AI Co. Ayfie ‘Shutting Down US Base, Jobs Lost’ – Sources

Sources close to search and text analysis company, Ayfie, have told Artificial Lawyer that its US base is shutting down with the loss of several jobs. The move follows the closure of the German operation in November last year, which saw the departure of its CEO.

One source close to the AI company, which works with several major law firms, told this site: ‘The US operations have been closed down since 31 December and all employees have been terminated.’

Ayfie has had several small offices dotted around the US at various stages in its development, including New York and Denver. However, the last known official office base was listed as in Utah.

It would appear that around half a dozen jobs in the US have been affected. Earlier in 2020, the company’s previous US-based CEO, Erik Baklid, and Chief Strategy Officer, Rob Wescott, also left the company – though their departures were not part of the recent closure moves.

However, another source stressed to Artificial Lawyer that the US operations had gone remote in any case because of the pandemic, that it was primarily a sales operation, and that the product management and deeper client relationships for the US and elsewhere will continue to be run from the UK and EU. Even so, they also confirmed the news and said: ‘In Q4 Ayfie closed its US office, and 5 people were let go. It was announced internally to staff.’

It’s fair to say that Ayfie has had a ‘bumpy’ year or so, with several changes in key management, a public listing in Norway, and internal debate about its future strategic direction.

While the sources both agreed on the closure, their view of what this means for ongoing customers differed. As noted, while the second source stated that there would be continuity of customer service, the first source was unsure what would happen next because ‘Ayfie Group has determined enterprise search is their focus for the foreseeable future’, rather than products such as Ayfie Inspector and Inspector for Relativity, which are more focused on broader text analysis, such as for eDiscovery and investigations work. That said, there is no official word yet on which path they are taking.

Either way, there seems to be a strategic discussion on whether to focus more on search, or keep a more balanced approach between KM search and broader text analysis. Earlier in 2020, and under the leadership of the now departed CEO who was based in Germany, Johannes Stielher, there had also been internal debate about whether to focus more on the legal market, rather than on a wide range of sectors, as had been the previous strategy.

The company’s leadership is now in the hands of former CFO, Siw Ødegaard. Artificial Lawyer has asked for a comment, but has not heard back yet.

In addition, the first source said there could be ‘a part-time support person in Brazil cover[ing] the support for North American clients’.

Interestingly, it’s understood that at least one member of the US staff had asked the management in Europe if they could acquire the IP from the company for the Inspector product in order to launch a separate business in America to help ‘their current clients, providing customer support and development, bug fixes, and help the current customers with their growing needs, … however…. this was declined’.

So, where does that leave us? Despite the changes, Ayfie is still going strong in Europe (and still has clients in the US). It still is listed on the Merkur Market in Norway – making it one of a handful of listed legal tech companies. And, it’s still in the process of winning new clients in multiple markets.

From one point of view all the changes could be seen negatively, i.e. the losses of staff and closure of offices is a blow to the company, alternatively one could see the moves as those of a company cutting back costs in areas that were deemed not essential to the business, allowing it to grow in other ways and invest more in its core European software development base.

It’s probably too soon to tell yet what the outcome of these cuts will be, as Germany was closed in November and, reportedly, the US base at the end of 2020. It will be several months before sales revenue and new client wins can be analysed to see the overall position of the company. And as said, it’s important to stress that Ayfie continues and aims to keep growing, albeit without such a broad international office network.