Vertical SaaS, fintech, and the power of partnerships: Lessons from Clio and Pipe

Vertical SaaS companies face a unique challenge: how to expand financial services while staying focused on the core business. The decisions they make—what to build, buy, or partner on—can define their ability to scale, serve customers, and maintain a competitive edge. 

This post continues our blog series based on conversations from the Fintech Takes podcast, hosted by Alex Johnson and Pipe CEO Luke Voiles. In this installment, inspired by a conversation between Alex, Luke, and Clio VP of Payments & Financial Services AJ Axelrod, we explore how Clio approaches this challenge in the legal industry and what lessons other vertical SaaS companies can take from their journey.

Understanding your customers’ pain points

Attorneys excel at practicing the law. Most aren’t trained in accounting or payments management, which can create friction in everyday operations. The power of vertical software like Clio lies in helping companies handle the range of tasks outside their wheelhouse, as well as those specific to their field.  

Vertical SaaS succeeds when it tackles both universal and vertical-specific problems. As AJ explains:

“Vertical SaaS is like, 80% the same, 20% different. The hardest parts of running a business—people, workflows, mandatory tasks like paying taxes—aren’t that different. But the nuances of your vertical are where you get to differentiate.” 

By identifying these critical vertical-specific pain points, companies can focus on where they can truly add value. As Luke notes:

“Attorneys… most of them really don’t understand math that well. And that’s probably why they went to law school in the first place. I can only say that because I went to law school too… to be able to help them with the problems that they need the most help with, is magical.”

For Clio, the “magic” lies in translating these complex legal accounting and trust account rules into systems that make tasks like filing taxes and managing payments seamless. The ultimate goal is clear: freeing SMB owners to focus on clients and spend more time with their families and their real lives rather than administrative headaches.

Choosing when to build, buy, or partner

Just like their customers, software companies have specialties. One of the most strategic decisions for vertical SaaS is whether to build new features and tools in-house, buy existing solutions, or partner with other companies. These choices are rarely one-off; they evolve over a company’s lifecycle. And each time they come up, the answer determines how much a team can focus on their specialty

Clio’s approach illustrates this continuum. Initially, they relied on partner integrations to offer payment functionality quickly. As they scaled and the complexity of workflows grew, they moved more capabilities in-house. 

AJ emphasizes that these decisions are guided by multiple factors:

• Customer need and experience: Does the capability solve a critical workflow problem?

• Right to win: Do you have proprietary knowledge or data that gives a defensible advantage?

• Scale and economics: Does internalizing the capability improve outcomes at scale?

• Regulatory and contractual constraints: Are there legal or partnership limitations that affect flexibility?

Building the fintech stack

Clio’s payments journey demonstrates how vertical SaaS companies operationalize the build/buy/partner philosophy. Clio Payments now serves tens of thousands of customers and processes hundreds of millions of dollars per month:

“Law firms can accept credit, debit, bank transfers, Apple Pay, Google Pay, QR code payments, tap to pay, text to pay… it should not be hard to get paid in law.” - AJ

Beyond payments, Clio integrates these workflows with legal-specific accounting, ensuring that billing, payments, and ledger entries align with the nuances of trust accounts. This approach extends to other financial services—lending, insurance, payroll—evaluated through the same lens: what to build versus what to partner on.

“If you have a proprietary workflow or data… that gives you a right to win… you start thinking about what you might build versus what you partner on.” - AJ

Luke reinforces that vertical SaaS companies often succeed when they own the hardest, most differentiating parts of the business, while leveraging partnerships to accelerate growth in other areas.

Partnerships as a strategic lever

Partnerships are not simply vendor relationships; They’re extensions of the company. Alignment on values, goals, and customer outcomes is critical. AJ explains:

“You need to be aligned on values, goals, and really serving customers well… if a partner says something to you like ‘that doesn’t work for me,’ that’s not a partnership.”

Technical architecture also matters. Vertical SaaS companies benefit from orchestration layers that allow them to swap partners quickly, ensuring a seamless customer experience. Luke notes:

“You actually have to build an orchestration layer type of business, where you can hot swap partners very quickly… allowing you to grow across geos, which kind of changes the game.”

Even small contractual details, like exclusivity clauses or renewal timing, can dramatically impact flexibility, customer outcomes, and long-term company value.

Key takeaways for vertical SaaS leaders

1. Understand universal vs. vertical-specific pain points: Invest in the 20% of solutions that truly differentiate your product.

2. Use a lifecycle approach to build/buy/partner decisions: Start with partnerships, scale thoughtfully, and internalize capabilities when it maximizes outcomes.

3. Own the hard problems, partner on the rest: Focus internal resources on areas with a defensible advantage; use partners to accelerate speed, coverage, and risk management.

4. Treat partnerships as extensions of your company: Alignment on values, goals, and flexibility is as important as pricing.

5. Plan for orchestration and contracts early: Avoid rigid agreements and build the ability to swap partners easily.

Vertical SaaS and embedded finance are complex, but thoughtful build/buy/partner strategies, combined with a relentless focus on the customer, can turn complexity into a clear competitive advantage.