LexRatio interviewed Ignaz Fuesgen (Co-Managing Director) and Ines Polak (Legal Transformation Specialist) from smartvokat. smartvokat is an independent legal engineering and technology firm headquartered in Hilden/Duesseldorf. Its focus lies on leveraging opportunities emerging from digital transformation for the benefit of a meaningful, human-need-centered legal and compliance service delivery experience. Their team comprises of legal professionals, management consultants, project managers, UX designers, and technologists. They serve corporate legal and compliance departments as well as Alternative Legal Service Providers (ALSPs). The firm uniquely combines multi-disciplinary skills to efficiently assist clients with their digital transformation journey.
LexRatio: Let’s start with some basic questions. Why did you decide to enter LegalTech industry, what is your company vision and what kind of LegalTech problem does your product trying to solve?
Ignaz Fuesgen (smartvokat): It’s a couple of questions, so let me start with the first one. smartvokat’s founding idea was to bring together the worlds of technology and law. The idea was to find a common language between three developers and two lawyers to conjointly work on digital process design and implementation. This is where the name “smartvokat” originates from. We usually make fun of it and say that the smart people are the techies and the advocates are all the others – playing it to the usually prejudice that lawyers don’t know how to use technology … which is a prejudice we prove every single day. Joking aside, we have found a pretty good balance between the various skillsets – very exciting! At the core of what we do is creating a common language reflected in service portfolios and processes that both legal professionals, as well as solution architects, developers and other IT team members, understand. Our aspiration is to streamline and optimize the user journey in terms of interactions between legal experts (e.g. in-house counsels) on one hand and those who need legal advice (internal and external business users) on the other hand through processes and technology enablement. Our slogan is “driving digital transformation in the legal and compliance sector.”
The internal client is at the center of all activities. What clients perceive matters, it is all about their experience with the service provided by the Legal and Compliance team. Law firms have been preaching client-centricity for decades but nowadays, the concept should apply to both, external counsel (law firms) and also n-house counsel and their internal clients. A uniform (one-stop) digital environment is so important in that regard. If, for example, an in-house counsel is forced to open six, seven or even eight applications when trying to solve legal questions this is surely not a pleasant experience. If we want to establish an efficient digital environment and ecosystem, we need to follow a client-centered approach, where each party will receive the information when and where they need it and in the most comfortable way. No one enjoys this hide-and-seek or ping-pong game between the in-house counsel and internal business users.
LexRatio: At this place we need to ask, how does the communication between tech people on one side and lawyers as domain experts work in practice?
Ignaz Fuesgen (smartvokat): We’re more than just a legal tech company. We offer end-to-end advice from the conceptual planning and design of legal and compliance services and to the actual implementation. In essence, we have three portfolios.
The first one is legal transformation advisory, one of the team members from that area is Ines Polak who is a Legal Transformation Specialist at smartvokat. She is one of those members who are responsible for operating at the intersection of legal and compliance requirements processes on one hand and technology enablement on the other. To give you an example of what we do: quite often clients come to us and ask us to review their current processes and digitally transform the legal department. Our response: what do you mean by digital transformation? Too often, this intent is based on reading about it somewhere and they just want to buy a software tool (e.g. a contract lifecycle management solution). What we do is to take their hand and offer them: “hey we pick you up where you are at on your journey and if you really don’t know yourself, that is your service proposition and strategy, there’s no sense in actually going into the digital transformation space right away”. So quite often, we actually start looking at the basics of how the legal department is structured, the legal service portfolio is composed and then actually taking the client slowly through the portfolio strategy to the process strategy, identify the processes that make the most sense in terms of actually digitizing them and only then actually looking at enabling digital tools that actually offer benefit. At this stage, we can also help with the design and project management of third-party technology beyond our own two tech portfolios.
Our second pillar and first tech portfolio is our own workflows platform called “smartvokat Workflows” which is targeted at small and medium sized enterprises that may have either no or just a very small legal or compliance in-house team at all. It is our own IP whilst our third tech portfolio comprises implementation services for ServiceNow, leveraging their Legal Service Delivery and Integrated Risk Management modules, as well as their toolkit App Engine Studio. The target segment for ServiceNow is clearly the largest global 2,000 companies.
LexRatio: Which of these sections is your strongest pillar of business? From our experience implementing the right LegalTech solution can be quite challenging, especially from the perspective of a legal expert who is usually a layperson in the field of technology.
Ignaz Fuesgen (smartvokat): smartvokat can help in most cases for one simple reason: we are flexible across our end-to-end advisory stack. We can either assist in terms of any requirements in guiding our clients through the entire process of digital transformation (e.g. contract lifecycle management) or implement a solution based on previously mapped requirements. We can interrogate the way some of the legal requirements are embedded in processes but at the same time we are able to dive as deep as actually creating an IT architecture and look at what’s available in the IT vendor space. For example, we have just completed a Request for Information (RFI) for a global pharma company by assessing the current tech tools which are available and suitable to the company globally. We fathered the requirements, blended them with our own expertise and compiled a list of more than 300 data points which we felt are necessary to assess and distinguish any potential vendors, all based on our business understanding.
When it comes down to our team members, we have high expectations and cherry-pick personalities who fit into our multi-disciplinary team that will cover whatever is required. We only work in legal and compliance as our niche. We might look small but we are competitive vis-à-vis much bigger consultancies. In the previous three projects we’ve won, we always beat companies that have thousands of consultants. The reason was that we are personal in our approach and a little bit more “progressive” in such a way that we’re constantly trying to learn and be at the forefront of latest thinking. We encourage our individual team members to be active members in all major think tanks in Europe and elsewhere, participate and listen, and see what’s happening in the legal and compliance market. And when you talk about research, we don’t have that as a specific discipline. However, it’s built in into our DNA to be curious and roam around and learn, and, therefore, we are very specialized and hopefully able to help our clients.
LexRatio: You mentioned you also help with selecting the right LegalTech product. How do you get meaningful and valuable information about different service providers and their products? Do you test their products on your own before advising, or what is your approach here?
Ignaz Fuesgen (smartvokat): In terms of our last client, we conducted some research on your own. We don’t claim to know all the available LegalTech products but because we’re constantly involved in various think tanks, we just gather experience and insights. In addition, we have a huge network that we can tap into if we require any insights from the field, first of all. Secondly, we read analyst reports, and thirdly, we’ve experienced some of the products ourselves in our previous life and during our usual implementation projects.
What we’ve done for this specific client we’ve first actually made sure we fully understand where they are at in terms of business requirements. Only then, we assisted them through a structured process and prepared also use cases for demos. In terms of contract lifecycle management (CLM) we have globally probably eight vendors left that scale enough and cope with all requirements. If you’re more in the smaller space, then you have more choices but then again it comes down to decisive aspects like support in your local language, 24/7 support – also in Europe – because most vendors are US.
LexRatio: At which stage do you jump in with assistance? Is that from an early beginning when for example legal department or a lawyer decides for the optimization of work, or when they start implementing the solution on their own?
Ignaz Fuesgen (smartvokat): As mentioned, we are the ones for the early days of “I got an idea” but we can even come in at the moment where an organization has already decided about the technology, and they want to actually understand how to use it. For example, the client might have already taken certain decisions but the question is now how to convert that into a meaningful process and infrastructure. We see ourselves as companions on the transformation journey and we’ll pick up clients wherever they’re on this journey. They may be at the beginning, but they may also be close at the end – it depends. That’s our strength and that’s our philosophy because just covering one section of the journey makes one blind.
LexRatio: You also mentioned that you’re developing your own products. What kind of products are these in terms of supporting the legal industry?
Ignaz Fuesgen (smartvokat): It’s a “Software as a Service” (SaaS) solution. The product is basically a manifestation of what we’ve seen in terms of core processes required in legal and compliance departments addressed by a unique workflows platform that is affordable, effective, and intuitive. It strives to meet the requirements without overloading it like any software you would get for larger companies. We try to make it very simple without neglecting any requirements. For example, we are currently developing a whistleblowing module for the new EU legislation. Another one is a contract generator which helps business users generate their own contracts based on templates.
LexRatio: Comparing where you were to where are you right now, how did your first product or first business idea look like? Did you change it a lot during the past time or are you basically still working on it in its original form?
Ignaz Fuesgen (smartvokat): Life is a learning journey. We are learning every single day and we’ve also many times taken a step back and looked at where we’re at and also changed the technology accordingly. The first idea was to create a tool that would handle any data privacy flows, an app. And almost at the same time we also developed software for due diligence for middle-sized and small companies. It turned out those two did miss something relevant: a general platform where you could just “plug in and play” modules, similar to the Lego principle.
LexRatio: Would you say that you already found your Product Market Fit?
Ignaz Fuesgen (smartvokat): Yes, we believe we did. We have, at this very moment, a situation where people are enquiring about our software without being triggered by any proactive marketing. It’s basically all about word of mouth. People come to us and request demos, so there must be something that’s actually appealing to them, and, more importantly, they come right from the segments we identified as the target market. We also try to focus on topics that are relevant at a particular moment. In other words, the legal issues with which companies are dealing at this very moment are those that will sooner or later end up on our platform. The second most important aspect is rather opportunistic demand driven by a particular movement in the legal space. At the beginning of the year, I would have told you that whistleblowing is the number one process this year on our platform. But now since the promulgation of the law had been delayed, our focus shifted to a few other business cases.
LexRatio: And how do you select or decide which area for example are you going to cover? Is your target market only Germany or a broader CEO market? So, for example, if someone from Slovenia would like to use your software, is this also possible?
Ignaz Fuesgen (smartvokat): Okay let’s start with the second question. Now, the software is available in German and English language. So, if someone from Slovenia wants to use its functionally this is not a problem at all from a technical point of view. With our solution, we’re not providing legal advice. What we do provide is a solution that supports legal service delivery – for example a contract generator where the content for the templates would come either from a law firm that is advising internal or external stakeholders or the legal and compliance department itself. And that can practically be done for any jurisdiction. If you would like to have software in Slovenian language it will require translation from English or German but that’s not really a challenge anymore as we have translation tables for a structured approach, As you have mentioned we’re in a phase of actually setting up a properly structured sales approach and we will do this through partner company, value-adding resellers, distributors or legal managed services providers, for each EU country.
LexRatio: We would also like to hear more about your team. Please tell us what your definition of success is. What are some of your long-term and short-term goals?
Ignaz Fuesgen (smartvokat): Our major objective is to create a sustainable business by establishing an environment where we will be able to deliver professional services and products on the highest quality level possible but also combine that with fun, enjoyment, and innovation. It is more like an expression of what we feel, this is why we do something differently. We previously worked for large law firms, legal departments, and agencies. We’ve seen the things that we want but many things we don’t want. Hence, we created a space that’s basically reflective of the things we would like to see and see more. Therefore, we put a strong emphasis on individual team members and the team as a whole through a positive team culture. This means we need to work differently. We are also remote by definition. At the beginning, there were only a couple of people on the team, all male and of predominantly German background. Now, we almost achieved gender equality and diverse European, Middle Eastern and African cultural backgrounds. We cherish the fact that we have a diverse team in terms of cultural, social, and religious backgrounds. With that being said we are creating a workspace that hopefully makes our team members love to come to work every single morning.
LexRatio: What approach do you take – this is also a question for Ines Polak – to motivate your team and everyone to bring their 100 percent to the table?
Ines Polak (smartvokat): I’ve been here for three months, and I do love to come to (remote) work every single day! In terms of motivation, I think the most important thing is to have backup and to know that you are part of the team, in particular, to know that you are not alone, especially from the very beginning. This is why it is important to get enough information and support, so you do not feel like you’re alone. At smartvokat, you never feel like you’re alone. For me for example, I don’t have any problems with raising questions to Ignaz or to other team members. I always feel supported and when I get that support, I feel more confident when performing my job. With such good support, I don’t have a problem going to a client meeting alone because I know I can do it.
LexRatio: Ines, how did you find smartvokat company?
Ines Polak (smartvokat): I found the company on LinkedIn. To be honest some credit also goes to LexRatio because I found you first and I got interested in LegalTech. I never particularly liked legal theory (even though I think it is important). I am more interested in legal practices and how to make them more efficient. We never did have a particular subject on LegalTech in the university. That is why students are more or less alone when trying to get information and knowledge about LegalTech, which is why I started researching LegalTech companies and if I am even qualified to work in one. This is how I found smartvokat. Honestly, I was researching what can I do with my law degree that is not so traditional what I believe not most people do since a lot of my colleagues from university went the more or less standard way (advocacy, judiciary, etc.).
LexRatio: Ignaz, do you also have a legal background?
Ignaz Fuesgen (smartvokat): No, I don’t. I stumbled into the legal profession. I sold a management consulting project to Clifford Chance once and I never got away from the legal industry anymore.
Ines is referring to a very important aspect here. I think that’s sort of thinking beyond boundaries and creating a degree of professional curiosity. The world we live in is a multilateral, interdisciplinary world so there are a lot of touch points with other disciplines. This is what we look for in our candidates – unique personalities and people who have done a little bit more than just following a certain pre-determined path. In that context, some U.S colleagues talk about T-shaped lawyers. A T-shaped lawyer does not mean that a lawyer needs to turn into a bookkeeping, engineering, or coding specialist but he/she understands the general concepts of other work-related areas and how they relate to legal service delivery.
LexRatio: Ines, which were those skills and knowledge you received during your studies at university that help you the most with your current work and which skills would you wish to have more, or do you want to develop more?
Ines Polak (smartvokat): To be honest, I think everything I learned about the law I could pretty much forget. I am not trying to say that the received knowledge is not important. However, at smartvokat I need more engineering skills in terms of how to process a lot of information and put it into bullet points. This is one of the most important skills I got in university – how to extract relevant information. But to understand the relevant information it is good to have some legal knowledge. Working here is looking at legal information from another perspective. Another thing I learned during my studies that helps me today is understanding how lawyers think, especially when communicating with clients which are also lawyers. In particular, I need to be able to deliver a clear message and present technology in a way that lawyers can understand it. That is why it’s good for a LegalTech company to employ lawyers who are able to understand the company’s clients who are also lawyers.
LexRatio: What about knowing basic programming skills or software development?
Ines Polak (smartvokat): So far, I didn’t need any. I believe it’s more important to understand what we’re trying to achieve with this technology, and how to use it because we are also performing some internal testing of the things we sell and we help buy. I don’t feel like I must learn to code.
LexRatio: You mentioned that the team is working fully remotely. I am curious, how do you assure effective communication and let’s say an overview of the activities of team members?
Ignaz Fuesgen (smartvokat): There are two words for this. One is trust and the second one is continuous reflection, that is, are we doing the right thing. Our team’s DNA remote work since we have been working that way from our early beginnings. We also trust our individual team members to deliver the best they got. We also try to be as flexible as possible so if there are any private obligations of team members (e.g., going to the doctor) they can do this. No one at smartvokat is checking whether members are working regular working hours because we know they all work hard! Remote work is not only about trust but also communication. We occasionally run at risk of having too many meetings. Currently, we’re looking at all meeting formats, the is, the nature and the objective of each format, to make sure we have no overlaps or redundancies. Finally, our degree of flexibility requires an environment where your entire tools are all sitting in the cloud so there’s not one single piece of software that’s actually sitting on our laptops.
LexRatio: Thank you both for these valuable insights and I am sure we will again meet soon.