The future of legal services technologies: marketplaces and platforms
A Q&A with Yarris CEO Ian Goddard
Law is one of the last professions yet to fully benefit from the transformative effects of advances in technology. Yarris CEO Ian Goddard tells us more.
The legal services market continues to gradually evolve, but law remains one of the few sectors that is yet to take full advantage of the transformative nature of technological developments. However, this is already beginning to change.
Ian Goddard, CEO at Yarris, took the time to tell us more about the legal services technology landscape, the potential developments on the horizon and the ways in which the organisation’s systems can help drive performance.
Could you explain some of the current trends that are occurring in legal services technology?
The best place to start is probably to examine what is causing the current trends in legal services technology. I believe there are three significant drivers of growth in the industry.
First, law services are too expensive. The US billionaire Peter Thiel, who was an investor in Facebook and PayPal, recently said even a single digit millionaire like Hulk Hogan cannot afford to get legal justice. This great expense is a big factor in driving change.
Advances in technology are another key factor. Technology is now enabling the sorting of large amounts of information very quickly, which is having a huge impact on legal services.
Finally, the third thing that’s very significant is there are too many lawyers. In Australia, for example, we graduated over 12,000 lawyers in one year in 2014 – and we only had jobs for 800 of them in law firms. Clearly, there is an oversupply.
Law is one of the very last professions that has not been transformed by new technologies, but so many people are looking at how to do it. It is an area of quite some focus – an area that really is crying out to be transformed and no one is quite sure how it will play out. It hasn’t played out yet, and it is only at the beginning of its journey.
What effect is the disintermediation of legal services having on the industry?
I think the answer is not much! Right now, it is probably the wrong question. A couple of years ago, I believed the legal industry was going to be disintermediated and that customers or clients could bypass law firms and buy the various components of legal services from different individual providers at a cheaper price and higher quality. Ultimately, that hasn’t happened yet.
It is still easier to go to a law firm and get them to manage the legal strategy advice, the legal research, the document assembly, the discovery of documents and all the other tasks that go into the nine components of providing a legal service.
So disintermediation has not really happened yet, but I think it will. One of the things needed for that to succeed is the technology to manage the different components of legal services. At the moment, it is easier to go to a law firm and let them manage the whole process.
Our product, Dazychain, is one of the first efforts at managing that collaboration between all the providers, and we are going to see the field growing rapidly over the next few years.
What types of legal services technology do you expect will experience the most growth next year?
One of the most popular technologies experiencing growth is alternative sources of legal advice in the form of websites such as LawPath and Rocket Lawyer. These sites have many lawyers spread over a wide geographical area who offer their services.
You can select them, see ratings and obtain free advice to begin with before sourcing someone you want to provide further advice. They are not very sophisticated really, but they have grown enormously, which has driven the price of law down.
The second one I’d like to mention is e-discovery. It used to be a pain for young lawyers, as I once was, to do a discovery for a big case. E-discovery involves going through large amounts of documents in litigation to find evidence. Previously, young lawyers had to comb through it, and it was a really boring job I can tell you. Now, quite sophisticated computer programs do this task much more quickly.
If you consider the Hillary Clinton emails scandal in the US, I believe Donald Trump said it would be impossible to go through the thousands of emails that were revealed in the eight days before the election. Well, it’s not impossible; they can plug in an e-discovery system and whizz through them. So these platforms are getting a lot of traction because they are quite useful.
Other online tools in Australia include Plexus, which is a system that writes the terms and conditions and the permit applications for carrying out trade promotion competitions in the different states. Performing this task used to require a lawyer for each of the seven states of Australia to advise on that particular state’s laws and would probably cost you around $15,000. Plexus means you can pay a subscription, which is about $750, and it will generate all the documentation for you in 15 minutes. It is a terrific use of technology.
Looking ahead, one of the biggest upcoming developments is artificial intelligence. People talk about Dr Watson, which is the IBM super computer. From what I gather after talking to lawyers from around the world, the system is really in its infancy. It is being heavily tested in Canada, but it is going to be some time before we see that replacing all the young lawyers doing research. But it will come.
Practice management software is another area that is big right now, and there are many companies within this space. All law firms run on some form of practice management software that handles their billing, time recording and document storage.
How does Yarris fit into the market?
Yarris provides two systems: Yarris Legal Gateway and Dazychain.
Yarris Legal Gateway is a panel management software that enables organisations to manage lawyers. For example, a government here in Australia had 30 departments and 350 managers employing 20 different law firms. How on earth could the government as a whole know what was going on? What fees were being paid? And who was providing good service? By using a system, this process becomes completely transparent and transformed their operations, enabling them to save 25 per cent on costs.
The system allows you to select better and more appropriate lawyers for a particular job by using ratings and reviews. Essentially, it allows managers to manage better. They can see at a glance what work has been done or hasn’t been done. Furthermore, the software enables you to control costs. You can see what costs have been rendered, which can be quite difficult if you are using a paper system. It also allows a certain amount of automation, so if a bill exceeds an estimate, then it is automatically not paid and that puts a real cap on costs.
Dazychain, meanwhile, is designed for simplicity. It has all the benefits of a big system, such as Yarris Legal Gateway, but it is also very simple and intuitive to use. That is important because we have seen that companies can stop using systems if they require a lot of training or someone senior leaves and the replacement needs training. Nowadays, we are very used to using simple Apple-type consumer technologies that are intuitive, and so commercial systems need to emulate this to be successful. Dazychain has those qualities.
Dazychain has a really extensive menu of available tools. It has a first-class document management system, with version control and elastic search built into it. There is no cap on the number of documents that can be added simultaneously, and single documents can be dragged and dropped in. The system also sets up templates for legal projects or allows you to set up your own templates so that you can benchmark best practice. You can use these templates for specific transactions to outline how you do it, what documents are needed and set a bar for everyone to meet expectations.
Dazychain stores all communications permanently, so you can see exactly what has passed between the various people who are involved. The system reports on invoices and you can report in any way that you want. For example, you can extract the invoice data to Excel in order to formulate a range of reports based on your preferences.
Basically, Dazychain means you don’t have to ring people up and chase the progress of processes; you can just look at the system and you will know. You also don’t have to go hunting for documents and emails that have been lost or misplaced. As any lawyer knows, for every matter, you hunt for documents or precedents, and Dazychain eliminates this legwork. You can go home with your mind at peace, knowing that your work has either been done or not been done. You will know. You do not know that with traditional, largely paper-based systems.
The result for one of our customers who uses Dazychain faithfully was they saved five hours per week, per person on administration tasks. That is their figure, which shows Dazychain is a dramatically good system. Legal technology is moving towards unbundling the various services that go into providing a legal service. To do that, you need a technology system to glue all the bits together, and Dazychain does that really well.