5 minutes with… Nicholas d’Adhemar, Apperio

The Drawdown (TDD): What were the reasons for creating Apperio?

Nicholas d’Adhemar (NDA): I created Apperio because it was a problem I had experienced first hand from my time as a lawyer and also working within a private equity firm.

One repetitive experience I had was working for a fund that invested in large, renewable infrastructure projects across Europe. Every deal we did, and the deals we didn’t complete, followed a similar pattern. We’d instruct the law firm at the outset of the deal, they’d give us an estimate for how much it would cost. Towards the end of completion or just after, we’d get a call from the law firm saying, ‘I know we said it would cost X, but we’ve racked up Y on the clock because of a number of additional complications.’ This caused problems in terms of managing expectations of the partners, issues with the investment committee and friction between the fund and the law firm.

Many in-house legal and finance teams still don’t have any real grasp or access to their legal spend data. They use spreadsheets to try and track it all, or an old school billing tool. Through the Apperio platform, we give those teams real-time data on their legal spend across all their law firms on every deal they do. They are able to see all the time on the clock before the invoice, the invoices themselves, run analytics and trends on legal spend, as well as monitor the performance of their law firms through KPIs.

TDD: How does Apperio make life easier for CFOs/COOs of PE firms?

NDA: With ever-increasing scrutiny over how clients’ funds are spent, Apperio helps PE firms to simultaneously manage multiple law firms and large projects, track day-to-day legal spend against budgets, improve the efficiency of their team and spend, and safeguard regulatory compliance.

A private equity CFO doesn’t have any real visibility of what is one of the firm’s largest external expenses. Not being able to accurately forecast or predict what you’re going to spend, the impacts on a deal-by-deal basis in terms of IRR and the impacts on relationships with law firms, not to mention increasing regulatory requirements, is difficult. Firms need to be able to show regulators, whether it’s the FCA or the SEC, for example, that they treat LP capital in the same way as the firm treats its own; whether they’re doing deals of a transactional or operational nature.

Having that data gives firms the opportunity to make more strategic decisions. That could mean using one law firm over another. Law firms are, on average, 400% more likely to record individual minutes as opposed to rounded up whole numbers when Apperio is switched on. It’s a very clear audit trail that satisfies regulatory requirements, and it gives firms the ability to demonstrate to LPs that they’re safe stewards of their capital.

TDD: In 2018 you picked up $10m in a series A funding round led by Draper Esprit. In what ways has your firm grown since?

NDA: From a people perspective, we’ve grown from 15 employees to 40. From a revenue point of view, we’ve grown 100% year-on-year since then. We’ve also grown from a customer perspective. This is a direct result of us gaining a better understanding of the issues facing our clients day-to-day and doubling down on the needs of PE and investment firms.

TDD: Other than expanding your sales operation into the US, what other expansion plans are on the horizon for the firm, and the platform itself?

NDA: In terms of our platform, the product is never finished. It’s a continual iterative process. Any good SaaS tool is never complete because you’re focused on the value it’s providing and finding additional ways to provide value to your clients.

One thing we’ve recently released with our PE clients in mind, is a single view from which they can see multiple deals in one place. While Apperio provides a single view of everything a firm does in terms of individual deals, PE firms want a project view so they can curate and see individual transactions, which are part of a greater single deal, in one single view. Another project was having the ability to store a PDF invoice within Apperio rather than just a digital version. A lot of our roadmap and development is driven by the feedback we get from our clients about what they need.

In addition, we have recently launched a partnership program for law firms, to help them share spend data with their clients using the Apperio platform. This will strengthen law firm/client relationships by proving their innovation credentials and providing complete transparency over accrued and historic legal spend.

TDD: What are you focused on over the next 12 months?

NDA: The US is a big focus for us over the next 12 months and we already have some presence there. Both in terms of PE clients using our platform, and our technology being integrated into many of the largest US law firms.

Of course, the next year will also be very interesting to see how everyone is working in relation to the Coronavirus crisis, the impacts that has had and what the landscape looks like beyond that.

Covid-19 has meant businesses are more focused on costs than they ever have been. We’ve got the ability to provide clients with an automated spending solution that can provide them with real-time results of their current state of legal spend, as well as historic data so they can build trends. The pandemic has effectively crammed five to 10 years of digital transformation into three months, it’s fast-tracked everything.