The Great Divide Between Legal Tech Development and Legal Tech Use: a Plea for Empathy

Let me set out what I’m trying to achieve with this article: primarily, it is to build empathy between legal tech developers and legal tech users – help product developers/ designers gain some insight to the actual “nuts and bolts” of daily legal practice and how legal tech and the attempts to adopt it, impact that. This is real world stuff – what we go through in attempting to find technology solutions to address practice challenges, with a few stories and a case study to illustrate along the way!

Note: these issues are likely felt more in solo/ small firms attempting to adopt technology solutions: we don’t have the per-seat buying power to hold sway with technology companies and we don’t have the resources to pay for customization for our own purposes. We have to use platforms “out of the box”.

When I first started buying software, I quite simply felt like the proverbial kid in a candy store. Prior to launching what was to become Momentum Business Law, almost 7 years ago, I hadn’t really had any reason to ever purchase software that didn’t come pre-loaded on a computer, and pre-cloud it wasn’t very accessible from either a financial or skills perspective.

As a GenXer, I’ll be honest, I still marvel a bit at what we can do with technology and particularly with the internet and even more particularly, with the cloud. Also, note that I’m a particularly non-techie GenXer. I have a BA in criminology and registered for law school expecting to work in criminal law policy. WP5.1 was a step up from the family typewriter I used through high school, when the one family Amsted computer wasn’t available. I remember doing most of my research, even through law school, by card catalogue and books. Ok, by the time I started law school in 1998, we were discovering the benefits of Quicklaw and other online research tools, but tech, generally, remained at arms length to my practice until I started building Momentum Business Law.

I detail this (relatively new, still dewy-eyed) love affair with tech, and legal tech in particular, to soften the rest of what I want to detail here: the frustration that those of us “in the trenches” of running tech-enabled legal practices are still living with, in 2019.

I’m not going to pull punches here, but I also want to be clear that I’m not calling out any particular company. For the most part, I love the available products and I especially love the fact that innovators and designers care enough (and that there is market enough right now) for these products to be created at all. Where legal tech is still failing those of us applying it to practice, is, in my experience, two fold: narrow product design and integration. I’ll return to those two points after we explore the use cases of legal tech at Momentum.

To give you an idea of how this problem can play out in the “real world” of a corporate practice, I would like you to consider this example from early in Momentum’s life:

We were closing a somewhat complex transaction for a client selling the shares of their company. Here is a summary of the software which we were using to manage this transaction over several months:

·      Fast Company: The company had multiple shareholders, so we had all data regarding those shareholders and their shareholdings entered into our then-entity management software (Fast Company – more on that later!) to ensure the accuracy of the corporate records. Horribly, this was the one piece of software we used which was not in the cloud, and we had the product residing on backed up desktop computers.

·      CapShare: To enable company management access to this very important shareholder information, we utilized a US based software called CapShare – effectively an excel spreadsheet in the Cloud which management, the accounting team and eventually “due diligence” could flow information out from. See excel spreadsheets below – fine, but not dynamic enough and subject to data entry errors – not always accessible in real-time.

·      Internal Files: For our own purposes, we also maintained all of this data on an internal excel spreadsheet upon which we had different datapoints than CapShare would allow – all stored in the client files in Sharepoint.

·      Lexicata (since bought by Clio): Shareholder communication, including rights of first refusal options, votes on the transaction etc. were initially largely managed through Lexicata – the shareholder data was in that product because of earlier investment round communications and Lexicata’s platform providing for preset forms, emails etc. made this a fairly efficient communication tool.

I’ll pause here for a moment – we aren’t done with the story yet, but I want to make sure that you realize that at this point we have entered the same information (shareholder info) into FOUR different platforms – all because they had their own specific use case for us.

Returning to the transaction software:

·      Doxly: Early on we were excited to be using a then fairly new and still relatively untested platform called Doxly. We loved what they were trying to do with the platform: integrate datarooms with closing rooms, but unfortunately the platform wasn’t, at that time, bug-free enough for us to confidently use it with our clients and other counsel. I believe that we used the dataroom function but then transitioned off of the software for the balance of the transaction. Note: very much looking forward to going back and trying Doxly again!

·      Closing Folders: We replaced Doxly with Closing Folders – at the time also somewhat new, but a well developed platform which was fairly intuitive – a key selling point for both clients and other counsel or the platform will be avoided. Note: we’re currently in the middle of transitioning from Closing Folders to Deal Closer as a result of a Clio integration – important to the discussion which follows!

·      Docusign – Lexicata has limitations in terms of certain functions (primary relevance here was the number of signatories on documents) – Docusign integrates with Closing Folders but there were other uses we had outside of the Closing Folders platform for sending for signature directly through Docusign.

·      Trello – At the time we were making fairly extensive use of Trello to manage workflows. Clio’s “task” function at the time (and continues to this day) was a weakness and doesn’t allow for organization of tasks, subtasks etc. As well, we could theoretically assign tasks to our clients and their team, but they would have had to be actively engage with Clio and that wasn’t happening. A Trello board to allocate workflow and tasks and give everyone a birds-eye view of the transaction closing was our idea to manage both internally and with the client.

·      Clio – of course throughout this process we were using the client/ matter management pieces which Clio excels at.

All of these platforms served a purpose and each one did its task relatively well and generally as advertised. The end goal: always to deliver what the client needs; efficiently, accurately and as smoothly as possible. We did that: the transaction was closed, every applicable document signed and delivered, client happy, legal duties executed on. Counsel on the other side of the transaction participated in the platforms as required, client signed into … exactly zero platforms. We had duplicate data entry at every turn; and didn’t find, for the most part, efficiencies in having the client be able to easily and seamlessly access deal information without needing to request it from us.

It was absolutely an improvement upon how I spent my formative legal years closing transactions (boardrooms full of paper, dazed associates collating, checking signatures etc), but often times we felt like hamsters in wheels, not realizing the efficiencies we thought we were building into our practice – and feel that even more so with hindsight.

Legal tech has two potential users: clients and legal teams. Let’s take look at both of these.

Clients:

As I’m known to repeat over and over, we have discovered that the overwhelming majority of clients will sign into ONE product in order to do business with us. Some will not even do that, until pressed to do so – or even if pressed to do so as noted in my transaction example above. We get it – it is easy to be tech-exhausted at times and to resist yet another login/ password/ adjustment to a new platform.

What that means, very critically for legal tech developers, is that the tool you build, if it is intended to be used by our clients, must either be the ONLY tool we are using with them, or it needs to integrate seamlessly into another tool we are already using. If your tool selling point is that our client will have all sorts of important data at their fingertips, that is only a selling point for me if my clients will use it. Otherwise I’ve spent time and money on a platform which isn’t achieving as it is designed to. CapShare, discussed above, is a good example of this: besides some minimal use by the company accountant and CFO, it wasn’t a tool which was worth our time to set up, although its minimal cost meant that it was largely just a time cost.

Legal Team:

If your legal tech use case is that it be used internally by our team, there are different considerations. Our team members can and do utilize multiple platforms, but even they can have tech exhaustion, particularly if the tech doesn’t provide either increased efficiency, accuracy or an improved team experience.

A key factor here is repetitive data entry. Above I note that we were entering data about shareholders in four different places in that particular transaction. Even with files where we aren’t utilizing CapShare, we have/had at least three data entry points for each shareholder for every single corporation client we have. I’m sure I don’t have to describe to you the displeasure that this has caused me – time waste and opportunity for errors – enough to keep me up at night! We have recently come far down the road towards remedying this particular issue, and it is my case study I provide below.

This makes it an *extremely* compelling case if your legal tech product is either broad enough in application to replace one or more other products currently in use, OR integrates with other legal tech products we use and can transfer data to these other platforms, either directly or through tools like Zapier. It is extremely difficult to make a case to our team to adopt a new product if it will not reduce workload or improve an existing platform or process.

Case study – Corporate Minute Books:

To bring all these thoughts together, let me walk you through a project which we have been working our way through over the past year+.  Although we use and continue to try software which plays a role in much larger and complex pieces of our practice, corporate information and the ability to use that information for record keeping is core to any corporate client. Of some import, I think, to the innovation question in this space is that corporate records and minute books has traditionally been the space of law clerks – lawyers driving innovation in most traditional legal spaces wouldn’t have necessarily turned their minds to Minute Books, as there would be little vision into how inefficient this key piece of corporate practice was.

Look back at my story above re the shareholder information we need to access and use for a transaction, and our use of software called Fast Company, by DoProcess. Our key shareholder data was held in a product which looks and feels like it hasn’t been updated since the 80s – for those reading this outside of Ontario/ Canada, do not mistake this for any relation to Fast Company the media outlet – they couldn’t be further from each other. It is not cloud, and despite our questions to DoProcess for at least 4 years now, they have not transitioned the product there. Simply put, it is painful to use, but until extremely recently, there were few alternatives for recording and maintaining this information.

Important to one of the themes of this article, Fast Company maintains not only shareholder information, but also Board of Directors information (as well as other corporate information) and can generate simple corporate documents using pre-set templates which come with the product. Importantly, Fast Company is, at its core, a database of all corporate information. Simply replicating that information in Word and Excel files wasn’t enough – we needed to replace the database function as well, and have that information at our fingertips. Remember – “fingertips” with Fast Company meant an office-based single computer and back up – only accessible to the whole team by remote-desktoping in, not simply signing into a cloud platform.

As we looked to replace Fast Company, we knew that we needed to address all of these pieces, and ideally make this critical information available to our corporate clients on demand. It is not uncommon for a request to come from the client, accountant, banker or other party, for a particular record or document. If we could put that information at our client’s fingertips, they could minimize the time of requesting and we would operate more efficiently with them, dealing with only more complex information requests.

Our initial enthusiasm over CapShare (discussed above) as a piece of our puzzle, waned as we realized that their focus on US reports and compliance didn’t assist us much, that the platform was limited in certain ways which were important to us and also because it wasn’t really intended to be a full communications platform with shareholders. We reverted back to Lexicata as our main focus of client shareholder communications. An important feature, as we evolved in ways to incorporate Clio more into our practice, is that much of the information contained in Lexicata (including executed documents) are very easily exported over to Clio.

To address our “Board” communications issues, we have been enthusiastic about an Ottawa-based company, Board Space. We have trialed the software and even used it with non-profits we are involved with. It is a great, comprehensive platform, designed primarily with condo corporations and NFPs in mind. The bottom line for our adoption of it for our clients touches on both themes of this article: it solves too narrow of a problem for us in this space, and doesn’t integrate with other, related (from our perspective and use) software.

The final piece in setting the stage for the following discussion of the “alternatives” is that, in January 2018, we made the decision to go fully digital with our Minute Book storage – no more hard copy corporate minute books would be created at Momentum: if a client preferred a hard copy they could download and keep at their site. As part of this transition, we decided to, at least on an interim basis, store all digital Minute Books in Clio, shared with the client and accountant, backed up with a copy in our digital storage.

Another factor of import is that the adoption of each platform also of course adds another cost for each client, to a service which is relatively low-cost. Our current base-level corporate management fee is $500/ year – adding another $100-$200 per year in software fees (or absorbing them ourselves, thereby reducing the fee allocated to the human element) isn’t feasible at this stage.

SIDENOTE YES, we have indeed put this much thought and effort (and I’m writing such a long article!) on something which we charge clients a base of $500/ year for. This level of attention to details is part of what #makinglawbetter is all about – and where smaller firms can help drive the discussion forward – the need for efficiency, accuracy and integration has an outsized importance to us.

That brings us, finally, to a discussion of the alternatives we have examined/ adopted! Honestly, I can say that while this particular decision has been at times frustrating and has taken much longer than expected (and is really still evolving) it is one of the most intriguing processes we have gone through.

Given the core function this software plays in a corporate practice and the relatively low cost that the software must bring with it, it isn’t surprising that it has taken some time for there to be competitors in the space. We are thrilled that there are choices now, in Canada/ Ontario, in this space and I want to very genuinely enthusiastically endorse each of the options I’m going to describe below. The strengths and weaknesses I identify relate to Momentum’s practice, and each option should be thoroughly investigated by a practitioner looking at this issue. I’m excited by where each of these products will go and how they will develop.

I introduce you to 3 different software providers in this space – and invite each of you to comment/ correct me on any and all points you would like/ updates – this is the story of our Momentum experience, not by any means a full and fair telling of your story:

·      Athennian (formerly Paper)

Spoiler, Athennian is the product we have chosen, at least in the capacity which I’ll describe here. We have been enthusiastic supporters of Athennian for the past few years, predating even the focus on “entity management” – a term which really gets to the heart of the database role which corporate information plays – putting that information into the hands of the client and professionals working with them.

Athennian started out as “Paper” and was initially focused primarily on document automation and providing a platform for entities and law firms working with them to have digital management of their core documents – promoting collaboration within the team. As I understand it, Athennian (the name change reflects the focus on “team”) was motivated by the cacophony of complaints from us, and firms like us, to “fix” the entity management software options. As we spoke with Athennian about our goal to have all of our corporate documents able to generate out of their platform, we highlighted the issue of needing to draw information for completing those documents from a database of information about that entity – so Athennian decided to solve this issue, using the strength of their existing platform as a launching point. Apologies to the good folks at Athennian for my over-simplification!

Initially, the adoption of the platform for full entity management was a bit challenging for a smaller firm like ours as there weren’t pre-populated template documents coded in – this has since been rectified and we’ve worked with the team to further code our own templates. A big advantage which Athennian has is the ability to code your own documents – meaning that you aren’t restricted in terms of the provided templates. The team has added support in this capacity and has even built a Word plugin Athennian Coding Assistant.

In terms of the database function, Athennian is the most sophisticated and built out of the products.  It isn’t plug-and-play perhaps as much as something like Fast Company, which for a small firm with few resources and not a ton of technical ability/ comfort, can be a barrier. However, for a product at the young age which it is, it is comprehensive and impressive. Their sales focus is at the large-entity level: large law and accounting firms etc. We still think it is a great product for our firm, given our existing use, and our route for expansion at our firm and some of our service offerings. However, it might not be the choice for the average small firm looking to transition off of Fast Company or one of the other legacy alternatives.

·      MinuteBox

A newer entrant in this space, MinuteBox comes out of the Ryerson’s LIZ. With the announcement this week of their acquisition of “Conductor”, a document generation platform, it is clear that Minute Box is moving in the right direction to evolve their product and compete at scale in this space.

Given this new development, I’ll restrict my comments generally to my initial thoughts on the product and let the company speak to their future plans as they evolve. The really interesting piece for MinuteBox was their alignment with what we are all extremely used to with physical minute books – there is a flow to the information and organization which is extremely intuitive – which has a LOT of value to clients, legal teams and accounting teams. The vast majority of Canadian corporations are fairly simply organized, with limited changes each year – a platform which makes the access to information intuitive, familiar and easy has a lot going for it.

As MinuteBox evolves further, I expect that they will be a key player in this space, particularly as a replacement for Fast Company and as a primary option for smaller firms and entities.

·      Founded

Founded is a great option in this space as well, although it was initially designed to serve clients directly, not law firms. I’ve been following Founded since it’s days initially as “Law Scout” – offering a completely virtual option for Ontario companies across a range of common legal business documents and contracts.

SIDENOTE - I’ll flag here that I continue to be a bit uncomfortable with the blurry lines between “legal information” (which non-law firms are allowed to provide to the public) and “legal advice” (the exclusive domain of legal counsel). At Momentum we have embraced the virtual delivery of services and limited scope work, even going so far as to launch our own “DIY legal documents” site, Gain Momentum, in 2016 (more on that in another post – it is not currently live, but in the process of being revived!). Non-law firms, even those founded by lawyers, in my opinion, are stepping increasingly close to the line of legal advice … but again that discussion is for another post. I know Founded has turned their minds to this and participates in discussions with the Law Society of Ontario on these issues as well.

Founded has a great client-centered platform, a great UI and some great tech regarding integrations for filings. It has a great role to play in the space, but as I’ve told them, I’m not convinced it works as a solution for a law firm, particularly a small one – at least not yet. The ability to use your own templates and easily create new ones wasn’t yet live in the winter when we were looking at it (it may be an option now). When using the platform, it was easy for your client to identify that you were using Founded’s platform, and I was told there was no plan to change this. That’s fine, except that, particularly at a small firm, they are in some ways directly competing with the firm for work. The platform also hadn’t yet been really customized for the law firm side, meaning that the lawyer side had to act initially as it if was a client – fine to work around but a little odd at first glance.

Kudos to Founded for some great partnerships with larger firms and also for powering RBC’s Ownr (self-incorporation) platform. Founded is another important player in this space and I’m excited to see where they go with their platform and look at ways to work with them in the future.

The Big Missing Link:  Integration

So, three great Canadian options addressing a similar issue and providing a solution which speaks to a certain aspect of the market. Unfortunately for our purposes, there is one big hole which all three have – a lack of integration with other products. In our case, this primarily means Clio.

Remember that I mentioned we had decided, in January of 2018, to move all of our digital Minute Books into Clio and from there share with our clients and their other professional teams. Remember also that I mentioned that experience tells us that clients will sign into a grand total of ONE platform in order to do business with us. This means that if we want to use Clio to its full capacity with our clients, which we have chosen to do, we can’t be shipping our clients off also to a second platform in order to access their corporate Minute Book or other records.

Clio allows us to share accounts, calendars, tasks and more with our clients. All information regarding our relationships with our clients is in Clio – it is the hub of our practice. So, that means, if we want to store our all important database of important corporate information regarding each client in a different platform, we have to do data input at least twice, download and move over files from one platform to another. This isn’t an ideal solution for us and isn’t a move in the right direction of efficiency.

For this reason, a good portion of our corporate management has transitioned over completely to Clio – we have created that database function within Clio itself, making the core corporate information available at our fingertips in the platform within which we do most of our work. It is a bit cumbersome – we have to create dozens of custom fields and dozens of custom field sets, along with dozens of different versions of coded documents for core records and documents. It isn’t ideal, but it is the best solution for a good chunk of our corporate records.

The balance of our companies, and the Corporate Records Management offering which we are currently building out, is a perfect fit for Athennian’s robust platform: database as well as documents.

I hold out hope that one of the players in this space will build a full Clio integration in the very near future, or even better, that Clio will buy up one of these players (Hint, Hint Clio!).

My Corporate Entity Management Wish List:

My full wish list for entity management is as follows:

-Full Clio Integration!

-Full incorporation integration: each of these products is pushing hard to integrate into the various Provincial corporate records systems across the country, as well as the Federal system. I’ll take this opportunity to complain loudly, to anyone who is listening, about the antiquated system in Ontario and duopoly on access to it granted to select companies – I live for the day when we have a government in Ontario who might care about this!

-Virtual Meeting integration – both Board and Shareholder integration: this one will undoubtedly not be realized until well into the future, but we also lack access to good virtual meeting tools which are built for corporate meetings to accommodate voting records, materials distribution etc. I would *love* to see this built into entity management platforms.

Conclusions:

Ok – if you are still reading (and legal tech developers, I hope you are!) what is the point of this extremely long look into the internal Momentum processes and insight into our tech selection process? Hopefully I’ve achieved two things here:

First, to emphasize that you need to consider integration with other products as a very high priority in product design. No matter how great your product is, if it is a product which is designed to be used by our clients, it likely wont be and if we have to duplicate data entry or other efforts, it is going to be a difficult sell.

Second, while I have complete empathy for you and the development process, MVP etc, we also need you to have empathy for us in terms of tech overload and the volume of different products which we need to use if each and every product has a very narrow application to our workflow. Complaints abound about the slow uptake of lawyers to tech, and this is one of the reasons – if we can’t deliver on efficient, accurate, timely workflows to our client, it is extremely hard to innovate. My software bill each month feels like death by a thousand small cuts, and I’m still spinning my wheels to export data from one product to another. We’ve come a LONG way, but there is so much further to go – product integration and broad design factors will both enable us legal practitioners to work more closely with the product designers and together, we will #makelawbetter.

WHAT’S NEXT?  A current project has us deep in the weeds on contract management/ automation software. I will try write about this investigation in real-time, mostly to lean on those of you in cyber-law land for your input!

Your Input: Legal Tech developers and lawyers alike – share your thoughts on the issues I’ve raised here – let’s have a discussion and move to #makelawbetter together!