terms of adjusting to the general downturn in the market, the historical wisdom is that the kind of legal work that is most happening on our platform, that's a disputes work, actually picks up when an economic cycle turns the other way. So if you look at post '08 or post dot.com crash, those were times where it was the disputes partners and law firms who are the most busy of the corporate capital markets, people who were less busy. I don't know if I would go so far as to say that our business is countercyclical, but at a minimum, we believe the business would be resilient in the event of a downturn. And we were reassured by the behavior of customers in the early days of COVID when nobody knew quite how bad that would be, virtually all of our customers continue to pay, their used cases continued. And I think it's just a testament to the fact that people are using our system to do things that are, by and large, nondiscretionary when you get sued, you need to deal with it. .

Got it. Got it. And second question, hiring environment for DISCO. A year ago, maybe even up to about 6 months ago, it sure sounded like in the markets, people can't find enough people to fill the seats. So it was difficult to hire. Things have changed. So how are you guys thinking about the hiring environment for your own capacity right now?

I think it has loosened a little, but it's -- I would not -- this is still a very tight hiring market for the kinds of people that we're looking for. So where that will go? I don't know. What we've done is a couple of things. Earlier this year, we sort of normalized stock-based comp at DISCO. Historically, we had been relatively low compared to our peers. And now I think you'll find us to be in line with our peers. So that helped the total kind of package for folks. And then second, we've diversified the markets in which we're hiring. So historically, virtually all of our employees have been concentrated in Austin. Now we are hiring across all roles in all 3 DISCO offices, Alston, New York, London and we've begun to explore other parts of the world as a sort of hedge against U.S. wage inflation.

Okay. Okay. Okay. And you just mentioned a little bit more of stock compensation. I mean, is that kind of how you're thinking about the mix going forward, just a little bit more stock comp going forward because one of the big debates that we're hearing out there within the investment community is how companies both the public ones that have been around for tens of -- multiple decades to just recent IPOs, right? How are they going to manage compensation structure? So maybe a question for Kiwi or Michael, how do you think about comp plans going forward? I mean it does sound like you're increasing the stock comp going forward a little bit?

So we normalized it. So this January was our first round of equity grants post IPO. And we took that opportunity to normalize the grant based on the SBC levels that we observed across our peers. We are comfortable with where we are from a comp point of view at the moment. We don't find that we're having comp-based attrition or that we're struggling to close the people who we want. And if you look at recent senior hires that we've announced, we just hired a new CMO. We hired a new CHRO. We hired a very senior person on the product team who is formerly Chief Innovation Officer at Brian Kao, a major law firm. So both at the high level and then as we go down the ranks, we're seeing the results we want in terms of attrition and recruitment and so.

And I'll just mention one slight clarification. So we went public last July. And we did a, I think, a small equity grant, kind of normal course last year, I think, in Q4. And then in January, what we did is we looked at the -- and that was just kind of normal course, new hires, commitments we've made for IPO. In January, we did a full scale look at the entire company. And this is pre kind of the bigger macro environment, and did effectively a refresh, normalized where we were compared to our peers, we were probably slightly under in many cases. And so that was a really good thing and it was 100% RSUs across the entire company, and we've been private for many, many years. So the benefit, obviously, of ours is, it is effectively cash comp. And we did that in January. So we got a little bit ahead of kind of what's going on in the world. We are going to do annual refreshes. We're going to look at that again in January. But we feel like we're in a really good spot today partly because of the timing of our IPO, and also the fact that we did something in January that was fairly significant, but really normalized us to the market. .

Got it. Got it. Thanks, Kiwi. Thanks, Michael. So kind of moving on from those questions, I wanted to talk about the competitive differentiation of DISCO I was introduced to the business last year as part of the IPO process and learned that you guys were about a decade old now. So congratulations 1 decade. Time flies. Absolutely, right. But what's interesting about when learning about your business was how your stack is built, right? Elastic surge, AWS and very modern technology for Ediscovery. So I guess what I'm going with is what is your competitive differentiation from a high level? And what is it about the DISCO product offering that is enabling the lawyers, the law firms to gravitate towards your product?

Yes. Well, I would say number 1 is if you look at how legal departments have solved these problems in the past, it's been heavy, heavy services. And so typically, when we come into a new customer, we're displacing 1 or more service provider relationships, whether that's the Ediscovery practices of the Big 4 accounting and audit firms or some of the private equity backed services roll ups in the space. And so many of our core advantages are all the classic advantages of software over services. We're able to automate wholesale, large parts of the process that required humans in the past. We're able to allow people to be self-service, so they can log into our system, run searches, orchestrate reviews, measure the pace in progressive reviews, rate productions to go out the door to the other side, all things that used to require a heavy layer of human project management can now be done by lawyers and other legal professionals directly in the platform. That's number one. I think number two, and this is what comes across when you go talk to our customers, we have this relentless focus on user experience at DISCO. And it's not about building products that would be easy for maybe most of you who are not lawyers, but it's about bringing together a willingness to invest in valley grade R&D so we can build anything we come up with. But then pairing that with deep legal domain, very senior former practicing lawyers who come to DISCO, work in our product organization, but work in lots of other parts of the company to build these product experiences that feel magical to lawyers, that are intuitive, that solve the full problem, that don't force the lawyer to make choices they don't need to make, they give the power and scale they need for their largest and most complex matters but are easy enough for a simple internal investigation. So that kind of lawyer-focused user experience is number 2, and the thing that you'll hear customers cite most often. And then number 3 is really leveraging modern analytics and AI to measurably improve the speed at which layers can get to evidence in these big cases. If you think about lawyers going through millions, tens of millions or hundreds of millions of documents, messages and so on in a given case that can easily be the single largest component of the litigation or disputes budget in that case. It's just lawyers going through documents looking for evidence. We're able to leverage these modern technologies to reduce that by 30% or more. That reduces total project spend, which the legal department loves. It makes it much more predictable so they can have a fixed line item for what they're going to spend on these disputes. And it lets them get to the evidence and therefore, the settlement or other resolution of these disputes much more quickly than our competitors.

Got it. Thanks, Kiwi. I was wondering if you could talk a bit about maybe the key pain point or the moment for a lawyer when they look at your products. So where I'm going with this is I'm not a lawyer, I have no idea how these processes work. But I do make models. So when I think about my aha moment, if I had a tool that would -- I don't populate the historicals of financials, that's great, even better as an auto model function for the next 3 years of forecast. I mean -- so that was wonderful if someone could create that.

I don't know if the highest and best use would be selling it to you.

From a lawyer standpoint, when they look at your technology, is that key pain point, but also the future usage of that?

So there's been, but I'll give you actually what most people cite as a #1 wow moment they have is simply performance. So if you look at the old solutions, first, they were human-based. It's like going to a library. You call the librarian and they get you something. And then when you actually get to the tools that the were using you would type in a search and see a spinning wheel and these things, it was like the old dial-up Internet. So we take lawyers from that and give them Google, right? It's a simple search bar that they can use that has instantaneous performance regardless of the size of these data sets. That's normally the first wow moment. But then the continue, right? So if you look at DISCO AI, that's the system we use to learn what lawyers are looking for and automatically push to the top, the documents that are most likely to be Anthony case. So how does this work? Let's say you're going through documents, and you're just going chronologically. Maybe you find 8 or 9 good documents out of every 100 that you look at. That takes forever, and it makes the work monumentally boring, right? Because 90 out of every 100 documents you're looking at are completely useless to the case. By using our system to score the documents and push the good ones to the top, lawyers can find 85 or 90 out of every 100 documents they look at are what they're looking for are important. It both helps them get through these reviews more quickly, but it also makes the work engaging and important enough that senior lawyers, people who are actually paying for their judgment, right, can do this kind of work. There are many others, but I think that gives you some feel for what lawyers love.

Got it. Got it. Thanks, Kiwi. I'm going to ask you 1 more question, and then I wanted to open up to the floor for any investors out there to ask questions, too. If you do have questions, just raise your hand, I can call on you and they'll bring a mic to you for -- to get you on the transcript, too. So my next question kind of on the competitive landscape. We've done a fair amount of work within the Ediscovery space. It sounds like there's a bunch of legacy vendors there, a bunch of legal service vendors there but also some next-generation vendors there, too, that offer SaaS solutions. So just kind of wondering, from your view, what does the competitive landscape look like? How is it evolving? Do you continue to -- or do you believe it will continue to evolve in the future? I mean, what do you think about the landscape?

Sure. So the vast majority of our deals are still against the legacy services-based competitors. So that space is heavily fragmented. The largest 7 players are the big 4 accounting and audit firms, and then Epic, Consilio and Discovery, which are 3 private equity-backed relapse. Then there is a long tail of hundreds or perhaps thousands of local and regional services providers, all doing essentially the same thing. And that is by far the most common thing we compete with and the most common thing we displace. Relative -- so there are a couple of other companies seeking to do what we're doing, although I think we're the youngest of that group. And we have not really seen a huge change in how often they appear in our deals. I think over the last 2 years, we saw kind of an upward trend. And now if you look at our kind of competitor data, it's been relatively flat in terms of how often we see those folks. When we talk to customers, we most often hear there are 2 decisions being made. One is, are we going to make the switch to software instead of services, and kind of embedded in that is a switch to the cloud rather than to the on-prem tools that there's old service providers would have used. And then once they make the decision to go to the cloud, there's sort of 2 or 3 people DISCO being 1 of them, that they would look to as their potential new software-based in the cloud solution.

When your customers are thinking about that transition from on-prem services versus cloud, what is it that drives the decision to go to cloud from the customer view?

So number one is the impact -- it's the things I talked about, right? So it's the impact that using a solution like ours can have on reducing outside counsel spend on legal document review, we can take that down by 30% or more. That's the main kind of business side driver. What we are seeing more and more, though, are these kind of IT drivers. So in many companies, there is a kind of move to the cloud initiative. And DISCO is one very easy way that a legal department can contribute to that initiative because it's, in many cases, the largest but certainly one of the largest legal workloads. The second big driver is actually security. So if you look at the old services-based solutions, they involve taking enterprise data involved in legal disputes and downloading it to hard drives and then shipping the hard drives by FedEx to service provider. Then what happens to that data downstream is sort of there's no transparency to the legal department or to IT about what's going on with that data, who's touching it? Is it really being deleted and so on, as these matters progress. And often, it needs to be collected multiple times. So it will be downloaded from enterprise IT systems and exported to By comparison when these folks switch to DISCO, they get a single platform where enterprise data involved in legal matter sits. They have full auditability of that data and they can control access by permission, including to external parties that need access to that, whether that's law firms, whether it's expert witnesses or even the other side of a regulator.

Got it. Got it. SP1 If there's any questions from the audience right now. Just raise your hand and we'll get a mic to you. Any questions from the audience? We got 1 in the back corner there.

I had a quick one on -- so your sales motion is quite unique for -- relative to other software businesses. And you've also mentioned in the past you for or aim for kind of 12- to 18-month payback on SM investments. Given your investments are slightly different from however companies do it, would you mind walking us through what goes into the numerator and denominator there would be really helpful to just understand how you think about that?

Well, in terms of looking at the payback, that's pretty straightforward. So we take fully loaded and we compare it to growth in gross profit, and we seek to have growth in gross profit coverage every 12- to 18-month period. But maybe to -- so here's what's different about the DISCO model relative to other places. It's at, say, Workday, right? You invest a lot of S&M to land a subscription upfront. And then the cost of maintaining or renewing that subscription is a relatively small percentage of the aggregate S&M expenditures. DISCO is exactly the opposite, right? We try to make it very easy for customers to start out using our platform. Mike referenced fast sales cycles on average, our time from opportunity to close one is less than 45 days. But when we land an opportunity, we might be capturing only a single-digit percentage of the customer's mature spend. So for example, a customer might start out at $30,000 $40,000, $50,000, $60,000 in their first year, and the same customer 3 to 5 years later at maturity might be spending middle high 6 figures or low 7 figures just on the first product, right, that they're adopting. And then you'll cross-sell more products to them over time. So a consequence of that model, is that a ton of their sales and marketing energy goes not to getting the first land but to driving expansion within the customer organization and driving fils, introductions, right, moving through the highly networked legal industry from 1 legal department to a law firm, to other legal departments that use the law firm and so on. And also following humans as they move through their careers. So someone who might start out as fourth, fifth, sixth year associated at a law firm when they're using DISCO, then they take their first in-house counsel job, carry DISCO with them, then they switch companies, carry DISCO with them again. And so that I think is the biggest difference in how to think about our S&M.

Right. That makes that makes total sense. So -- and so the 12 to 18 months would be a blended across all the S&M efforts at every phase of that life cycle.

Exactly.

Got it. And would I be right in thinking that the initial land despite being small is that is a foot in the door. So maybe that's harder than -- like paybacks from there get better? Or...

Yes and no. Yes and no. Look, good analogies are maybe the AWS enterprise salesforce. So -- well, look, I don't have their numbers. But curious to me that many AWS lands involve very little S&M effort at all, right? They are just a handful of engineers sign up and put a workload in the cloud. And then that grows for a little bit. And then there was a ton of S&M investment to cross the gap between a handful of IT teams and the centralized IT adoption of AWS. So DISCO expansion is a lot like that. It's sort of how do we get our first set of people using the product in a new account. Well, maybe it's a referral from a friend they had a law school who used it somewhere else. And they said, okay, let's try it down. Or maybe it's -- they hired a new lawyer who had exposure to DISCO at a prior company, fired up and tried out. And then you'll see some initial expansion just in the kinds of workloads that, that person controls. And then our sales team will need to navigate the organization and figure out, okay, who else in this organization is making legal tech decisions, what problems do they have, what are the right DISCO solutions? How do we put together a path to capturing a bigger part of their spend?

Other questions? We got 1, right.

You talked about the wow moments and how it's kind of like a Google-like experience that sounds like a pretty enormous change in terms of how lawyers would be just operating and get you today are still a relatively small company growing very quickly. And so I would love to hear how you think about what the end points could look like for your business or for this sort of technology in general, other than just head down execution year after year? Like do you see there being either a motion, go-to-market or just something that catalyzes just more significant adoption? Or is this just over the course of 10 years, it's going to happen kind of a thing?

I wish there were silver bullets, and I'll be happy should we stumble on one, but where we're focused is not getting to some kind of magical tipping point, but it is day-to-day execution grinded out.

And I mean the 1 thing that I thought was interesting was you did acquire a services firm. And so I would love to hear a little bit about the thought process there. And how you see that playing out?

So I'm not quite sure what you're -- so the 1 acquisition we've done in our history is 2 products pulled out of a company called 360. So we acquired 2 software products hold and request.

Got it. Okay, maybe I had that wrong.

One thing I'll just follow up on your question. what I've noticed, and I used to be I'm a reformer, so I was a lawyer corporate layer many, many years ago, but litigators that I've talked to, particularly younger litigators and this is not necessarily a tipping point, but the world has kind of migrated to the cloud. If you look at pre-COVID and I would talk to law firms, there are some law firms that were like, we're not so sure about the cloud, and I've been in prior companies, where we weren't so sure about moving to the cloud. And so I think there's been a little bit of a tipping point there in terms of everyone is moving to the cloud for the most part. There are some exceptions. And I think for the lawyer users, and these are folks who didn't actually even know that I was CFO of the company that I have the opportunity to need, I would say, so how do you like DISCO versus X, Y, Z.? And this is a random conversation in an elevator that the CFO, and they're like, it is so intuitive. It's like using G Suite. So I think what's going on and not necessarily a tipping point, but as the users that are younger move into more senior positions at corporations, they go to clients. And quite frankly, they're also partner level folks that historically would pick the phone up and call the service provider to do the work they actually are in the platform doing the work themselves. It's kind of like using a kind of a lay person's analogy is the old fashioned way if you land in San Fran and you called the dispatcher to find out where your car is versus you can see it on your phone. You've got partners using it and then you have these younger lawyers that as they become more senior, they're just -- it won't be acceptable to do it the old way.

I got a question for you, Kiwi and Michael. When you're talking with your largest customers or the big enterprises out there that use your technology. You definitely mentioned a land-and-expand type motion. Maybe walk us through from the internal side of an enterprise, how does that kind of flywheel look like? One uses DISCO, they tell their buddies? Or is it a different type of process? I mean, like what does that look and feel like from an insight preview?

It's pretty much what you just said. So if you look at the legal department, there are kind of 3 common ways they get organized. One is like a law firm, so by area of law. And that is the simplest for us because typically, there will be a Deputy General Counsel who runs disputes. And that person all the people we would sell to will report into that person. And so it's picking off different categories of disputes and migrating them to the platform. The other common ways are by geography or by business unit, and that makes it require more navigation from our perspective, where we'll need to find out okay, here are the Deputy General Counsel, General Counsels, who are basically have a budget who are spending money dealing with disputes and need a legal tech solution. And we go hunt them down. We get 1 of them to start using the product. And then typically, what we'll do is partner with them to document the win. So document -- here is how switching to DISCO get the evidence quicker or help reduce their spend or make or spend more predictable or allowed us to visibility into what outside counsel are doing, prevented us from shipping data out the door and whatever they care about, we try to document that in marketing material. Of course, we try to get that to be publicly accessible. But even if we don't give that, we're generally successful at getting it to be internally usable, right, within their organization. And then we use that to go from that first person to the next first and the next person until we've aggregated the budget. So that's pretty common. I think if you look at other usage-based companies, how they would do it. The 1 thing that's unique to DISCO is the kind of highly networked nature of the legal industry. So in addition to going from one in-house lawyer to another in-house lawyer at the same company, you can go from the in-house lawyer to the outside law firm lawyer that is working on their matters. And then from that outside law firm lawyer to other in-house folks either at the same company or at other companies, that's 1 network way. And then the other way is the lay of mobility, right? So it's fairly common for a legal department to use, say, 3 or 4 law firms frequently and then hire some of those associates in-house, and that can be a way you spread internally. But in general, lawyer mobility is a carrier of DISCO.

I wanted to ask you kind of a question on the changing demographics of lawyers out there. When I think about lawyers, I think about big wood panel, lots of books and volumes of law, I don't know what are in those books, but that's what I think about in my mind. But clearly, clearly, the demographics are changing. I mean, does that -- is that a positive? Or is that a negative for something like a technology like DISCO?

It's a positive. Maybe I'm in the tipping point. I have a large wood panel and also I graduated from law shcool in 2004, I believe that is the last class to learn how to do these weird kinds of legal research manually in the books that we call it shepardizing in the books. People now, they do all their legal research in software in Westlaw Lexus. We're doing the same kind of transition for finding the evidence as Lexis and Westlaw did for finding the law. And I think Mike made this point. It's just -- it feels wholly unnatural for junior and mid-level lawyers today to pick up the phone and call someone who run a search, right? That's just -- that's weird for them. And we give them the exact experience they expect like, sit down in friend computer, here's a search bar and not just a search bar, but powerful visual analytics and AI that pushes Beckman to the top automatically and the ability to orchestrate and manage reviews all in a self-service intuitive way that speaks their language. I think it's pretty clear that, that's the future.

Got it. Got it. Maybe a question for Michael. Maybe for those in the room that aren't familiar with the revenue model. It is usage-based. But could you just kind of describe it a little bit, what are the components of it? How do you think about your revenue model? And I guess the big picture question is it is usage based. So what gives you confidence and visibility into kind of how you think about the future?

So Kiwi and I have been doing this together for almost 5 years, and it is usage based. And when I joined the business, I think my first couple of months, I said, hey, Kiwi, this is a bad move on my part, but we got over it. I said, hey, Kiwi, why don't we just sign up subscriptions for everyone? And he's like, Mike, that's a bad idea. And so the reason it's a usage-based model and how we kind of build the revenue model, it's because of the land and expand. When you sell -- and I've been on the other side of Workday and NetSuite and Salesforce. When you sell those solutions, it's a big implementation. The sales cycle takes 6 months. And in our approach, you can get into hypothetically major food franchise worldwide. And if you want to try to sell them a subscription that's kind of a long-term 3-year deal like a Workday, it's going to be a really long sales cycle, and you may never even get in the door. But if you're able to lock in with kind of 1 lawyer there through a connection, through just perseveres from cells, you can get in there and then expand that over time. And so we look at the business. There's 3 to 4 ways we look at revenue modeling. One is obviously related to the land and expand model. So we look at the cohorts of when customers came in, what's actually the dollar-based net retention by cohort. We also look at rep productivity, and we have that data going back many, many years. And then we run Monte-Carlo analysis on that. And then we also look at the funnel. So we're looking at the revenue model in 3 different ways. We triangulate it and then we project out. And Kiwi and I have been doing this for many, many years. We have discussed the concept, and I'm not going to talk about Q2 guidance or our annual guidance at this conference, but we have discussed historically, there is an inherent variability in our model. It's usage based. However, we do believe on a long-term basis our ability to forecast has actually been really good. And we are forecasting multiple ways. And our historical dollar-based net retention in this land and expand model has worked incredibly well. What we have seen in the revenue model, and we've talked about this on prior calls, we have seen a little bit faster, in some cases, on the expand side. I am CFO, I'm happy with that, but that does have an impact on the dollar-based net retention. So you could have situations where historically, we'd sign up that major international franchise. And then maybe a $50,000 customer, might be a small case on an annualized basis. And it may take them historically 3 to 5 years to become a 7-digit customer. We have seen more recently. It doesn't happen all the time, but it is happening way more frequently. Customers will sign up and literally become a 7-digit customer really quick in a matter of quarters. Part of that is because of the network effect. Sometimes, it may be a lawyer who is using us at X, Y, Z Corporation, move to a new tech company, did a single-source RFP. And literally in 2 to 3 quarters, they become a 7-digit customer. That's not a bad thing, but it does affect our usage-based business, but that's the reason for the land, basically, our usage-based model not really emphasizing subscriptions with customers and how we forecast revenue.

Got it. Thanks, Michael. We've got about 5 minutes left. So I just want to open it up to the floor again and see if there's any other questions from investors. We got one right there.

I appreciate the detail on the revenue model. Can you talk about when you pitch ROI to customers to show value, whether it's 6, 12, 18 months after an implementation. Can you talk about what the ROIs look like early, how they progress over time? And also what figures into that equation? Because I'm imagining -- again, I'm not an attorney myself, but you might be displacing younger junior associates if you're able to better leverage your existing human resources a senior partner through utilization of software tools like yours, where you can figure non-tech vendor costs, but human resource savings in as well to that ROI equation. If you could just give us a sense of that.

Sure. So it's actually relatively easy in our space because the legal function, it's probably the most outsourced function, right? So all of that human capital that we replaced is being built by the hour to our customer. And the ROI story is we reduce those bills by 30% or more. So if you have a typical customer, legal department, right, not a law firm, legal department may be spending $1 on Ediscovery before DISCO, and $3 to $5 on legal document review, lawyer's fees for legal document review. We will take the $1 and make it $1.10 or $1.20. So it's premium priced compared to what we replace. But we'll take the $3 to $5 and we'll reduce them by at least 30% in many cases more. And so that's the ROI story. It's fairly consistent.

A land and expand. I'm wondering if I use 1 of your services as you expand over time, does that 30% grow, 50, 60, et cetera?

No. So if you take a given product, right, it's a fairly consistent impact. It will grow in magnitude because you're using it across more legal workloads. So let's say, you're an enterprise and you have 200 active disputes at any given time, maybe you're starting out with 5 of that. Obviously, as you spread the use of our platform from 5 to 50 to 200, your -- the absolute value will grow, but the story doesn't.

Kiwi got about 2 minutes left, and I wanted to hit the question on leverage for growth here. So -- when you look at the product portfolio, you got your core Ediscovery, but you also have case builder and review. So how should we be...

Hold and request.

Hold and request. You got 5 products, right? So how do we think about the levers for growth? How are those new products ramping? I mean what does the whole platform look like today?

Well, let me answer levers for growth, but I'll hit on the product. So we view the #1 lever for growth as getting full S&M coverage of the market, right? So there are still very many large buyers of legal who we don't have selling relationships with today. And so we're aggressively building out all parts of the sales and marketing organization so that we can get in front of those folks, introduce them to DISCO and make the case for adopting legal technology to replace traditional services. That's the single biggest lever for growth. We believe it will result in continued new customer acquisition and accelerated growth of existing customers already in the base. Now number 2 is selling more products through the same distribution over time. And this is the key to amazing long-term leverage in our model, right? As we introduce product 2, 3, 4, 5, we can take a customer spend and multiply it by 2x, 3x or even more. And when we do that, we're spending very little in incremental S&M dollars because we're selling more products to the same buyers through the same distribution. We believe over time, we're going to continue to invest both organically and through M&A in building out the product portfolio, so that folks can do more kinds of legal work on our platform. And as a consequence, we can capture a growing percentage of their overall legal budgets. So that's lever #2. And lever number 3 is international, right? It's very early days for us, but we've seen some terrific growth and look forward to continuing to invest there.

Got it. Kiwi, Michael, we are all out of time. This has been wonderful. Thanks for presenting with me today.

Thank you very much.

Thank you. Bye.