LegalShore Reaches First Year Anniversary as Exclusive Provider of SaaS Compliance Tool to Attorneys, HR Consultants

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LegalShore, a California-based startup, reached its first year anniversary in December 2006. The company provides "SaaS" or "Software-as-a-Service" employment law compliance technology directly to attorneys and human resources consultants.

SaaS 2.0: Seven Key Software-as-a-Service Trends

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LegalShore has reached its first year anniversary. The California-based startup provides SaaS, or "Software-as-a-Service" technology directly to attorneys and human resources professionals.

One year ago, attorneys and human resources consultants had limited ability to obtain software to manage their clients' employment law compliance issues online. The primary option available to these professionals was to invest in the technology themselves, at great time and expense. As a result, virtually no attorneys or consultants were providing online services to their clients. Small businesses unable to afford a company intranet were left in the lurch, with few options other than traditional, cumbersome paper handbooks and forms.    

Enter LegalShore. Founded in December 2005 by Spencer Hamer, an employment attorney based in Los Angeles, and Scott Pietro, a former business executive based in Livermore, California, the company provides employment law compliance software -- Flexpoint -- that can be managed by professionals, while simultaneously being accessed by companies and their employees.

One attorney who adopted the software saw his client base increase by 300% in six months. And end users have been pleased with the service. Mary Ellen Kordas, Executive Director of the largest single site Montessori School west of the Mississippi, located in Livermore, California, was approached in August by her attorney with the Flexpoint system. "The system allowed us to take our employee handbook and forms and put them online, where all the teachers could access them 24/7," says Kordas. "This saved us a lot of time during the start of the new school season, when we would normally have been updating our policies, contracts, and forms and distributing them out by hand."

LegalShore's product is part of the growing SaaS industry. Tier1 Research, an independent research firm that analyzes the financial and industry implications of developments affecting companies within the IT, communications and Internet sectors, recently issued a report on the SaaS market entitled "Software as a Service Series Report 1: Introduction to SaaS." In the report, Michael Mankowski, Senior Vice President with Tier1, states, "Companies have long struggled with IT being a cost center, but as the Generation X population now takes over the helm of many small and medium-sized enterprises, the leadership of a firm - not just the IT department - is often technologically savvy and more comfortable with technology. The consequence is that while SaaS companies are coming to market, they are finding prospective customers who recognize the value in a SaaS service."

In 2004, customers spent more than $4.2 billion worldwide on software delivered via SaaS. Customer spending is expected to increase at a 21% compound annual growth rate, reaching $10.7 billion in 2009. Smaller businesses with fewer than 100 employees have been slower to latch on to Web-based solutions, with 21% currently using hosted or on-demand applications for Human Resources. But a recent study by Saugatuck Technology entitled "SaaS 2.0: Seven Key Software-as-a-Service Trends," found that small and mid-sized businesses are now nearly twice as likely to commit to SaaS as are large enterprises. According to Bill McNee, co-author of the Saugatuck report, the new generation of SaaS is about "helping users transform their business workflow and processes, and the way they do business."

For Mark Stailey, a Principal at Ascend Strategic Partners, an investment banking firm based in San Ramon, California, taking the company's policies online was an easy decision. While working for a previous employer, Stailey had retained an HR consultant to provide his company with an employee handbook. But after six months, the consultant told Stailey that the handbook was still being updated. "It was ridiculous," says Stailey. Stailey believes the enhanced communications that result from the online approach are consistent with his company's values.    

Scott Pietro, co-founder of LegalShore, anticipates expanded growth for the company in 2007. "Most employers are overwhelmed with tasks related to their core business. They want to comply with employment laws, but often don't have time, and are afraid of spending lots of money on lawyers or consultants. A web-hosted software system managed by a professional saves them money, improves communications, and reduces their lawsuit exposure."

For additional information on the news that is the subject matter of this release, or for a demonstration of the Flexpoint system, contact Spencer Hamer or visit


Spencer Hamer


LegalShore, LLC

12100 Wilshire Blvd., Suite 800

Los Angeles, CA 90025


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