Why One Entrepreneur Chose Legaltech
When Inc and Forbes list today’s hottest industries, they’re more likely to talk about drones and artificial intelligence than legal innovation. Not only are robots easier to picture, but they’re infinitely sexier than a better litigation experience. This lack of mainstream attention hasn’t dissuaded those who see the opportunities in the legal space. In the past, this has primarily been lawyers and technologists. However, that’s changing too. Increasingly, entrepreneurs from outside legal are bringing their experience and insight to the industry’s challenges.
Today, we interview one of them: Alfredo Chang, co-founder of expert witness company Witnex. He has 22 years of experience in the financial industry – and a passion for helping lawyers leverage technology to improve their practice.
Ana: Witnex launched this summer. What made you take the leap?
Alfredo: Witnex is the genesis of a conversation I had last fall with Lisa DiDario, my business partner. We were discussing how in her last 20 years as a legal consultant, oftentimes, she was asked by law firms to put together lists of expert witnesses. I listened to her passion for the work, and at same time, realized how manual the process seemed to be. As we discussed the business and how law firms operated, we realized there was an opportunity to introduce a technology-based solution that can improve the way lawyers find and work with qualified expert witnesses not done today.
Ana: How did you get into entrepreneurship? What was your first entrepreneurial venture?
Alfredo: I would say entrepreneurship has always been in my blood. My parents owned businesses as I grew up, so I always had that drive to have my own business. After that, I stayed on the corporate track through most of my career until recently. I recognized that to do something on your own becomes so much more rewarding. And to be able to do it with a great team and an old friend makes it priceless.
Ana: How did you and your co-founder meet?
Alfredo: Funny story: Lisa and I went to middle school together…over 30 years ago! It’s great to find a partner with whom you have great chemistry. We think alike in many ways, but balance each other very well in other ways.
Ana: What counterintuitive lessons have you learned from running a startup?
Alfredo: I think the most counterintuitive lesson would be around hiring. When looking at resumes, “years” of experience does not always translate to skill – not like in traditional businesses like finance, where you often look for experience to bring investment discipline and track record. Developers and engineers come in all sorts of packages, but some of the brightest talent we have found are in some of the younger guys who are hungry and often bring stronger development skills.
Ana: What is one failure you had as an entrepreneur, and how did you overcome it?
Alfredo: One failure I’ve had as an entrepreneur is perhaps being overly optimistic – drinking my own Kool-Aid, so to speak – which leads to overly-optimistic projections. The only way to really overcome this is to become more grounded in the approach, to continue to self-assess, and to have stronger metrics and dashboards. Increasing operational visibility allows you to get a faster perspective on performance and on the status of projections. From that, you learn to become more grounded and more cautious on the numbers. But the flip side of being more cautious is having the right infrastructure, so there are no bottleneck issues as the company grows.
Ana: Your background is more in finance than in law. What attracted you to legal?
Alfredo: There are two primary reasons why I have taken a liking to the legal industry.
First, I’ve always been interested in the legal industry. Being in finance, you look at lots of legal documents. Fintech has always been an area where technology is accepted, from analysis and trading to operations and settlements. Efficiency is key, and better decision-making tools enable that. The legal industry seems to be the polar opposite in many ways. I have generally found that law firms remain antiquated in many of their processes – in some cases, still using pencil and paper. In addition, many lawyers tend to be animals of habit, using the same people, process, and experts. These factors create market opportunities to introduce improvements to workflow, leading to higher productivity and efficiency, which results in an improved bottom line for the firms. That presents a great opportunity to be part of its transformation and perhaps help lead as a change agent for the industry.
Second, after much thought, I have come to realize that the legal industry, and specifically litigation, tends to be less sensitive to economic cycles. Therefore, the proposition to become part of the legal industry was an easy decision. This is a great thing from a business perspective. Not having to worry necessarily about the broader macroeconomic backdrop, we can focus on building a great tool for trial lawyers. We know that technology is here to stay, and tools will get faster, better, and in many cases, more affordable. At the same time, trial lawyers will always need experts. The older generation of lawyers may have many experts on their list dropping off from retirement. The younger ones are looking for their own ways of finding an edge, including experts.
Witnex is at the intersection of these incredibly exciting dynamics, which is what makes me thrilled to be part of the legal industry.
Ana: What is your vision for Witnex?
Alfredo: We aim to be the leading resource for attorneys to go to find and work with expert witnesses, throughout the life of their litigation.
Ana: What sets your company apart?
Alfredo: Witnex is very different in that we do not charge experts any listing fees, nor we do add a margin over experts’ hourly charges. That way, we become the most agnostic, efficient way to find and work with an expert.
Consider this: a 24-year old just out of nursing school can pay $1000 and list themselves as a long-term care nursing expert. Who has to check their credentials? The lawyer. Or, there are “consulting” or expert search firms out there. They may not charge the lawyer to “search” for an expert; instead, they may add a 25-50% markup on the expert’s hourly fees. This becomes a very expensive proposition pretty quickly. Not to mention the potential bias from the search company to recommend workhorses that they favor, rather than the right expert for the case.
Another great differentiator is that through our platform, we can integrate with an attorney’s litigation strategy and stratify the teams of experts they want to assemble and use pre-suit and deposition.
Ana: What are the 2 most common mistakes law firms make with expert witnesses?
Alfredo: The first mistake is relying on the same expert over and over again. Many lawyers become complacent and use the same experts for all cases. This becomes a problem over the long run when opposing counsel asks about relationships to the lawyer and lifetime earnings with the lawyer. This does not even address the fact that the opposing counsel quickly understands the case strategy from the law firm.
The second mistake is related to economics. Many smaller firms sometimes try to find experts by searching the web and asking for referrals from peers through listservs. While we support the lawyers and want them to be comfortable with their experts, we wonder whether they realize the extra effort it takes to qualify these experts. First, they have to search and gather a list. Next, they have to interview them to evaluate whether they fit the needs of the case. Lastly, they need to review qualifications, compare fee schedules, and make a determination. This process can be rather time-consuming, taking away from productivity.
You can find Alfredo @ac06870 on Twitter.