Transaction Management Falls Short. Here’s How Yours Can Be Better.

Speaker 1: 

Welcome to LEGALTECH MATTERS, a Litera podcast dedicated to creating conversations about trends, technology, and innovation for modern law firms and companies, big and small. 

Bob Ambrogi: 

Welcome everybody to today’s webcast on transaction management where we’re going to take a look at the traditional labor intensive error-prone process of manually managing legal transactions. And talk about how that can be transformed through the wonders of technology. Today’s program is jointly presented by Litera and Above the Law. I’ll be moderating it today. My name is Bob Ambrogi. I am a columnist for Above the Law. I also write a blog called LawSites where I write about technology and innovation in law. Let me get started by introducing today’s panelists or actually I’m going to let them introduce themselves. We have a stellar transatlantic lineup for you here today. And I’m going to ask each of the three panelists to briefly introduce themselves and tell us a little bit about what you do. Let’s start here in New York with Jeff Laretto. Jeff? 

Jeff Laretto: 

Bob, thanks for the introduction. My name is Jeff Laretto. I’m an emerging companies partner with Cooley’s New York City practice. And my practice is predominantly helping small private companies on trajectories to be very large public companies, raise capital, execute transactions like venture financings, and I spend a little bit of my time representing investors on the same types of deals. 

Bob Ambrogi: 

Thanks, Jeff. And moving over to London. Emma Vertigen, do you want to introduce yourself? 

Emma Vertigen: 

Yeah. Thanks, Bob. Hi, everyone. Emma Vertigen. I head up the Transaction Growth and Adoption team at Litera. I was also previously a practicing attorney in aviation finance, but I actually moved over to Transact specifically because I wanted to work in Transact. It was always a passion of mine. I even thought about setting out my own version, just didn’t have the guts to do it. And so when I found someone doing it, I thought if I can’t beat them, I’ll join them. And so now I translated that passion to really helping lawyers move over to the platform themselves and the adoption process. 

Bob Ambrogi: 

Emma, I’m sorry for mispronouncing your last name. It only took me two minutes to mispronounce somebody’s name. Usually it takes me longer. And last but not least also from London, John Kelsey. John, do you want to introduce yourself? 

John Kelsey: 

Thanks, Bob. Yes, I’m John Kelsey. I head up the Real Estate team at Simmons & Simmons. I’m based here in London in the UK. And I do a lot of work with our real estate finance group and we’ve been adopting the Litera Workshare Transact platform in particular, amongst other tools. So looking forward to the discussion. 

Bob Ambrogi: 

Thanks. Before we get to the discussion, we are going to kick things off with a quick poll question just to get a sense of the audience’s familiarity with transaction management software. So if we can put that question up and ask everybody in the audience to just take a moment to put your answer in there, and we’re going to just give it about 20/30 seconds for you to do that. And once we do that, we’re going to put the results up. 

Emma Vertigen: 

This is the part I’ve been most excited about. Definitely want to see some of these stats. We’ve got so many people joining today. 

Bob Ambrogi: 

So it appears that we have a large number of people here… I’m not sure if we’re posting. Let’s go ahead and I think we can go ahead and close that out at this point. But let people see if for just a second. A large number of people, it was almost 60%, have heard of it but haven’t tried it. And some of you are experienced on it and others have heard of it. And some of you have actually have been part of a deal that was involving it. So that’s a good background on where we are and what we’re talking about today. So let’s get into this a little bit. 

Bob Ambrogi: 

Emma, you mentioned that you actually came to work for Transact because you had experienced the pains, I guess, of the manual and tedious parts of transaction management in the past. What were those pains for you? What was it like doing transactions manually for you? 

Emma Vertigen: 

Well, I’m not sure if this webinar is going to be long enough for that, but I would certainly give you some highlights. So we’re looking at the kickoff for a deal. The partner returns to me, I was a junior attorney, and say, “We’ve got the deal coming. Can you get this set up for me?” And I’ll be looking for a precedent and I would start to manually do that in Word. And I’ve got three examples. One that was about 50 pages long took me, I looked at my recordings, it actually took me about 10 hours, which of course the partner was in disbelief. This is not a number I’ve made up. They just couldn’t understand how it could take so long. And that might be a bit of maybe it’s been a while since they’ve created their own Word checklist because they’re more senior. 

Emma Vertigen: 

But also you do forget how time consuming a manual is. Even things like formatting a Word table was the bane of my life. When you get to the crux of a deal, you’re running CP status calls. Again, that’s a pain point that people often relate to because often you have to cut a lot of that timer going down when you are invoicing the client, they don’t want to pay for the [inaudible 00:06:00], even though they’re of course essential. And then running through to closing my personal, I think another horror story is when suddenly a director is unavailable and you’ve already prepared your signature package and your signature pages. And you’re running around trying to remember off the checklist which ones you have to replace and you have to do it every time of course. And you can’t just copy and paste it once, which all of the above are key pain points that technology can help with. 

Page BreakBob Ambrogi: 

Jeff, what about you? I mean, obviously the fact that you all are on this panel means, I guess, that you’ve seen the light to some extent with regard to technology. But, Jeff, what’s been your experience with non-technological approaches to handling complex deals? 

Jeff Laretto: 

Oh, my gosh. Well, I’ll start by saying Cooley is known as a very tech enabled firm. And we’ve been proofing and piloting various types of technology going back to things like DocuSign, cap table management software, all sorts of things that have basically displaced what are manual and error prone processes with automated proprietary solutions of various kinds. I mean, you go back 10 years and it’s insane to look at how things are done, right? You bring together 15 investors investing into a company, they’re all signing upwards of 10 docs. That’s 150 different signatures that you have to track, you have to make sure they’re correct, you have to keep them organized. And somebody is responsible for coordinating, quarterbacking that process. And that’s usually associates and paralegals and sometimes associates that are billing 6/$700 an hour at the top firms. 

Jeff Laretto: 

And so if you look at that, you’ve got associates running around chasing 150 signature pages, like Emma mentioned. Trying to run down people that may be on safari in Africa. I mean, any number of issues come up in that process. People miss pages, people are nonresponsive, people sign the wrong documents, associates miss things. And so there’s a lot of chaos in what is a digital process. And, yeah, I mean, we’re always looking at solutions and tools to get out of that manual world and reduce errors and actually reduce the quantum work our attorneys put in. And so anytime we see technology out there that helps any aspect of maintaining a client relationship, our firm tends to embrace that and pilot it. We’re known for a lot of different technologies that we kind of rolled out internally. 

Bob Ambrogi: 

And, John, how about from you? You’re doing a different kind of transaction perhaps than Jeff, but I’m sure equally complex. 

John Kelsey: 

Yeah, absolutely. I mean, we sat down… I think in terms of our reputation to pick up on Jeff’s thread there that we’ve been well known for embracing technology, but very much the client facing tools. And actually we neglected, to be honest, the internal processes for a number of years until about five or six years ago and we had a real push. We sat down with our real estate finance colleagues and did a matter deconstruction process. So we thought there’s a lot of pain points across the whole life of the deal in all sorts of ways. Where are the really big items there that we must be able to do something different? Or why is it that we’re spending so many hours doing whatever it might be? 

John Kelsey: 

And we very quickly identified CP management was just becoming an industry in itself and everybody hated it. You’d be sat on these calls with dozens of people. Some poor trainee, as we call them, or paralegal, would be sat there with a Word document trying to follow what on earth was going on and everybody would go in tangents. And then they’d have to produce this Word document that told everybody what the CP list was… What the status was. And that would take probably at least the rest of that day to get round everybody, everybody approve it. And then it goes out to the client. This is madness. There must be some software out there that answers that. And what happened in this particular example happened on the Workshare product and that transformed things. 

John Kelsey: 

And we started measuring the costs as well, which we haven’t been doing before. And we think we’ve saved, the real estate finance team, saved at least half a million a year in just wasted time. And that’s in a group that’s about 20 lawyers. So that’s not an insignificant sum. And we very quickly found that was an easy solution with a very quick win and then clients loved it and the rest of it is history. 

Bob Ambrogi: 

You’ve all, I think, alluded to kind of some of the aspects of transactions that can be addressed through technology. But can we break it down a little bit more maybe for people who aren’t fully familiar with what we’re talking about here or how these kinds of deals work. What are some of the key stages of transactions and how can technology help in addressing them? Anybody want to take that in particular? 

John Kelsey: 

I would say personally, I think there are two key points for what we found in adopting it. One, is taking… we could say it’s time saving, but I would say it’s more about stress saving, is the real time communication. So we now run CP calls and it’s being updated live, and anybody who can be bothered to go into the relevant site can see it immediately. So there isn’t that merry-go-round afterwards that creates out of date information. And also then just a really quick win as well is finding documents after the deal is done. I mean, how much time do we always when the client ends up saying, can you find me that one document? And the partner gets the call, they give it to a paralegal, they’ve no idea about the deal, et cetera. Now you can say, well, you can find it yourself. That’s not always the answer, but sometimes the answer, but yeah. Finding those. And, again, just for certainly in the UK, you can almost never charge for the time involved in that sort of thing. Clients are not going to pay for that, but they expect us to deliver. 

Jeff Laretto: 

Bob, I’ll jump in with my perspective. With the type of deals I do these venture capital financings, there’s often a big push at the outside of the deal, which is drafting the principal transaction documents. And then there’s an equally painful push at the back end of the deal coordinating among hundreds of parties signing documents. And we’re in the infancy of rolling out really state of the art technology in our firm, despite being leagues ahead of other firms, which probably says a lot about the state of play of the legal profession. For the early stage, what we’ve been doing for the earliest parts of the deal, the financing docs, we’ve been rolling out technology internally and somewhat externally, this Cooley GO product we have for a long time to basically get definitive documents prepped really quickly using automation tech. 

Jeff Laretto: 

On the back end where I really have some interest in Litera is executing deal closing processes with the Litera transact platform. I’m probably one of the most prolific people in my firm that likes that particular tool for a variety of reasons, but that helps me coordinate closing processes. And also it actually allows me to do it if I’m operating by myself, potentially without paralegal or junior support, because it automates a lot of processes that are in the old fashioned world manual and labor intensive and just painful. And to John’s point, nobody’s going to pay for that stuff. 

Bob Ambrogi: 

Yeah. And Emma, what’s your perspective on that? Again, you you’ve been on kind of both sides of this coin as a practitioner and working with a company that’s providing this technology. So what are some of the key steps that you see that are inherent in these deals and how they can be addressed by technology? 

Emma Vertigen: 

Yeah, absolutely. I mean, I’m just going to dub in if anyone does want to read the white paper, obviously we’ve broken down, identified some six key stages that are available to read at your leisure. I think one of the most important things is to do exactly what sort of John and Jeff are just describing, which is find out what your own stages are. Because whether it’s… We’re throwing together six, but really they aren’t official steps that we put in a way that we can measure this so that we can do it before and after comparison to show that we are improving the flow. So whether you do it as deal management during the lifecycle deal. And then closing is another section, and you simply have two parts of your deal. That’s fine. But you just going through that process and reflecting on your deal to work out what those steps are, I think, is very important. 

Bob Ambrogi: 

Yeah, I don’t know if anybody… I was trying to find the URL for that white paper and I couldn’t find it. So if anybody in the background here has a link to it and wants to make it available, I can let people know where they can find that. But it’s on the Litera site somewhere, right? Yeah. Okay. But I think some of the steps that you do talk about there though, are kind of the… I mean, Jeff’s talking about the initial documents, but maybe even before the initial documents, I don’t know, I’m not a transaction lawyer, but is kind of the planning. It’s kind of the planning of the stages of the deal and who has to do what. Is that fair to say? And is there a way that the technology can help facilitate that process of planning out what’s going to come down?

Emma Vertigen: 

Yeah. And I actually think there’s sort of two prongs that first of all, yes, for understanding who is going to be doing what and what roles they’re taking. Even something as basic as a working group, we can now incorporate into technology so that if someone goes on holiday or someone’s new to the deal, they can jump in and understand who is taking what role. But also, I think moving on to technology is forcing us to reevaluate how we are doing our deals generally. And it’s prompting these questions about how we project plan and it’s bringing these conversations to the forefront of the deals, I think. 

Emma Vertigen: 

Before, we’d be going through a deal and then going through to closing and suddenly thinking, “Hey, maybe there’s a better way to be managing this closing.” But maybe it’s a bit too late by then to start introducing a different type of technology or a different type of process. But instead, we’re now having these conversations so much earlier. Now we’re having people either turn to us from the vendor side or even I’m hearing it from the legal tech teams and the innovation teams that they’ve been turned to as soon as they have that sniff of a deal to say, we know what’s coming down the pipeline. What can you recommend to help us make this more seamless? 

Page BreakBob Ambrogi: 

Mm-hmm (affirmative). John, how about for you? How you would incorporate technology into the kind of the planning and early stages of a deal? 

John Kelsey: 

Yeah. I mean, to pick up on what Emma has just been saying what we found is when we started deploying the technology, that’s what drove the change in behaviors and the way of going about things from the lawyers. Because I think it’s the usual thing, the senior lawyers who’ve done the same transaction hundreds of times before. No, it’s all in their head. The juniors, poor juniors, probably we have no idea what’s going on or what to expect. And so what we found is it’s the technology that’s forced a conversation at the beginning between the team and indeed the clients and the other side, et cetera, saying we’ve got this, we’ve got a already made checklist. 

John Kelsey: 

Yes, it’s technology driven, but that just helps oil the wheels. And it kicks the process off. It’s so much more systematically and methodically, and you can anticipate things that are normally just left to the end of the deal. And then causes again that stress point when everybody’s already too tired on the deal and there’s massive deal fatigue. And you’re now having to run around working everything out. So we found it’s really sort of changed the behavior of transactional noise in a really good way. I think possibly people wouldn’t have really wanted that change. I think lawyers generally are relatively resistant to change. Aren’t they? Particularly the sort of lawyers who are doing bespoke deals, everything is very bespoke. They can’t possibly reduce what they do to a checklist. I mean, that just devalues what they do. So why change? So I think it’s a good catalyst for change. 

Bob Ambrogi: 

It occurs to me that we we’ve kind of launched into talking about some of these transactions and the specific kinds, both that John and Jeff are involved in now. But, Emma, maybe you could address the question of what is the universe of transactions we’re talking about here? What kinds of transactions are appropriate to be addressed through a technology platform such as Litera Transact? 

Emma Vertigen: 

Yeah, that’s a pretty good starting point. So the idea is that we are trying to be team agnostic. We’re trying to develop something here that anyone can… And, again, not to be so reductionist, but taking John’s line that I kind of agree that really, no matter how complex the deal is, it comes down to a list of steps or documents that we have to complete in order to get through to that closing or completion. And so that’s what we’re trying to automate here. It’s putting into a checklist, whether you call it a CP checklist or whether you call it a closing list, that doesn’t really matter. As long as that structure is there, you can use this tool. It really is just a way of project managing that deal. So it could be anything. 

Bob Ambrogi: 

Yeah. Has the nature of deals changed over the last decade or so such that technology becomes more important to working around those deals? Jeff, what do you think of that? 

Page BreakJeff Laretto: 

I am happy to jump in. I mean, I play in the venture capital ecosystem and I think over the last three year, actually last two years, you’ve seen tremendous increases in sort of the urgency of getting deals done. So the timelines have collapsed and you’ve seen a lot more pressure and a lot more parties to a deal. So hot companies will now syndicate to large investors and a long tail of well known entrepreneurs in the ecosystem, which means the sheer number of parties has increased exponentially. So you blend all those into a pot, more complex deals, many more parties, compressed timeline, and a traditional paper manual process usually comes up short in some way and either takes longer. And it costs more, leads to client disappointment, execution risk, or gets done efficiently. And to get to that final point, smart firms are recognizing you need some sort of software to just chip away at the manual processes on this. So those are the high level dynamics that I’m seeing in my practice. 

Bob Ambrogi: 

Right. John, how about [crosstalk 00:20:58]. Oh, go ahead, Emma. I’m sorry. 

Emma Vertigen: 

Well, I was going to add in one of the things that we were thinking of sort of why has these deals become more complex and really is a complement to lawyers in that either something’s gone through to litigation and we’ve learned from that and we’ve put in better protection for our clients that they never experienced that, or they’re adding new clauses in or documents getting longer. And it’s just the volume’s got bigger because of these structures. And it’s a good thing. It’s just the traditional setup of those deals. Teams haven’t changed. It’s still partner attorney, paralegal. And that part hasn’t changed. And that’s why technology can complement it. 

Bob Ambrogi: 

Mm-hmm (affirmative). Yeah. 

John Kelsey: 

Yeah. I would say we’ve certainly seen a greater focus of risks, identifying them through due diligence than working out how you structure around them, which then leads to greater complexity and that sort of thing. Particularly obviously coming out of GFC albeit that some time ago now. There’s certainly a much greater regulatory burden. So there’s a lot more boxes to tick. Tax has become ever more complex and, again, pushed deal structures to be more complex. And then you’ve got broader issues. ESG issues, which weren’t really a thing a few years ago. That’s now leading to, “Okay. Now we’ve got to review everything from that perspective.” So it just seems to… When I reflect back on my 20 something, maybe it’s a bit longer, years of practice, it just seems to be every year that goes by there’s something else. It never gets simpler. But what we can try and do is take the stress out of it and take the time out it using the tech. 

Bob Ambrogi: 

I would think that risk avoidance is a huge incentive or a huge motivator for legal professionals to be considering the use of this kind of technology. Is that fair to say? 

Page BreakEmma Vertigen: 

Yeah, I think it certainly should be. And it probably is maybe from the IT side of things. From the things that we hear most shouted about is mostly for revenue, that people want to increase profitability. And of course that’s done by reducing write off and being more efficient with the deals. And maybe it’s because people are familiar with the way they do their deals right now that they don’t maybe see the risk that is associated with doing it the more traditional way. But it certainly should be one of the top considerations. 

Bob Ambrogi: 

Yeah. Anybody else want to just address that risk issue? Any other thoughts on that? 

Jeff Laretto: 

Yeah, at least from the venture capital perspective. There’s an interesting phenomenon that if you go back 20 years, a typical series A financing cost $40,000. And here we are 20 years later, and a typical series A financing costs, from the client’s perspective, $40,000. What hasn’t stayed static in that period is legal fees, which have probably doubled or tripled. And the quantum of work hasn’t decreased either under the traditional mode, if anything, it’s got more complex. And you have all these current converging on a really, really dire situation for expensive law firms that play in this space. And so adopting these technologies is actually going to be part of survival, not just profitability increase, but absolute survival. And so firms that don’t start to think about different types of software to manage these processes are actually going to get left in the dust, I think. 

Bob Ambrogi: 

Yeah. I’d agree with that. 

John Kelsey: 

Yeah. I would say there’s always another firm out there who’s going to say we can do this better, cheaper, faster, all those things. And so, yeah, it’s essentially to have… It’s essential now, I think, to have that capability and to have used it already to convince clients that it’s a good thing. And to clients, yes, you can do it cheaper and they’ll go, well, why? And you can use technology to justify that. 

Bob Ambrogi: 

Emma, were you going to say something? 

Emma Vertigen: 

I’m violently agreeing with both Jeff and John, but I was going to add as well, the flip of that, which is yes, there is that sort of fear associated with being left behind, which is a real threat because of course that’s why my team exists. We’re supporting so many law firms get onboarded with this technology now, and it’s identifying it. Even the stats that we were looking at earlier that 60% of people have now heard of it, but are not yet on it. So you can see that that’s going to shift more into people using it. 

Emma Vertigen: 

I guess there is also the flip of that, which is it’s an exciting move. It’s a good move. It’s been tested. John, Jeff have done so many deals on this platform. It’s not actually innovative anymore. People now know what transaction management is and I don’t want to sort of undermine us and not say that we’re being innovative here. Of course we are, but perhaps three years ago, five years ago, that was the case with transaction management. And now people know it is something that you need to have and then they’re vetting the tools that way. 

Bob Ambrogi: 

Another flip side maybe to this, the client aspect of this, I’m wondering to what extent clients… John, you mentioned talking to clients about the fact that there’s a better or faster, cheaper way. Are clients aware of this and are they asking their firms to be using these technologies? 

John Kelsey: 

Yeah. I mean, we’ve been quite aggressive in pushing the use of this type of technology and other related technologies. So much so that now when we’re quoting on transactions, we quote a certain price based on assumption that we are using these tools. And when I say we’re using them, I mean everybody involved in the deal is going to be using them. And if you don’t want to do that for some reason, then that’s going to impact on the quotes. 

John Kelsey: 

So we really push it because I think you get much more return when everybody’s using it because you’re just going to cut down on emails is one very easy example. And as I’ve mentioned earlier, this real time communication is so much of a time saver. And if somebody’s not on a call or whatever, they can see what’s happening in real time. I mean, you might not want to, if you’ve not adopted it before, you might want to go a bit slower than that. But I would say our experience is that we very quickly moved to that sort of assertive approach to it. And simply internally, there’s that resistance to change that I mentioned earlier. Some lawyers, I would say, look at it and say, “Well, you’re now asking me to do an additional task. I’ve got to work out how to use this thing. It’s asking me to do these things. I’ve got to input this. I don’t have to do that now. It looks like it’s extra work.” 

John Kelsey: 

But I think most of them very quickly realize, now actually this is saving a huge amount of time and it’s just… The tools now, I think, are also not just intuitive to use, but they’re kind of attractive to look at. It just gives you a better visual representation of what’s going on in the deal. And that’s only a good thing. 

Bob Ambrogi: 

Jeff, did you want to say… I’m just curious. I mean, you have pretty sophisticated investment clients. Are they aware of this software or this technology and are they looking forward to be used? 

Jeff Laretto: 

Yeah, so it’s actually interesting. I’ll start with a couple of thoughts that are kind of dancing around this topic. We’re an expensive firm and we compete with a lot of [inaudible 00:28:31] that try to out pitch us on fees. And part of our true marketing is that we embrace technologies to enable us to move quicker and actually absorb some of what appears a sticker shock for billable hours. And that’s how we deliver more value in deals despite smaller companies charging lower fees. It’s the embrace of all types of technology. We’ve had big clients, some of our biggest clients drive us towards founding additional products. 

Jeff Laretto: 

Our firm code developer developed a product called Loophole, which is about collaboration coordination over many matters for large, complex clients. And that’s part of the equation. And then something like Litera on the backend is how… I don’t have enough clients yet that are sophisticated enough to understand what that means for them. But what I tell them is this is going to enable us to deal with your 150 investors and deliver a deal that costs around 50 to 60,000 versus any other firm where they’re using manual resources might deliver that at 80 or 90,000 even with a lower billable rate. So it’s part of the marketing sell, but there is push from clients for certain types of collaboration software out there. 

Bob Ambrogi: 

What about the adoption question is actually a question from somebody in the audience about how do you drive user adoption for more senior users who don’t trust technology and feel that the way they’ve been doing transactions works just fine? 

Jeff Laretto: 

John, I’m happy to jump in on this one because I think this is the million dollar question. Adoption is remarkably challenging at any big organization. And for the reasons that the user identified, people are set in their ways, they understand processes, they don’t adverse to change, there’s risk. Adoption is a hard problem to solve. I have a view on how it works and I’m not a tech consultant for the firm. I’m a lawyer. My view on adoption is it needs to be both grassroots at some level and top down driven at the other level. And the way to convince somebody to try new software is to hold their hand, but also show them a use case that creates an aha moment for them. Where he or she sees something that takes six or seven hours typically, and it can be consolidated or condensed into 30 minutes. 

Jeff Laretto: 

If you can show that person that use case and say, “Try this software for this specific use case, but do everything else the way you do it, you will start to get adoption of the product.” Interesting, I talk about Litera Transact real briefly. I actually initially used it just to deal with signature pages. The platform does a lot of stuff beyond that, but I found the use case that solved the most of the pain was signature pages. And when I try to get people on my deals to use that, I try to focus them on that solitary use case so they get some familiarity with the platform and then we start to roll out more features as they build up sort knowledge on the platform. And I think that’s a good lesson for any type of legal software adoption. 

Bob Ambrogi: 

Mm-hmm (affirmative). John, what have you seen in your firm in terms of adoption? 

John Kelsey: 

Yeah. I mean, in terms of trying to get those senior people you mentioned to adopt when they’re maybe stuck in their ways, well, you could always try hitting them in the pocket, measure profitability and reward profitability. They’ll soon get the message that way if they’re not otherwise prepared to be convinced. And, again, if you can get clients to adopt it, that’s another good obvious way of saying, well, they can see maybe other clients, other partners or whatever. Our winning work as a result of this and being more profitable that should hopefully convince them. And obviously, take the admin and the tedious part of the deals out of the equation by using the technology, allow it to focus on more creative and better use of their time. 

John Kelsey: 

So I think there’s a lot of those. I mean, but ultimately you’ve got to have a leap of faith with this. And if somebody’s closed-minded enough, then maybe just concentrate on those more open-minded types. But I would say if you’re really driving it, then just expect to have to repeat, repeat, repeat. People will take time to get used to it, but usually eventually the penny drops and we’ve had plenty of examples of others going, “Don’t need this, don’t need this.” And then they get there. Yeah. 

Bob Ambrogi: 

Emma, were you going to say something on that? 

Emma Vertigen: 

So adoption is like my bread and butter. This is my joy and I love hearing you guys talk about it like this because I agree a lot of the principles that you’re touching upon are what we deliver from our team. And it’s really just starting off simple, right? Start off simple. If you’ve got someone who’s resisting, they might not be your foot in the door to getting into that practice group. You need to find the Jeffs and the Johns of the world. And Jeff’s actually a bit of a celebrity at Litera because of his approach to adoption when he actually delivered some of his own trainings. Which was just amazing because what you’re doing there is you’re taking the tech enthusiast or the person who’s open to trying new things and then you are showing the people who maybe are a bit more resistant that it’s safe. 

Emma Vertigen: 

And really what we’re trying to do here is the reason that person is resisting is because they’re familiar with what they’re doing right now. And they know they think that’s working as is. And what we need to do is to get that sort of mainstream adoption is create a safe environment and that needs to be done through a wider infrastructure, involves clear documentation, clear internal processes as to how they get started, who do they reach out to for help. Clear communication from people like Jeff about what is the messaging here? It is safe. It is easy. You are supported. You don’t have to… You’re not trying this on your own. It’s not, “Hey, log onto this and good luck with your first deal.” It’s, “We’ve already done this at Cooley or Simmons or any firm. You’re not the first to try it. It’s already been documented out for you and here’s how we’ll do it.” 

Emma Vertigen: 

And I think that that is how we need to bridge it with someone who is a bit more hesitant because they’ve been doing it a certain way they like it. And then part of that is documenting the value and then hopefully that helps. 

John Kelsey: 

And I would just quickly add, what we found is that it was obvious to us this matter deconstruction process I mentioned earlier, it became very obvious there was a quick win. But then we didn’t really have the data to scientifically prove it, if you like. So we had to build in a process to then measure it. And so kind of that’s a worthwhile exercise. It can be a bit painful depending on your systems, but we thought it was going to be essential to really prove that we’re going to get value out of that. Obviously this technology is not free. Sorry, Emma. But it can be relatively expensive. You’ve got to work out how you’re going to recover that cost, not just the actual licensing cost and things, but the cost of implementing it. 

John Kelsey: 

So get your data, your financial data in order, and you can benchmark and very quickly prove going back to then what benefits you get out of this? You can then prove and we can see we’ve tracked since… I think we started in 2018/2017/’18, and we very quickly had a data set that we could prove we were reducing costs, therefore improving profitability. So I’d do that. But I would say there’s one slight cautionary point, which is this technology also creates a very high level of transparency. And sometimes that can be seen negatively by lawyers who like to hide behind a mystery of what’s really going on. And all of a sudden, the window is open. People can see exactly what’s going on very quickly in real time. And you’ve got to get over that bit. So expect that to be a bit of a concern, whether it’s articulated in that way or not, that’s likely to be the case. 

Bob Ambrogi: 

Too much transparency. 

John Kelsey: 

Yeah. 

Bob Ambrogi: 

Another, I guess, cost aspect to this is staffing. And there was a question from someone in the audience here about how does using this technology change utilization of juniors or paralegals? Do you find lower staffing needs or similar staffing levels with new responsibilities? 

Jeff Laretto: 

I can jump in on this one. Sorry, John. We’re still in the first inning of what is a 9 or 13 inning ballgame in terms of revamping processes to leverage the best in class technologies. And so we have not solved any staffing needs or reduced any staffing needs yet on deals. I would think, for the past few years, we’ve been continuously under the water with many law firms on just keeping up with the deals we have. And so the hope is that this actually reduces stress level in the cushion of work for people so they can actually have more manageable life. 

Jeff Laretto: 

Down the road, we’re thinking about the secondary and third scale solutions and how we would adopt our process to accommodate and thinking about things like, are there dedicated roles for people separate from the traditional paralegal or trainee roles to help manage parts of deals leveraging technology sets? We haven’t really thought through that fully, but that’s where we think we might be going in the future. At least we’re considering that. And I think that’s where firms are going to have to think about where they go in the future is the current paradigm of trainees, attorney what have you work or do you need to rethink how these services are delivered and the billable model as well? 

John Kelsey: 

Yeah. And the data set I was talking about, too. We looked at our profitability model, which assumes the traditional model that you have sort of pyramid shape of resourcing. And therefore the more you can push it… The idea was the more you can push down, the higher profitability. What the technology does, depending on how you use it, at the moment at least, reduces the amount of work being done at those lower levels. So it is completely counter to that profitability model because we measured our results and yes, we were more profitable on the matter as a whole. But when you look at the resourcing, these more senior people are doing more of the work and the juniors, unfortunately, in a career sense and perhaps not helping the profession long term means the juniors have got less to do because we now have more partners and senior council doing more of the work because they don’t need to keep passing it down, passing it down, because it’s really quick. 

John Kelsey: 

So just today I was working on a transaction with a colleague, a junior colleague, she’s off on holiday today. So I had to run the call. Thank goodness I had my online checklist because otherwise I would’ve been really in deep trouble. I run the call, made it sound like I knew what I was talking about and knew what was going on, because of all the notes there, is all updated during the call. And she wasn’t even on it. So you could then think if you take that to a logical conclusion, that means that should happen on all deals, which I’m not advocating. There’s only so much we can do, but it is an example where traditionally would’ve had 3, 4, 5 people maybe on that call ended up with 1. So it does have a resourcing issue. 

Emma Vertigen: 

I will add a silver lining to that for the juniors or the paralegals. We worked with a team recently of paralegals. And actually we were asking the exact same questions. How have you found your workload? Because we also hear that as well during demos or trainings like, “Is this going to usurp me?” And actually we are hearing that they just get to do a lot cooler work. They’re really enjoying the work. Before, they were just almost just seen as support staff. They weren’t doing anything, they didn’t understand the context of the deal. They were just given things to the side and just processing on the admin side. 

Emma Vertigen: 

But now they are actually helping run the checklist on the system. And it’s all contextualized because even the signature pages and everything they’re taking through to the closing is seen in the context of the checklist and the over overarching deal. So I think it’s more interesting or that’s certainly what we were hearing from this team. Whether that applies to everyone and whether people want to [inaudible 00:41:18] that sort of a technical side is a bit different, but I think that that is the way the world is going. 

Bob Ambrogi: 

I want to just remind people in the audience that we’ve got just close to 15 minutes left here. And if you have questions, go ahead and get them in and we’re going to take them up. But a couple of things I wanted to ask about. Somebody had actually asked earlier saying, “You convinced us that we could use software to improve our efficiency and performance. Will you be suggesting specific software programs for us to consider?” While we did not want to make this an infomercial for Litera, as there have been several references to Litera Transact, I think it’s just worth mentioning that Litera Transact is a product that really was based on two products. Litera acquired a couple of companies a few years ago, Doxly being a US-based transaction management platform. And Workshare Transact, a UK-based company. 

Bob Ambrogi: 

And the current Litera Transact is, I’m not sure if it’s quite a mashup of those two, but is derived from those products. There are others out there on the market and you can Google it and find other names. But, Emma, I wonder if it’s worth just kind of addressing kind of more specifically than perhaps we have, what is these technologies doing? What are the components of a transaction management platform? We can show it, but what does it look like? 

Emma Vertigen: 

Yeah. Why don’t I break it down by modules to help visualize so that you have a sort of a working group list where you set out everyone who’s in your deal, what roles they’re supposed to be doing for this. And you can choose to invite them in or not. Of course we like it to be collaborative as we’ve touched on today, that can help alleviate the workload when people are accessing it themselves. We’ve got built in data rooms. Again, if your type of deal needs is optional, you don’t have to have it. But if you want to have an add on data room, you can do for your due diligence. We’ve got a checklist. Again, that project management part of it coming through, you can assign status labels, responsibilities. You add in the status of the items, the documents themselves, you can run the comparison of the documents and then you can take it through to approval if you need to get sign off for a document. Do you need lender approval before you go through it to signing? You can absolutely do that within the system. And, again, helps that tracking. 

Emma Vertigen: 

And then finally you can go through to your closing. So getting your signatures ready either you can do it offline on yourself or you can do it within the system, get those pages ready, send out those signature packets. And there’s a really, I was going to say sexy table, where you can track all those signatures as they come in and make sure you are… It gives you that real sense of comfort knowing that you’re going to go to that completion and everything is there, which I think can sometimes feel in a traditional way of working. It certainly feels more like that in the last 24 hours of a deal. And of course you can create your closing binders as well. So it’s really a click of a button and all those documents, those final form documents, are brought through to your closing book. If I’ve done that justice. If there’s anything else that you wanted to draw out, but I think those are sort of the main modules for now. 

John Kelsey: 

I would just add to put a bit of color on it from a user point of view. I would say in terms of adoption, again, going back to that point, it’s probably best to start with transactions that are fairly well… There’s a well [inaudible 00:44:51] path. You know what the structure’s going to be. Should be a fairly consistent process and documents, things like that. And then work on that. You get used to it, and then you can start to be a bit more creative thinking and using it for a deal that’s quite bespoke. You might not know all of the parts of the deal at the outset. You can build up and things like that. But I would say, yeah, start with a relatively straightforward transaction. Then get to use it. 

John Kelsey: 

And I would also say a neat feature of it is you can still be sort of old school. So whilst everything’s online and all that sort of stuff, you can still send out either a Word document or a PDF by email for those Luddites who are out there who say I can’t possibly go into a website and work it out for myself. I need it delivered on a tray in your inbox. You can still do that, which I think for any product kind of mimicking an old school way of doing it can really help. 

Emma Vertigen: 

I think that’s an important point to make as well, because even if you have appetite to get onto the platform and your client doesn’t, we need to be able to hybrid that. So you can still get the benefit of it and then choose to invite them in or not. And, again, maybe the first time you’re using it, you want to just try it yourself first become, an expert and then invite a client in. A couple of times I have actually seen people go really bold and just open it up on the first deal. And if you’ve got the appetite for it, go for it. We’ve got the support to help you. But I think the vast majority try internal first. 

John Kelsey: 

Yeah. And to be fair, some, particularly banks who just have a wall of pain to get through from an IT perspective. We do still have some bank clients who just say we can’t get access to the site because our firewall doesn’t allow it, things like that. So being able to mimic that old school way of doing it, I think, is essential with any product. 

Bob Ambrogi: 

I’m wondering, Jeff, perhaps you could take this question of how might this technology further involve, is there… Evolve, not involved. Is there a possibility of applying machine learning to deal rooms? Again, I know, I know Litera just acquired Kira, which is that’s what they do. What are the possibilities for continuing to develop this kind of technology? 

Jeff Laretto: 

I mean, it’s a great question. The possibilities are endless. There’s going to be challenges there. And I think what you’re going to see is an evolution of different types of vendors coming up with different software to solve different types of problems. And then you’re going to see interoperability issues. You’re going to see adoption issues, what have you. Soup to nuts on the types of deal I do, you’ve got drafting informing documents, you’ve got collaborating with the client, you’ve got diligence, and then you’ve got execution and closing. And I use Litera for the execution and closing. I use Cooley GO and Cooley internal docs for the mid phase. And our firm uses Loophole for the communication and collaboration part. What we don’t have yet, because I don’t think anyone’s really embraced it, is the artificial intelligence due diligence component. I don’t think we’ve ever tried Kira. We do have some software and pilots with other vendors that we’ve been using to try to get a better sense of that. 

Jeff Laretto: 

Those are all going to be components of the broader picture. And the thing you got to realize is each one of those tools takes a knowledge base and somebody has to be trained and understand it. And that is the challenge of adoption. And how do you institutionalize that knowledge? We have a lot of paralegals that have learned platforms and then they leave and go to law school and go to different firms. And then we get new paralegals that don’t know that. And so that is a hard problem to solve. 

Jeff Laretto: 

In our firm, a lot of people that use Litera have now moved on and leaving people like myself as some of the most knowledgeable people on the platform. And that applies to any technology we roll out. So your adoption scheme has to both solve IT’s issues and concerns, solve your client’s issues and concerns, get people to try the platform and then institutionalize the knowledge about how to do that. None of those is an easy problem to solve in if itself. And you add all four of them together, it’s challenging. But the software is getting better by the day. And the case for deploying it is getting more compelling by the day. 

Page BreakBob Ambrogi: 

Yeah. John, remember any thoughts on that question of what might be next or ahead for this kind of software? 

John Kelsey: 

Yeah. I mean, machine learning, data extraction tools, things like that is a massive topic obviously all of its own. I mean, we’ve decided… In 2019, we bought a legal engineering business in the UK. It was the first legal engineering law firm. It’s called Wavelength. And so we now have our in-house data scientists most of whom have been lawyers. I would say it’s specifically not an IT thing. So the guys who are running the IT department, making sure that Outlook works and whatever are possibly not the right people to run these things. Hopefully, I’m not offending anybody in the audience. So we found, I think the key to this is having that bridge between lawyers and the real hard tech side of things, that sort of data science and things like that because you’ve got to have that translation between what the tech can really do. 

John Kelsey: 

But I think there’s obviously a lot of solutions out there. A number of those solutions don’t actually have problems to solve yet. And so you’ve got to be a bit careful about what you adopt. But I think what we are seeing is that we’ve got to, as lawyers, change the way we do things in order to make the information that we’re dealing with on a daily basis much more usable. Having structured data, which the current software and softwares we’ve been talking about does provide that. Then you can really harness it. Let’s use that data. You could work out all sorts of things, which would be helpful not just from a legal practice perspective, but from a business perspective. And we’re in the infancy of doing that right now. 

Emma Vertigen: 

I mean, I’m sure you guys have followed the Litera acquisition, but you can see that that’s obviously the move that we go to, too. The practice of law is one thing, especially from transaction management. Yes the features that we can incorporate and integrate with from the lawyers’ perspective, but it’s also that business side. So it is using the Clocktimizers of the world and making sure you are getting that billing recording down and hitting that budget of that team. But also then feeding that information back to something like foundation where you can then structure all of your future deals based on that information. 

Emma Vertigen: 

I was having a chat with Haley Altman yesterday and she was giving me a really cool example of what we could do with Kira in theory, which is not just for due diligence. What if you could use that to read through your closing binders for your deals to then feed into foundation, to then structure an ideal team like who should resource it, what time it would take, how many turns of a document would that entail? What we can do from a transactional management perspective is so much more than just the clicks for the lawyer. It’s that whole business piece behind it, too. 

Bob Ambrogi: 

And Haley was the founder of Doxly who is now with Litera as the… I forget what her… Vice president or something? I’m sorry, Hailey. I forget your title. 

Emma Vertigen: 

Chief M&A Officer. 

Bob Ambrogi: 

Thank you. Thank you. There are a couple of questions that are kind of related to this technology. But one of them has to do with a question of does this technology open the door to something like an M&A support lawyer role in a firm? Much like litigation technology opened the door to litigation support managers in firms? Which is kind of an interesting question in and of itself. And there’s another question here saying, “I’m a junior attorney looking to get into transactional and a deal oriented role. Any advice for steps to take to demonstrate my capabilities and ambitions in this area?” So does this open opportunities for legal professionals who are knowledgeable and experienced in using these technologies within firms? 

Jeff Laretto: 

[crosstalk 00:53:25] I can jump right in. I’m actively looking for somebody who wants to get out of a attorney practice role and take a adoption role executing deals. I actually call it a deal execution specialist. And it’s us trying to think outside the box, how can we take somebody out of a traditional capability, flip the business model and then make them a specialist in something that supports people versus making everybody an expert on using any of these software platforms? So I think there is an opportunity there. I’m not sure if it’s going to be a push, people pushing their way into the firms to do this or a pull from the firms. But people are starting to think about that in the firms and how the costs are to work for those people. So that’s definitely true. 

Jeff Laretto: 

As to the second question, I think any junior attorney seeking to evolve themselves in their firm is always benefited by having more knowledge about cutting edge trends. I don’t know if that’ll be particularly persuasive in the context of any specific firm, but it certainly can help to say, “Hey, these are the cutting edge technologies that could help us redefine how we’re doing things,” as a way to show your main interest in that space. And if a young associate came to me and said, “I like X, Y, and Z,” assuming I could get my IT function on board with that, then that’s something that I would embrace because I’m always looking for the next big thing. 

Bob Ambrogi: 

We had several poll questions we never did. I’m not sure we need to get to those, but there’s one final one that maybe we can come back to at this point and see if perhaps this program had a little bit of a impact on some of the people attending. So if we could put up that number four poll question real quick and get some feedback from the audience on it. And that one is how do you see your usage of transaction management software developing? Apparently we did a pretty good sales job here, I guess, today in terms of convincing people. Some 63% or so say they want to start it. Another 26 or so percent say they are going to increase their usage, which suggests they’re already using it. And 4% say they will continue to use it as they currently are. And 6% are holdouts, I guess. They will not use it, but that’s okay. That’s okay. 

Emma Vertigen: 

We’ll get you later. We’ll get you later. 

Bob Ambrogi: 

They just accidentally clicked on the wrong button. They accidentally clicked. I know there are a couple of people asked about demos. I think they were answered privately about that. Again, we don’t want to make this a infomercial for Litera Transact. But you can go to the Litera Transact website, I’m sure, and find out information on getting a demo there. We just have a couple minutes left and I thought maybe we could just kind of go around with the panelists and get any final thoughts you have on the topic today. And, Jeff, you want to kick us off? 

Jeff Laretto: 

Yeah, I’ll just start with a message I delivered to our summer interns this last summer. We had about 100 or 150 of them. And I basically said, “The future of our firm is going to rely on embracing these technologies. And a lot of that’s going to come from grassroots initiatives.” So this is a chance for young attorneys to embrace these technologies and become thought leaders within their firms and bodes votes well for their career development. So it’s not only going to be rewarding, but it’s going to be necessary. 

Bob Ambrogi: 

All right. John, how about you? 

John Kelsey: 

I would just finish maybe with the swan metaphor. Apologies if this is more of a UK thing, I don’t know how well it translates. But it’s that swamp metaphor where you are gracefully moving across the water looking like it’s very easy, but paddling furiously underneath. That’s what this kind of technology allows you to do. So it’s not going to take all the work away from you, but it’s going to make you look a lot more slick. 

Bob Ambrogi: 

I like that. And last but not least, Emma. 

Emma Vertigen: 

And I guess mine would be obviously we’ve talked about adoption a lot today and moving on to something new can be daunting. But just to sort of reassure you that whatever vendor you go for, this is a software as a service now. So it’s so much more than just this platform. It comes with teams. My team, I think we’ve got a fun fact that’s about 140 years of experience at law firms as lawyers or paralegals. So we can help with that transition. You wouldn’t have to do it on your own. And we also have your own legal tech teams, too, who we work in partnership with. 

Bob Ambrogi: 

All right. Well, again, reminder to the audience that your link that got you in here today is good to get you back in here if you want to re-watch this webinar at any particular point. Thanks so much to the panelists for taking the time to be with us today for part of this program. Thanks to both Litera and Above the Law for sponsoring and producing today’s webinar. And thanks to everybody in the audience for participating. That ends today’s webinar. 

Speaker 1: 

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