Controller-Grade Valuation Sanity-Check
Law All-Day Platform (Standalone · v2)

§ 1 Scope & Methodology

1.1 What's being valued — current scale and what changed since 6/1

Law All-Day Platform v1.x — NY/NJ plaintiff PI + WC + immigration legal-operations platform. Inventory re-counted today from the working tree.

Scale (today, 2026-06-10)

SHIPPED in the 9-day window since 6/1 (v1.x additions)

PROPOSED but not yet code — durable design IP that moves the wedge

Brand assets & authorship paper trail

• Law All-Day (canonical wordmark) · Law All·Day (interpunct masthead) · Day Law Inc. · Counsel (in-platform AI, now wired via counsel-chat.js) · Quill (in-platform paralegal copilot, wired via copilot.js)
• Tagline: “The legal-operations platform for the modern plaintiff firm”
• Domains: lawallday.com · law-all-day.com · law-all-day-platform.pages.dev
• Palette: oxblood + brass + parchment
• Joe sole principal author / curator · CLAUDE.md 86KB dated changelog (2026-05-07 → present, +6KB since 6/1) · ~/Counsel/zane/ memo series · per-matter audit.jsonl · Cloudflare Pages deploy timestamps · all deps MIT except Documenso (AGPL, external service)

1.2 Destination entity

Unchanged from 6/1. Per LOI of 2026-05-28 (~/Counsel/llc-formations/law-all-day-legal-software/2026-05-28_law-all-day-legal-software_loi.docx): Law All Day Legal Software LLC, cap table 49% / 49% / 2% equity, 46% / 46% / 8% cashflow.

1.3 Industry-standard methodology

Per ASA + AICPA SSVS-1 + IRS RR 59-60 conventions, three approaches are run and triangulated: Cost (replacement / cost-to-recreate), Income (RFR + DCF), Market (precedent transactions in legal-tech). A CBV would then layer key-person, customer-concentration, co-founder-dependency, single-vendor-AI, and DLOM discounts.

§ 2 Cost Approach Replacement / Cost-to-Recreate

2.1 Inputs (unchanged from 6/1)

Loaded rate: $225/hr. NY/NJ metro senior full-stack engineer, legal-vertical familiarity, fully-loaded.
Productivity benchmark: 25–40 LOC/hr midpoint 32 LOC/hr.

2.2 Raw replacement cost

2.3 Adjustments

2.4 Cost approach range

Cost-approach midpoint has moved +63% since 6/1 ($646K → $1.05M), driven by ~42% LOC growth + complexity-premium bump + new architectural IP (Quill, MedChron, Counsel-chat, demo matter). This remains the floor for triangulation.

§ 3 Income Approach

3.1 Sub-method A — Relief-from-Royalty (RFR)

Royalty rate: 10% (unchanged).
Discount rate: 28% WACC (was 30% — slight de-risking because Quill + MedChron + Counsel-chat are shipped product surfaces now, not roadmap items, and a synthetic demo matter ratifies that the surfaces function end-to-end. Still pre-revenue, so the cut is modest.)

Projected addressable revenue Y2–Y5 (reasonable case)

Positioning wedge with MedChron baked in: $99–499/firm/mo unchanged from 6/1, but the MedChron wedge alone justifies the +10–15% bump — Eve charges $5K–$50K per catastrophic matter, so a $99–499/mo firm-wide subscription that includes nightly MedChron-grade trial-prep memos is structurally underpriced even at $499. LawAllDay still sits below Legora ($30K min ACV) and Harvey AI ($1–1.2K/lawyer/mo), capturing the ~95% of plaintiff PI / WC / immigration / foreclosure-defense / small-firm legal market that Legora and Harvey structurally cannot serve.

Royalty applied (10%): Y2 $26K → Y3 $108K → Y4 $270K → Y5 $550K; terminal flat $550K.

PV of royalty stream (28% WACC)

RFR range: $500K — $1.4M, midpoint ~$900K (was $400K — $1.1M, midpoint ~$720K at 6/1).

3.2 Sub-method B — Direct DCF (operator path)

Operating-margin ramp 5% Y2 → 27% Y5 (mature legal-tech vertical SaaS).

DCF range: $3.0M — $8.5M, midpoint ~$5.1M (was $2.5M — $7M, midpoint ~$4.2M at 6/1).

3.3 Income approach triangulation

§ 4 Market Approach

4.1 Comp set — public + private + medchron-specialist

4.2 Strategic-acquirer ranges

4.3 Pre-revenue private-deal floor

Typical pre-revenue strategic legal-tech IP acquisition: $2.5M — $9M, midpoint ~$5M.

4.4 Market approach concluded

$3M — $18M, reasonable midpoint ~$6–11M (was $3M — $15M, midpoint ~$5–9M at 6/1). The Eve-defensive scenario is the new high-end driver — Eve was acquired by LexisNexis specifically because medchron-as-a-trial-prep-pipeline is a defensible wedge; the Law All-Day MedChron Engine v1 (and especially the proposed Phases 1–6) puts the same wedge at $99–499/firm/mo. If LexisNexis reads the LawAllDay product roadmap correctly, defensive acquisition is plausible.

§ 5 Triangulation & Concluded Ranges

5.1 Discounts a CBV would apply

FMV range after CBV discounts: $2.0M — $3.5M (was $1.5M — $2.5M at 6/1).

5.2 Strategic-value premium

Strategic-value upside: $5M — $18M for the right buyer.

§ 6 Recommendations

6.1 Joe's IP contribution into Law All Day Legal Software LLC

Why this number:

• Sits at cost-approach concluded midpoint less ~20% conservatism — defensible by direct arithmetic
• Above $500K safe-harbor threshold → CBV signed memo required before LOI execution
• Conservative for tax: low capital account → high gain on hypothetical sale → no §721 phantom-basis risk
• Sensible baseline for the §83(b) Hurdle Amount calculation for DeJesus + Young profits interests
• Leaves headroom: if strategic offer lands at $5M–$18M, Joe's IP reads as “platform appreciated above basis,” not “inflated day-one anchor”

6.2 Cap-table arithmetic

Unchanged from 6/1. Per LOI (49% / 49% / 2% equity; 46/46/8 cashflow):

• Day-one entity capital structure = Joe's IP contribution ($850K) + DeJesus + Young services-or-cash contributions (TBD per founder discussion). Robert / CBV bakes into the LLC OA.
• Joe's 2% equity is separate from underlying IP valuation. At $5M entity → $100K; at $10M → $200K; at $18M defensive-acquirer scenario → $360K.
• Cashflow distribution (8% to Joe) remains the more material economic right per LOI Counsel Note 1.

6.3 Joe's strategic-options table

6.4 When to engage the CBV

REQUIRED engagement triggers (any one):

• LOI execution / Joe's IP contribution into LawAllDay LLC
• Any third-party offer requiring >$500K basis support
• Exit / sale within 12 months
• NEW 6/10: after Voice-Intake Phase A ships or after MedChron Phase 1 ships — both materially change the income-approach revenue thesis and the market-approach competitive comp set

§ 7 Caveats & Limits

1. NOT a CBV opinion. Norma is not credentialed to issue one. ASA / CBV signed memo required for $500K+ safe-harbor.
2. LOC growth needs CBV scrutiny. The +42% LOC delta over twelve days reflects genuine new modules (Quill ~700 LOC, MedChron ~890 LOC, Counsel-chat 780 LOC, case-valuation + case-cadence engines, expanded immigration suite) AND some commit churn (restructuring, generated artifacts). A CBV will likely apply Function Point Analysis or modified COCOMO II and may discount the raw LOC count by 10–20% to net of restructuring noise. The cost-approach midpoint here is robust to that adjustment because complexity-and-domain premiums do most of the work.
3. All revenue projections are hypothetical. Zero ARR today; LOI not yet executed. Income approach built on plausible licensing/operator narrative + Katrina's Legora-positioning + Eve / LexisNexis defensive scenario. CBV will stress-test more aggressively.
4. Key-person risk is real but mitigated further. Joe sole architect, but CLAUDE.md 86KB changelog (was 80KB at 6/1) + per-matter audit-log discipline + documented Quill / MedChron / Counsel architectural pattern reduce technology-transfer risk vs other e-suite assets.
5. Co-founder dependency. DeJesus + Young as commercial leads per LOI; their departure pre-execution would crater the commercialization thesis.
6. Anthropic dependency has grown. Quill (Observer + Suggester + Editor) + Counsel-chat + MedChron-Analysis + Mata gate all run on Anthropic Sonnet. Voice-Intake Phase A–C if shipped will add Deepgram + Twilio; Phase D adds OpenAI Realtime. CBV should price in single-vendor-AI risk somewhere between 8–12%.
7. AI-authorship copyright vulnerability per IP Plan §9.1. Thaler v. Perlmutter + USCO March 2023 policy mean AI-generated portions are NOT copyrightable; only Joe's selection / arrangement / prompt-engineering / cascade-architecture / paralegal-prose-template-design layer is. Buyer IP diligence will test this — particularly on the MedChron-Analysis 9-section memo template and Quill agent-prompt architecture.
8. Documenso AGPL dependency. Consumed as external service; creates a license-compliance obligation for any commercial deployment.
9. No directly comparable transactions exist for “NY-vertical small-firm plaintiff PI legal-ops platform with embedded Mata-gate + Culpable-Party + MedChron-Analysis + Quill copilot + Counsel-chat + cascade orchestration.” The Eve / LexisNexis defensive scenario is the closest direct competitive narrative.
10. Loaded rate is a single-point estimate. $225/hr conservative midpoint of $200–$300; results scale linearly.
11. LawAllDay LLC equity valuation ≠ IP valuation. This memo values the IP itself ($850K cost-anchored / $3.5–5M triangulated reasonable). Joe's 2% equity is a separate calculation.
12. Roadmap items are NOT in cost-anchor math. Voice-Intake Engine, MedChron Phases 1–6, and Quill agent-mode evolution are proposal-only at 6/10. They appear in income- and market-approach narrative only insofar as the competitive wedge is real and CBV-defensible today (MedChron v1 + Quill v1 already ship). When any of those phases land in code, re-cut this memo.
13. Synthetic demo matter caveat. Martinez v. Summit Grocery is curated synthetic — training-data-grade IP for demo / onboarding / buyer diligence, NOT a real client matter. The $36K synthetic-matter premium reflects controller view; a CBV may treat the same asset as $0–$15K and rely instead on live operational cascade + Quill / MedChron / Counsel surfaces.

§ 8 One-Line Bottom Line