Yesterday, Artificial Lawyer reported on a tech company, H4, co-created by former banker, Joe Seifert (pictured above), that has been hiding somewhat in the shadows until recently, and which just revealed it had accumulated around $27m in funding for its doc generation, data collection and analysis platform from stellar investors such as Goldman Sachs, JP Morgan and Linklaters.
Artificial Lawyer spoke at length with Seifert to find out some more about this company that has existed since 2015, but now suddenly has hit the headlines.
Seifert is based in London, but his co-founder and CTO, Dushko Jordanovski, is based in North Macedonia along with a group of developers. Seifert has worked at JP Morgan and was Chief Investment Officer for Essar Capital with holdings valued at £17 bn. Neither are lawyers by background nor have worked inside a law firm.
However, their COO – Andy Byrne – who is also their GC and joined in 2018, used to be a senior associate at Linklaters, which made its investment in H4 back in 2018. As you can see, there is a connection between the investors and some of the key people who work at the company.
All well and good, but what is H4 all about? As explored yesterday, H4 provides an all-in-one, joined up platform that works from templates and a proprietary doc creation system, uses a digital negotiation space so you can have a sort of Google Docs experience and keep everyone in the loop, then it collects key data at the point of creation so you can then have a dashboard view of how clauses were negotiated and the end client, e.g. a bank, can see key aspects of the financial services (FS) products that are created via contract inside the platform.
On one level this is not rocket science and as Seifert explains the basic concept isn’t Earth shattering, it’s just a question of providing lawyers with something so intuitive, so useful, that they drop the old ways of doing things.
‘Look at it this way, 10 year-olds can use Google Docs to do their homework projects, but when lawyers are doing a $10 billion deal they use Word to create the documents and email to communicate,’ he explains with a chuckle.
‘You get lawyers emailing each other to ask who has done what, who has signed or not. My engineers cannot believe how lawyers work today, sending emails around to find out what is going on is something they used to do years ago before there were better methods,’ he adds.
And in another great image, Seifert notes: ‘It can’t be right that we can all book a flight or manage our central heating with an iPhone, but at a law firm many people still print out documents and scribble on them.’
Change Is Coming
That said, Seifert is very optimistic about lawyers’ ability to change. He notes that banks and other major FS institutions are central to the market and want things to be more efficient. Law firms will move with the times.
‘We are great believers there will be significant change,’ he adds.
He also explains that it’s a bit bizarre that lawyers are using so many different software applications.
‘We take the view that people want a tool not just for one [type of] document. There will be a small number of platforms [eventually],’ he adds.
And this in turn connects to a broad vision of doc creation and management. As noted, the goal is to make everything digital, everything transparent, everything collaborative, and then able to provide useful metrics and analytics to all involved.
One of the starting points is templates. As Seifert points out, working from scratch is rare these days. In fact, he adds: ‘In a bank you never start with a blank document. The only time I did was when I wrote my resignation letter.’
With templates comes predictability and the ability to build software that can be attuned to capture all the relevant data at the point of creation.
That takes us to the structured vs unstructured debate, something where Artificial Lawyer has had some great discussions in the past with the Nakhoda team, as well as smart contract companies such as Clause and OpenLaw.
The point here is that if you start off with templates in a digital forum, where completed contracts have all the negotiation data, and end output and conditional data is captured and kept in a dashboard, then you avoid many of the problems that analysing text docs after the fact creates.
Text will always be subjective and very complex – because it’s very human – so there will always be room for NLP review tech. But, you can short-circuit part of this by getting to the factual data from its creation point.
With that data H4 can show how long it takes to complete certain agreements and why, it shows bottlenecks, what happens if you change a clause, or where you maybe should change a clause because it has better results, and then you can improve the template.
In short, the data to analysis process is a circle, which then feeds back into the template, all the time improving the process, reducing friction, and connects with one of Artificial Lawyer’s main campaigning themes: saves time and money.
Seifert notes that if one of the big banks had built this it may have been hard for all the others to use it. He explains that third party software works well in this kind of market.
He adds that the 120-person team is made up of ex-bankers, ex-lawyers, and people from top tech companies. The banks and top commercial law firms trust them.
‘A lot of people know us in this sector and know we understand the nitty gritty of the problems [they face],’ he concludes.
This is not Earth-shattering tech, but it is tech that could help reshape how lawyers work. And as mentioned, other companies have been here before. There is nothing new about doc templates, collaborative spaces, data capture from docs and so on. None of that is new at all.
But, somehow Seifert has stitched it all together, made it easy to use, and got the trust of important clients so that they’ll actually use it. And maybe it’s the last part that’s the most important.
We can create as much tech as we want, but if the leaders of the market, i.e. the top clients and leading firms don’t use it and thereby don’t set a new standard for the market, then little changes.
So, the fact that Seifert has got the attention and trust of Big Law and the top banks is perhaps the key element here that ties it all together. And, it’s worth mentioning again, neither Seifert, or his co-founder, are lawyers, but they’ve still managed to do this.
Perhaps that’s another message to the legal tech market?