Using AI to Save Money and Win More Trials with Shawn Arnold and Clayton Romero of Codex Ten

Nov 2, 2021

Patrick Carver

Hi, I’m Patrick Carver / CEO, Constellation Marketing

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Welcome to the Optimized Law Firm Podcast, where we chat with legal pros who can help you run a more profitable and enjoyable business.

This week we’re talking with Shawn Arnold and Clayton Romero of Codex Ten about how small and solo law firms can use AI to save money and win more trials.

eDiscovery has traditionally been a tedious, time consuming, and expensive process that can be prone to errors.

Shawn and Clayton share how some new innovations in legal tech are revolutionizing trial prep for law firms of all sizes. Listen in to hear how you can automate more and increase your revenue.

What’s in This Episode?

  • Who are Shawn and Clayton, and what is Codex Ten?
  • How can an eDiscovery tool and partnership help law firms save time and money?
  • Where does an eDiscovery solution fit in the discussion of mitigating risk to your firm?
  • How can leveraging systems and tools give you an edge over the competition?

 

Episode 2

 

Patrick:

Tell folks a little bit more about what Codex Ten does.

 

Codex Ten:

Sure, so Codex Ten in short, helps attorneys get through their docket review process faster and more accurately in order to get to basically the rest of their case load.

 

As Shawn was talking about, this technology hasn’t been available, nor have these workflow has been touched in the last…probably 10 years for the mid-sized boutique size or smaller law firms, just because they haven’t had the time.

 

And sure, these guys have a lot of plates to spin, and for the most part, they’re pretty comfortable in the profit that they’re making.

 

The problem is that behind the scenes, data has been growing at an exponential rate, and the American Bar and the US government have been working very closely with each other, looking at not only the data landscape, but also the threat landscape and how these things are impacting consumers, so they’ve gotten very, very strict about how discovery has to be handled, how review has to be handled, how client data has to be handled, and so that’s really where we came in as we go, look, you have to have this extraordinarily deep and esoteric knowledge of the industry and of the technology to do this properly.

 

Attorneys don’t typically have the time to go in and learn those things, they already have their own set of esoteric knowledge that they focus on, so to ask them to basically go in and get another degree isn’t terribly reasonable while they’re also practicing law, so we can come into a law firm and give them that expertise. It’s very turnkey in that way, so any firm that needs that help — and they all do — they can come to us, and we handle everything from the evidence collection to the data, handling data, storing that stuff from a client standpoint.

 

They no longer have to worry about the housekeeping, where do these things live? Are they secure? Hey, opposing council, send me that thing. Did my client give it to me in the correct format? Invariably, the answer is no, they didn’t… Did I get everything out of my client that I needed to get or are they trying to… Well, meaning, obfuscate what things they should or shouldn’t send me… Well, frankly, your client doesn’t know what they’re talking about, they’re not the legal expert you are, so wouldn’t you want to have all of that data? So you can make the choice of what is and isn’t responsive… Right.

 

Likewise, what is it? Is it privileged? I got into an argument, a discussion, heated discussion with one of our clients, talking about how privilege between he and a sibling… That’s not privileged communication. That’s a whole other set of things you like that doesn’t qualify… That’s the kind of thing that attorneys are dealing with, is these clients who don’t know any better. We can come in and help them with that.

 

Likewise, anytime that we get a client who then goes into any of their ESI orders where they’re now starting to have these discussions with opposing counsel about their Rule 26, talking about how are we gonna handle discovery, we come in and start giving them the translation, we do away with any of the confusion about what they’re saying, We need this in a natural format versus native format, or we need to go through and these things across in PDF versus not PDF, we help them understand all of the different restrictions and impact the long-term impact on why they would or wouldn’t want something in a particular way.

 

And you walk that line so that it is best for everyone involved, so that our clients are not giving away any more information that they truly need to, while at the same time receiving the information that I actually want or opposing counsel, it is a real pain to have to go through a 7-000-page PDF and try and find individual records, and that happens so often, it is not even funny, and that’s an expensive thing to have to go through and do…

 

We will handle that for clients in the event they ask us to, but that’s a professional services charge, and that’s not cheap, you’re looking at roughly 50 hours worth of work to go through and split up a 7000-page document into its constituent parts, rather than… We can just come in in that initial conversation with opposing counsel and say, No, we need those as the individual pdfs, and now we’ve saved 7000 for our client and their client. That’s a big impact.

 

Yeah, and well, one other quick thing too that… Sure, and that’s all very high order, but also at a really, really basic level, the work associated with doing doc review and e-discovery is incredibly tedious, it is time-consuming, it’s fatigue-oriented, because you have people that do this work and they literally get handed buckets of stuff and say, “Here’s 10000 pages, go find the four pieces of information in these 10000 pages that are relevant to what we’re doing right now.” Right, it’s not easy work.

 

This makes it infinitely easier, so while the attorneys that generally, that are doing the lawyering part of it, case strategy…by the time they get it, this is usually already done by other people in the firm, the other people in the firm are working really, really hard, right? To do that, the platform in and of itself makes their life infinitely easier. And again, not to say that they don’t have to work hard, but they’re working, they’re working hard from an output standpoint will be 8 times as much, 10 times as much because they can do it faster, they can make less mistakes because they’re not worn out from having done this manually.

 

It’s just an incredibly… It’s an accelerator, it’s like a catalyst, it’s like throwing gasoline and we’re putting an engine additive into where… It just speeds things up. The analogy I use all the time is a law firm’s job is cutting down trees, they’re in there swinging an ax, and they’ve done that for 50 years, and they’ve built a profitable firm and everybody’s doing really well singing an ax. So sometimes it’s really hard to go, Whoa. I walk in with a chainsaw and the initial thing is it’s like… I don’t know what that is. It looks neat, but I’m doing really good swinging an ax, and it’s like, Yeah, but if you could cut down two trees a day swinging an ax, what if you could cut down 20 trees a day with this chainsaw…

 

Doesn’t that make more sense? And sometimes that’s just, it’s purely… It’s people that are working really, really hard to get this much output, and the tools and services make it to where they can get that for much easier or work the same amount and be able to process infinitely more… Infinite and infinite, not infinite, but a large multiple, more amount of data.

 

Patrick:

Sounds like from a layman’s perspective on this, that you just have the ability to use software automation technology to cut down on what is traditionally a labor cost, and there are other benefits to it as well associated with that, which is something that we look for in our business, and I think law firms can benefit from it as well, do you think that… I know you guys work with a lot of bigger firms, larger firms with big head counts, huge discovery processes… Do you think this type of thing can help smaller law firms as well and solo firms?

 

Codex Ten:

Hugely, hugely. Part of that is from a compliance point of view, these guys, the ones you choose to shops, the solo practitioners that I’ve got, maybe three of my law firm buddies, we went up and we started a law firm, we got 15 staff now and we’re just handling cases as we can and them, I don’t have the money to hire a compliance person to help keep us in check and help avoid getting Bar sanctions, getting the opposing counsel the ability, because we made a mistake, we didn’t know we operated out of a portion of ignorance and have opposing counsel now requiring us to pay attorney’s fees, now that’s a risk for malpractice, that’s a huge additional cost for my client. That’s not good.

 

Those small shops have an even bigger impact and it’s actually cool because Sean likes to say this technology is so retreated to the field, you’ve come back to the field, the field of shrunk… I’m bad about the term, but in essence, it’s become cheap enough that these solo practitioners can afford it, and it’s allowing them to take a chunk out of a market that was traditionally only available to the big shops. Dentin has a massive multi-million dollar budget for development and for coders, these people have software developers on staff to custom build tools to do these things, the guy who has his injury practice and he’s got five staff, doesn’t have a million dollars to throw at development…

 

So having services like ours, having software, like the platform we’ve specifically chosen is Everlaw, having platforms like that available to them gives them such a competitive advantage, both from a flow of work, but then also to expand the business and minimize the risk, which is really, really important

 

Well and the thing is… The workload for a case is the workload for a case. That’s sort of like, granted, there’s maybe a lot more at a 300 headcount firm, for example, at a 500, there’s a lot of resources behind that help the attorneys working those cases.

 

When you have a case come in, you’ve got a guy that’s probably leading, he’s got maybe a team under him that involves maybe some junior attorneys and probably some lit support people, paralegals, that structure exists, but the workload to process the case is kind of the work later, process the case. Now, you might… The only caveat is sure, like if you’re a firm that’s gonna take on a class action, it’s got… The class has got 50000 people in it. That might be something that a little firms just wrong, but for the most part, a complex case, when we talk about complex litigation, meaning there’s multiple custodians and parties that can happen at a single shop level or at a big level, you could get a case that’s got lots of people involved. And lots of data.

 

So the thing really for us, and the way we built the model this way is we actually had the small to mid-sized firm in mind, because the way that we’ve constructed the pricing around this and the way the case is it’s very consumption-oriented and very modular.

 

Most technologies, there’s this sort of get in price, which is where that hurts a lot of small firms. Back in the day, if you wanted to run a big huge discovery platform, it’s like, Well, I gotta stand up servers and I gotta have people to run it… And I gotta have tech people and it’s gonna be quarter million dollars just to even get in the door. Right, and then I can’t do that. I got two attorneys, five attorneys in its end, half are a million dollars… Half a million dollars on this thing. I can’t, right? It’s not positive.

 

Our platform is Cloud-based. It’s based on consumption, right? Effectively, how many cases do you have? How much data in it? So it’s 100% controllable in a sense of if I’m a single guy or three guys and girls, or four or five or whatever, a case in the case, and we price it based on that, so there’s not really a cost barrier from that perspective, and frankly, the feedback we’ve gotten to this point is, is relative to the overall cost of the case, our cost is…

 

It literally is negligible. It’s not even in the stratosphere of decision-making, it’s a rounding error in some cases, right, depending on how these billings go because it’s not overly expensive, so… And I can tell you this, if you wanna look at value versus price, it’s insane, ’cause we are talking about 10 times faster, reducing the error rate by a factor of about seven. These are real numbers that we’ve got now from doing this for a minute, these are not pulled out of the air.

 

It’s literally 100-hour discovery in 10 hours, 500 errors on a case, being more like 15… Those sorts of things. And for not having to spend a ton of money.

 

I honestly, the biggest thing that firms I think need to think about is, is most of the time I feel like the barrier for entry is two things.

 

Number one, they’ve done things one way for a long, long time, and change is not… People don’t like to change, especially if they’ve been successful with how they’ve done it, and just the idea of what that looks like from a change in process standpoint, and it’s weird, it’s one of those things like it’s hard to… We see the end result, and it’s very difficult in our mind to say, I understand why you’re resistant to change, most people are, but once you get comfortable and everything gets rolling, you’re gonna run at such a faster speed that you’re gonna look back and go, “Oh my gosh, why was I so resistant to making that change and innovating…?”

 

The other analogy I draw… It’s like when someone shows up with email and you’ve been physically typing letters and sticking stamps on envelopes and throwing them in the mail, and then someone shows up and goes, Hey, I’ve got this thing I can put on your PC where you can just type in it and they’ll go where you want it to go.

 

It’s kind of like them going, I don’t know, I’ve been writing letters for my whole career, this seems a little silly, and it’s like, What does… Until you get it and then you’re like, Oh my gosh, this is great. It takes me 10 seconds to message as opposed to 10 minutes and the travel time, whatever it takes to get wherever.

 

So it’s really, it’s very transformative at the workload level, and I think it’s also acquireable from a price standpoint, which is also the big thing because most, even solo practices will tell you like, I’m eating what I kill over here, man, I don’t have just buckets of cash laying around… You know what I mean? To do stuff.

 

Patrick:

Yeah, but it sounds like you guys are doing something a little bit different than traditional e-discovery or maybe what’s been done in the past where you’re able to come in and do maybe that one big case that is gonna require a ton of discovery within a firm.

 

Even if it’s a criminal firm, they do DWIs typically, most often, but they occasionally get that death penalty case or something like that, and this seems like a really good solution for that type of situation where you can get to know the tool.

 

You guys kind of take them through it, set them up, and then they have this big hairy task that they have to go through thousands of documents, you can help expedite that, so even on a case by case basis, it seems like there’s a lot of value, even if it’s one big case a year, you’re still able to save a ton of time, and not have to bring people on or hire out discovery agents to come in and look at all of it.

 

Codex Ten:

Yeah, it’s actually one of those things that has been fun to get to show attorneys. I actually had an attorney yesterday, he’s been in the case for a little while now, and we were just talking about his production.

 

And he goes, “You know, I don’t know that I can go back to how I was doing it before, after this…” Well, I don’t feel bad about that, to be totally honest, because how you’re doing it before was bad, so there’s this moment that I think a lot of attorneys, once they’ve accepted the fact that there’s that initial barrier for entry of changing one’s habits, once that barrier has been crossed. They don’t know how to go back to how it was before because so much, not only is it faster and less risk-prone, but it’s also more comfortable, they don’t have to have all of the stuff that they had traditionally have stored in their heads, and then every time that their staff comes to them and talk to them about a given thing… I take your point about a criminal case, those things run day in and day out, okay, so it could be 3 AM and you’re trying to hit some deadline because… Of course, you’re trying to go through and review 12000 records to save someone’s life, or conversely, to make sure that someone who is a horrendous murderer stays in prison.

 

These things… You don’t wanna have to then go and bother someone else at 3 AM to go ask your paralegal for this thing, ’cause she’s not gonna pick up the phone, or he’s not gonna pick up the phone because they’re asleep. You wanna be able to have that evidence at your fingertips, and with tools like this, you can.

 

You can put all of that information that you’ve stored in your head, the case strategy, the task delegation, all of your thought processes, they go into tools like this using workflows that we’ve built, we’re helping you through those from a case strategy standpoint, best practices that we know work across various types of cases, various types of industries, this improves case results for the attorneys for the clients, hands down, and across every possible industry, it just improves outcomes period. It doesn’t get better than that.

 

Codex Ten:

And let me attack one other little thing that’s a little bit of a misconception, even with the attorneys… Right, so I know what you’re driving at.

 

Right, personal injury is a great example, there’s a fair amount of those cases where the process of handling those cases is pretty rote and defined. Like a car accident, a basic… Not catastrophic, it’s an injury, someone’s got some medical bills that need to get taken care of, you know, they don’t have thousands of pages of…

 

They know I need nurses notes, I need the intake report from when they went in the emergency room, I need the specialist saying “This happened.” I need to pull a bunch of receipts from bills, and we’re gonna send some letters and eventually someone’s gonna say, We’ll give you three grand or five grand or something, and you know… Yeah, that’s not a great… But I think there’s a lot of room though, between that and what we’re I think calling a big case, because one of the things we see is attorneys go, “Well, that’s not big enough to really put an e-Discovery process in place for…” Well, it is, right.

 

I think there’s a misconception about what that means, there’s still value in smaller cases, ’cause we do talk about things like 5000, 10000, 50000 documents that happens, but 2000 documents are still a ton, 1000 documents, and that could be one email box when we say documents. If you get six months worth of email and discovery, that’s gonna be a 1000 record really just by itself.

 

Codex Ten:

Case in point? 227 pages from a case the other day resulted in 6350 pages. So that’s how those things balloon… They balloon very, very quickly.

 

Codex Ten:

So along those lines, another thing I just wanna point out, because there may be people that listen to this that aren’t overly familiar with the sort of e-discovery services model, and especially if they’re smaller and go, “I’ve never considered that ’cause it’s probably really expensive.”

 

We’re not just a software business, we’re not in here trying to throw tech at it where we just, we show up, you know, and drop this bomb and you’re thinking, Oh, here’s this great tool, and then we run off… Scurry off into the dusk. We’re actually also providing litigation support services, we’re a services company that has a tool… Not a software company.

 

So again, with it being incredibly affordable, it’s a firm that’s got one to five people, where we become the lit support department, it’s something that they wouldn’t just hire out because it’s burdensome, right. It’s just like it… Most firms are like, I’m not gonna hire for lit people, I’m just gonna go find a shop that’ll do it for me for some sort of fixed monthly rate. We come in and say, “We’re gonna give you the tool, but we’re also gonna empower with the tool, we’re gonna do some of the work. We’re gonna be with you throughout the process.”

 

So when you’re working cases, and you’re trying to… It’s like, Oh, I need to run a mass redaction or I need to do these things. I’m not sure they’re not having to run off to the internet and look for a YouTube video that shows them how to use this software, they’re just calling us and saying, This is what we’re trying to do, and we go, great, and we jump on with them in a screen share and go, It’s click, click, click, and this is how you run it, and you’re good to go. Or we need to produce productions for all these different places, and we need to make sure we’re not sending out privileged info, we’re there to work it with them.

 

It’s not just to drop a piece of tech and leave, it’s a partnership in a relationship where we’re providing services. We’re not doing work product, we’re not attorneys, we’re not gonna actually do a review, but we’re gonna be in lock step with your reviewers all the way to empower them to be able to do this correctly and quickly, and that’s very, very powerful because most of these small firms are probably saying, “Well, I’m gonna have to grow to 20 or 30 or 50 people before I think about hiring people that are dedicated to lit support,” we’re like, “You don’t have to get that big, we can come in and give it to you on an incremental cost base as to where you get a ton of value, not having to break the bank, and you can enjoy the benefits of having that big department, without having to actually build it.”

 

Patrick:

It seems like a great asset for law firms who are smaller, maybe don’t wanna grow the 100-person firm or something like that, and this provides a really great option for them to be able to pick and choose certain elements of the business that they can outsource.

 

They don’t have to manage it personally. It’s a really compelling financial argument as far as how to maintain profitability or improve profitability by taking away hours that they were doing manually to review documents or punting it off on someone else, but another angle that I think is important to mention here is that this sounds like it can make attorneys get better results by the accuracy component of having a system do it versus a person relying on whoever you could find at that time, at that rate to be going through all the documents.

 

But now, this is kind of another way that law firms can make more money, charge more for cases because they have insights, they have tools in their tool belt that are better than the opposing counsel, which ultimately comes down topwho’s the best DUI guy in town, who’s the best PI guy in town. Right, so I think that’s really a cool part of this as well…

 

Codex Ten:

Yeah, I think the… I was gonna say, I think the financial model, what’s interesting in legal is that it applies in two different directions, ’cause if you’ve effectively got two different kinds of it, so let’s look at… If you got the defense side and you’ve got the plaintiff side, right, and it’s valuable both directions in the plaintiff side or in the defense side, that’s usually hourly billing. There’s not really contingency…sometimes. But it’s not really contingency work, it’s like they work for a company, they’re gonna try their case and they’re gonna track their hours and they’re gonna send a bill…

 

Well, in that scenario, there’s a lot of value there, like we talk about accuracy, and so if you’re gonna win more, ’cause if you’re one of Coke’s attorneys and you’re winning less than somebody else, they’re gonna move their business. If you’re charging more because it takes you 10 hours to do something a modernized and optimized form can do for 20 hours, Coke will eventually go, Well, why? We’re doing the same kind of stuff, and these guys are six times as expensive. That will hurt your business on the plaintiff side, that’s actually really… right, ’cause those guys, right, they only make money if they win, they’re operating in a contingency environment.

 

So if you think about what we’re doing, where if we can just… And there’s more to it, but just in its most basic thing, if we can reduce the amount of hours necessary to not only complete a case, but to even evaluate whether or not a case is worth taking, ’cause most of these firms… You have to do some discovery. They’ll do case election discovery.

 

I went through a Med Mal situation personally, a few years ago, and the firm I went to spent, I don’t know how many hours on my case, just figuring out if they wanted to have me as a client, and then they’ve gotta go and then do the work to try to win or settle, or do what they gotta do, so on the plaintiff side, it’s target by hitting the bottom line, if early case assessment and then deciding you wanna take it and then you gotta go win it or get a settlement in order to make a dollar because you’re making 40% of whatever you get out of that thing, if all of the hours you have to put in in advance of that settlement, you can take from 500 hours to 50 hours or 100 hours, the settlement, the settlement, that case is gonna be a million dollars, 100000, and you’re gonna make 40 grand or 400 grand or whatever.

 

If you’re gonna make the same amount of money, whether you spend 500 hours or 100 hours and you can do it at 100, your cost, your rate, your relative rate…It’s way better, right?

 

So for the plaintiff’s side, it feels like it’s a huge slam dunk, because every hour they save on the front is just… Their margin just goes up, up, up, up, up. You get to a situation where it’s like, Well, crap, man. Again, if I do this in 10 hours at 400 grand, right? I just basically made 4000 an hour instead of doing it for a 1000 hours and making 400 an hour, and that’s a much… Real math, right?

 

Patrick:

Real math.

 

Codex Ten:

The other side of that, that is an unfortunate reality is that people, when they’re getting into these discovery situations, they get just buried in documents, you’ll talk about a tactic in a case is to bury the opposition and paperwork.

 

Well, that other side, whoever has to go through and do that document review, typically it’s gonna be some junior level associates or paralegals, and they are gonna do what’s called a best effort review, so you’re hoping that they’re gonna get to some quantity of review that will catch as much of the responsive or privileged data as exists, and then they’re gonna send it off and they’re gonna hope that no one on the opposite side sees something they shouldn’t see, and then say something about it so they can enact some kind of a claw back or that they’re going to find the smoking gun, as it were, but even above and beyond that, just think about for a second, the quality of life, and so the turnover internally, when you’ve got people who are skilled at what they do, that’s material, you wanna hold on to you right, you wanna hold on to all those human resource assets, and if you’ve got someone chewing over, like I said, 6000 pages worth of record to have to manually redact things is…

 

To have to go through and find that needle in a haystack. That’s gonna exhaust that person, how often are they gonna have to go through and do that before the offer from the law firm across the street starts looking real attractive, because regardless of whether or not they’re gonna look at the same exact stuff or have the same kind of workflows. It’s over there. And the grass is always greener on the other side.

 

So when you’re employing workflows like we do, and when you’re employing tools like we have, your likelihood of holding on to valuable staff is so much better, so you’re gonna have that much better quality of life for your staff, you’re gonna hold on to talent, so much more… And more than that, you don’t have to hire a ton more people to handle additional workload or to handle the existing workload you have in a more achievable timeframe.

 

What is happening so often in the industry right now is law firms are seeing consolidation happen, not only internally, but also for their clients, their clients, especially who are businesses and are looking for specialists, are trying to shrink the pool of vendors that you strength the number of attorneys they use, and if you can handle a case and show your client on a score card or whatever, we handle your cases faster, we settle them for less, or we get you better results in your things, well, then you’re gonna get a bigger piece of the overall market, and that’s a good thing for everyone involved.

 

Codex Ten:

Well, and also around, and this is more for the math, the growing firm or the mid-firm who is attracting talent, this is all… I mean, I remember too now, this is the kind of stuff where law schools around the country are starting to have these tools in the teaching environment right now, and I’ve had this conversation with people who say that they’re putting in discovery just because they’re trying to hire good attorneys.

 

And people coming out of law school and they’ll come in and go, What do you use… And they go, We don’t use anything. We put you in, if you’re gonna be doing this work, early level associate type work, you’re doing it manually, and they’re like…

 

Codex Ten:

Well, here’s a legal pad and a pen!

 

Codex Ten:

I just came out of law school, where I have access to all these incredible tools… Right, like this is where like LexisNexis and Westlaw really went with their strategy, they got into law schools and research went from legal libraries to online and firms that didn’t do that, somebody gotta say, Wait a second, you want me to go just in her and look for books, and then this other firms over here is more modern and I can have a T-platform?

 

So if you’re trying to hire young attorneys, this can help, but also the other thing I was gonna say that I think really along these lines that is also impactful is just the idea that outside of the retention of employees and how they’re sort of plying their trade, is that even in a small shop where maybe they don’t have staff that’s doing this stuff for them, maybe the guy that or gal that’s trying the case is doing this work because there are only four people in our scenario, it’s like you can still spend the same amount of time, but, let’s reallocate your time to more valuable work.

 

Codex Ten:

Right, so if let’s say that if really… You do need to have 100 hours in the case… Well, right now you’re doing 70 hours of review and then you’re spending 30 hours working on the high value stuff, case strategy, all that, it’s like, let’s shift that the other direction, let’s make it… So you only gotta spend 20 hours and review, and then you can spend 80 hours doing this stuff that you’ve gone to school for a million years for and spent all these years learning how to do well, which is Be a lawyer, which is to actually work your case.

 

So even in that scenario with a small shop they have, they might not be passing this off to some paralegal, it may be them… Right, so it’s like wouldn’t they rather just spend minimum time on that, so they can then spend more time doing the high-end, like legal mental work, then the front side breakdown work, that’s a lot more…

 

Again, like in the example, if you’re a general contractor, wouldn’t you rather spend all your time building the house and less time like chopping down trees, right? Like right now, it’s flipped the other direction, you’re spending all this time cutting down trees and you have to rush to build the house, let’s make the tree cutting process way easier, and then you can spend the same amount of time if you want, but just spend it on higher value stuff, which is actually constructing the building…

 

Patrick:

You guys make really, I think, great arguments for folks to embrace this type of technology, at least get curious about it, right, you have the savings on labor costs, you have the quality of job improvements, you also have the better results factor as well, which can lead to more profit in itself.

 

What do you guys…And this is my final question. I really enjoyed our discussion, I appreciate your time. So what advice do you have for law firms who are reluctant to these tools or think they’re too small of a firm or just reluctant to change things, change their way they’re doing it, and the opportunity cost of dedicating some time to this to get it started once, but then have that ability or have that benefit, that long-term benefit?

 

Codex Ten:

In short, you don’t have a choice, you really don’t, there’s… Especially with COVID, we’ve watched the American Bar start getting very aggressive about how it is implementing it sanctions and where it is starting to apply to the penalties behind people not operating correctly, and how Discovery should be held now, anyone who wants to say that “I’m too small I don’t have your discovery…” If you’re reading a document on your computer, you have e-discovery, unless someone goes out and brings you a bankers box full of documents that never entered a computer, you have your discovery.

 

Those sanctions are gonna get really uncomfortable in high-tech and the HIPAA Act have been out for a long time, both of those have some pretty serious teeth, we’re talking about anything from $100000 all the way up to $2 million per violation. That will bankrupt a law firm you cannot afford to ignore this stuff, you just can’t… And that’s on the stick side of things.

 

On a carrot side of things, you’re gonna get such a competitive advantage above everyone else, who again, no one has a choice, we all have to do this, this is just the way the future works, but you’re gonna get such a competitive advantage over your competition, over the big guys who’ve been hoarding all of this technology and these abilities for now more than a decade, that it just makes good business sense to get into this, and then finally, it’s gonna be more fun to practice law… Who in the world went to law school to go… I know I’d like to read through a bunch of emails for 15 hours and find one piece of information, no, they wanna go in there to practice law, to try cases, to do things that are impactful to their clients, not to do someone else’s homework.

 

Codex Ten:

Yeah, and I’ll give you one about the resistance to do… I mean, here’s the thing, and I get this is tied around the unknowns ’cause we’re actually doing this a little different, this is a developing space where even this conceptually, it has been available to small to mid-size firms, but more than the carrot and stick thing.

 

I think that the way that we’re structured, and it wouldn’t have to be… So I would say that if you’re a firm — and it wouldn’t have to be us — you need to be looking at this no matter what provider you’re looking at, if you’re not doing this currently, you need to talk to somebody, we’d love to talk to you, but talk to someone, but…

 

We can come in and do a case, that’s a thing, it doesn’t have to be this, and that’s what’s very different from the way our platform is set up and our services are set up, so like document management, which is a huge… Now, that’s almost ubiquitous in legal, it used to not be. I manage in Netdocs and Worlddocs and these platforms that just did document management for their IP, their internal docs, that used to be a luxury product. Now, everybody’s got them, you almost can’t do your work without it, right.

 

But in order to do that, you gotta put the whole farm in… You gotta move everything over. It’s a massive undertaking.

 

We could literally come in and say, in one practice area, in one case and go, give us one case, the cost is gonna be incremental, it’s not like there’s this order of Get in price of 50 grand. It’s like, No, you could actually feel you tested… We’ll actually come in… And there’s two ways we can do that. Three ways really.

 

We could come in and you say, I get it. Let’s do a net new case, I got a new one starting next week, let’s get set up, let’s get everything together, let’s run through some training, let’s put the discovery in and start from scratch. We do that. The other thing is, is we can come in mid-case where they’re in the middle of something and say, I’ve gotta do something right now, I run a big redaction or break down a big PDF or do something. We can take a copy of the data and show you in that scenario what we can do versus how you’re doing it manually, and that’s always like turn it on a flash light, ’cause generally we do that.

 

And they’re like, Holy crap, I just spent 50 hours doing that, and you did two hours. Right, that’s not an exaggeration. We had that happen, not to the long ago, where a guy just did something and said, Well, you guys try to do this, and we ran the whole thing through and we produce the bits of information he wanted in about two hours, and he had spent 40-50 hours working on it manually.

 

Or we can do… And we try not to do as many of these, which is just a raw test case, which is we take something that’s not active and put it in and just run it outside the framework of normal, and so we’re not gonna probably do that in full flesh mode that’s gonna be a little more… What’s the word? Theoretical where we’re not gonna actually get deep, but what’s enough to where we can take some data and show you, and we’ve got demo data, we can just show people as well if they don’t really wanna, but you can come in on one case and just give it up, and if you wanna expand in the firm, that’s just as easy, we just aren’t running more cases.

 

So I think the big thing is, is there’s very little barrier to entry from a price standpoint, really, or a time standpoint, because we can come in very small and we believe in what we do, so we’re not trying to grab people up and say it’s still on firm, I know if someone runs a case, they’re gonna start doing every case, we haven’t… We’ve never seen the… We have yet to have a single customer start using us and then use us less, it just doesn’t happen because there’s so much value in it, so it’s like If you’re worried about pricing cost, it’s like, just do… Let’s just do one very low risk financial aid time, all that, and then we can show you the value, it’s not like it takes you…

 

And then this is not your industry, right? In the SEO and that sort of… That’s a longer tail that requires a pretty long commitment, just Go do that in two weeks, you sort of see a result, it’s an important commitment people should make… Right, but it takes longer, but it lags a little longer to see resolved.

 

We led up a case, we can start producing results like tomorrow, I literally tell us what you’re doing, let us give us a minute to get the data in and get some things set up on our side, and we can actually show you value right now, and that’s not typical of most businesses, most of the time it takes it takes a while to start to actually realize some value from investment.

 

Our tail on realizing value is very short, and then if they don’t see value, then they’re out some nominal amount of money and they’ve moved on to… We’ve never had that happen. We’ve never had somebody do it and go, I don’t really see, Wow, this is helpful.

 

And the thing we actually haven’t talked about at all, and it’s a huge differentiator between what we do and what the rest of the market does, ’cause you can get out there and find guys who will do consultative e-discovery stuff, we’re pioneers and what’s called law firm informatics, we’re basically taking all of the data that a law firm has and other case information, all their billing information pursuant to the cases that they try with us, and we’re giving them back information about that, how efficient are you?

 

Who is your best reviewer, who’s your most profitable client, you may have a client who you think is really profitable, ’cause I really know is… And in reality, they’re costing you money, because every case that you try with them, you lose money on how many cases are you writing off administrative tasks that now you aren’t anymore… In fact, we even got a calculator on our website for anyone who wants to go through and check to see how much of an impact you can have for this kind of a tool. And we’ll give you a report back right there based on just the information you provide us, Hey, here’s how much of impact of this kind of a tool, our kind of services can have on you, so really, really interesting.

 

Patrick:

Very cutting-edge stuff. For anyone who doesn’t believe that this is the next wave of how law is gonna be practiced, just wait five years and you’re either not gonna be in business or your competitors are gonna be attributing three or four times.

 

Alright, yeah, I’m all for anything that helps improve the efficiency and operational set up for law firms, because in my experience, we’re dealing with a lot of solo, a lot of small firms, people wearing a lot of different hats the same way I do, and anything that can provide even an incremental improvement on the amount of tedious not fun work and can make you more profit, it’s a slam dunk, so I’m really excited in which you guys the best with the product, it sounds like in here, and things are moving quickly, so congrats on getting this up and running. And really appreciate your time today. Yeah, I appreciate that.

 

Codex Ten:

And same to you. It’s really fun and we’re… I think we’re entrepreneurs, but also sort of that consultants in nature and the real… Much like again, in your business, when you start to see those value results, it’s very gratifying, I mean, it’s very gratifying the work we do because we see the impact and it’s not this gaseous cloud that’s hard to… It’s like, right, boom, we’ve got here it is, this is what you… This is what you committed to do, and this is what you got out of it, and that…

 

There’s not a lot of businesses where you get to do that where you can literally point at it and go, I can show you exactly how you drove value right here, so it’s really fun for us and we really enjoy it.

 

Patrick:

That is it for this week, I wanna thank Shawn and Clayton for graciously giving us their time and sharing some really cool information, so I hope you got a lot out of it and…

 

Stay tuned for more episodes. Thanks again.

Patrick Carver

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