Legal Transaction Management Software is Finally a Thing
A Guest Post by Gordon Cassie, co-founder of Closing Folders.
‘Someone’s going to do this one day,’ is probably the most frustrating comment I’ve received after a product demo.
It simultaneously acknowledges the merit of the concept while offhandedly dismissing the ability to execute it. But it was one of first comments my co-founder, Sahil Zaman, and I got when we started talking about the concept for our company, Closing Folders.
Five years later, I realise it perfectly encapsulated the reality at that time. Everyone agreed that the process of running legal transactions in 2013 was a train wreck, but nobody was interested in investing time to find a solution.
But I’m writing today to say that I think that’s finally starting to change and that legal transaction management software (LTM for the acronym fans) is ready to be inaugurated as the newest category of Legal Tech software. But first, some history.
The Origin Story
In Toronto there is an underground network of food courts built to handle the thousands who descend from the office towers for lunch every day. In the evening, they are echoey expanses punctuated only by the occasional office worker inhaling noodles from a tray before they scurry back upstairs to work into the wee hours of the night.
It was here that Sahil Zaman and I first met to discuss Closing Folders. His firm had recently cut the associate dinner budget in response to client cost pressures so the end-of-day discounts on noodles were appreciated.
We were both due back at work shortly. Sahil would spend the night organising over 2,000 consents that were needed for a multinational corporate restructuring. I had to assemble a box of documents to courier out for signature the next day. Neither of us were particularly excited about the tasks ahead.
We actually weren’t specifically interested in starting a Legal Tech company, but after spitballing for the better part of an hour the only idea we had was for a software platform that would do all our grinding work for us so we could go home.
Over the next few weeks, we refined the concept for this new platform – it would keep all the documents in the legal transaction organised perfectly, all the rote, repetitive tasks would be automated, all the lawyers and clients would login and collaborate to achieve a perfectly seamless closing with zero loose ends.
Making it Real
Turns out it wasn’t a very unique idea. As we started to research it we came across a bit of an unfortunate history of companies that had tried this in various ways and either pivoted or closed up shop.
We read all the stories (such as about Law Pal) and spoke with a few of the individuals involved. They told tales of an unreceptive market with zero interest in innovation, and sales processes that moved at a snail’s pace.
Any sensible person would have moved on. But we decided to give it the ol’ college try. So in summer 2013 we incorporated Closing Folders Inc. and got cracking.
Needless to say, it wasn’t quite a rocketship. Late in 2014, I remember coming back from a particularly discouraging demo with Sahil and getting a bit existential about it all.
The response from most lawyers at that time was a multi-step rationalisation on why the product was unnecessary: ‘We don’t have this problem, and even if we had this problem, our associates bill a lot of hours fixing this problem, and even if we can’t collect on those hours, we are already paying the associates a fixed salary so it’s no loss to us.’
They would stop us mid-demo and send us packing. This day we found ourselves sitting around the office wondering if maybe the idea didn’t really have any legs. Maybe our experiences as transactional lawyers had been anomalous and most lawyers weren’t having that hard a time?
A Shared Problem That Needed Solving
That wasn’t the case though – all over the world enterprising lawyers were independently coming up with the same concept.
- In Australia, long time transactional lawyer Stuart Clout founded The DocYard in 2014 with the mission of making ‘deal management transparent, collaborative, and effective’.
- In the UK, Legatics was founded in 2015, (their message ‘transforming legal transactions’).
- In the US, Simply Agree, (‘Efficient closings. Seamless transactions’) and Doxly (‘Transactions. Workflows. Simplified’) both launched in 2016.
- In the same year, Dealcloser launched in Canada (‘Transforming and modernizing the deal process’).
Basically, many intelligent people were independently convinced that legal transactions needed some sort of simplification or transformation or modernisation, and they were quitting their law jobs in droves to bring it to fruition.
What’s really cool though is that right around this time, lawyers started to pay a bit more attention during the demos. Perhaps if they could close deals in 30% less time that might help them win their next big client?
Perhaps the 20 hours of non-billable time an associate spent making a closing book could be better allocated? Perhaps having every signature page and document version in a centralised repository could prevent a few costly mistakes?
Instead of getting promptly shown the door, firms started calling us back for follow up demos and began talking more seriously about how LTM could augment the way they do business.
The Future of LTM
Off the back of this newfound interest, all of these companies started to get a little bit of traction, make a few sales, and get users running live deals. Companies like Doxly secured substantial support from law firm operated entities (e.g. Dentons’ Nextlaw Labs/Nextlaw Ventures). The faintest outlines of a new Legal Tech software category began to take shape*.
Fast forward to today and LTM is definitely here to stay. Many of us count elite global law firms as customers and everyday more lawyers try their first live deal on an LTM product.
Don’t get me wrong – it’s very early days and most law firms are still shuffling papers around at closing. But when a law firm finds out that their competitor is using Closing Folders, things tend to move a lot faster.
[* Note: at present LTM is included within the AL 100’s Workflow Automation Category. ]
Closing Folders is also featured in the AL 100.