Ex-City solicitor who founded lawtech start-up when he was just one-year qualified sells it for £7 million

The law student dream

A former City lawyer who got the idea for a lawtech proofreading business while reviewing a 1,000-page document at his Simmons & Simmons desk at 1am now has his sights set on every lawyer’s biggest bugbear: time recording.

Oxford graduate Stephen Scanlan’s first year post-qualification led him to wonder why a number of the tasks he was given couldn’t be automated. Many would have turned a blind eye but instead he founded XRef, a business which was formally incorporated in 2010.

Scanlan found sales help in the form of Travis Leon, an old pal of his from law school who had then gone on to work at Linklaters. He joined XRef as a business co-founder. The growth of Scanlan’s “lawyer-driven project” was slow, but with the pair’s hard work tens of thousands of users were gathered in just four years. Even Simmons & Simmons is now a customer, Scanlan recalling this funny anecdote:

“One of my old trainees, who had sat with me for six months and heard all about XRef in that time, went to Watson Farley Williams’ office in Greece and she called me to say she’d just had an XRef training session there. I still have old friends at Simmons who message me saying: ‘your project saved my bacon last night!’”

Scanlan moved his lawyering skills over to Akin Gump in 2013. Billing thousands of hours at a US firm and running an expanding business soon became “unsustainable”. He tells Legal Cheek: “I was working evenings, weekends, holidays. Even my honeymoon was compromised.” When approached by a private equity company, K1 Investment Project, he was made an offer he couldn’t refuse (quite literally — Scanlan’s wife said she’d divorce him if he did). His XRef company was recently sold for $10 million (£7.35 million).

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It must surely be tempting to bank the money and live off the interest. But Scanlan, after paying off the mortgage, used it instead as a business investment, as he thinks there’s so much more for him to do in the lawtech world. He says:

“XRef was a great project for proofreading documents, but time recording really goes to the heart of how law firms make money. And it’s painful, meaning technology in this space is potentially really valuable and really desirable.”

Scanlan’s lawtech senses clearly have clout: he’s made millions from XRef and his new project is now at advanced stages with “a major corporate partner” and a magic circle firm. So, how does he think our law student readers should approach the emerging world of technology and the law?

In short, use it to your benefit, not your disadvantage. While you can still be a very successful lawyer without being very technologically-minded, this is less true now than was the case five years ago, he tells us, before continuing:

“The market is changing now. In 2016/17, there was a notable step up in gears; major firms like Freshfields now have innovation departments, which is something that would have been unthinkable when I started XRef. But law students shouldn’t be scared of this development: technology can help with the primary skills of a lawyer, such as drafting, but it can’t replace them.”

 

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Fonte: https://www.legalcheek.com/2018/01/ex-city-solicitor-who-founded-lawtech-start-up-when-he-was-just-one-year-qualified-sells-it-for-7-million/

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