LegalTech Trainwrecks #3 (ACN Check)

Over the past two years, I’ve prototyped and discarded about a dozen potential legaltech products. It’s never nice when this happens, but I’ve come to believe that the process of prototyping, testing and failure is a necessary part of the journey to discover not only what the market wants but also the right problem and product for me to work on.

It’s in the numbers

Many legaltech start-ups are born out of problems the founders (or someone close to them) had when they were lawyers. The typical story involves being stuck in the office at 3 am, doing tedious or mundane tasks, and thinking, ‘There must be a better way’.

This makes sense. It ensures you’re solving an actual problem for starters, which happens less often than you would expect.

So when a junior lawyer told me how they were given 20 minutes to check a huge list of ACNs* across multiple documents, how ridiculously stressful that was, and that surely, ‘There must be a better way’, I was immediately interested. 

The answer seemed obvious too – a spell checker for ACNs/ABNs. A simple solution to a clear problem.

It was surely a home run.

The prototype

I built a working prototype within a few days. Users could go to my website and paste in a company name and ACN/ABN, for example “XYZ Limited (ACN 452 342 220)”. The website would then automatically conduct a check against the official government register of companies, and tell you if there was any discrepancy. It was rudimentary, but sufficient for initial testing. 

If user feedback was positive, I intended to build the product into Word and have it automatically scan your document and even autocomplete ACNs/ABNs. There was also the possibility of expanding into other government registers like land titles etc.

So, what was the feedback?

The good news was the product worked, and it was certainly useful if you needed to check ACNs/ABNs. The big question though was how much better was it compared to manually going to the official government website, searching for the relevant company, and using your eyeballs to check whether the ACNs/ABNs matched?

It turns out that while people do check ACNs/ABNs often, they usually only need to check one or two at a time. In those cases, my prototype did provide some time saving, but it was minimal. Weighed against needing to learn a new tool (even a simple one), trusting that it’s accurate, needing to pay for it etc, people are rightfully content with the status quo.

But even if we accept that checking huge lists of ACNs/ABNs might not be a daily task, it still occurs reasonably often, particularly in the larger law firms that tend to work on matters involving large corporate groups. After all, that exact scenario was the genesis of this idea. 

Or was it?

With the benefit of user feedback, I slowly realised that the junior lawyer hadn’t been saying that it was hard for them to check a vast list of ACNs/ABNs. Rather, they had said that it was hard for them to check a huge list of ACNs/ABNs in 20 minutes. That situation is much rarer.

‘Ok,’ I thought. ‘But even if a user is not under catastrophic time pressure, the product still saves time, particularly where there are lots of ACNs/ABNs to check. That’s still something worth pursuing, right?’

Wrong.

People weren’t attracted to the time-saving benefit. For starters, most law firm lawyers won’t be super keen when you try to reduce billable hours. In addition, the time saved was modest at best – a couple of hours per month for a junior at the very most, noting that as they became more familiar with the task, they also became quite fast at it – and, interestingly, senior lawyers told me they actually liked giving this task to inexperienced colleagues, as it was a good way for them to learn important skills like how to use the online registers, how to navigate a legal document, and the importance of attention to detail. 

There would be no home run for me. This was a strikeout.

Lessons learned

When I was first told about this problem, it immediately resonated. A tedious task having to be done under immense time pressure. Being forced to choose between sacrificing accuracy for timeliness or timeliness for accuracy. Most lawyers have been there before. 

Where I got it wrong however was by focusing too much on the task aspect (i.e. checking ACNs/ABNs) and too little on the time pressure aspect. It was an understandable misstep. Framing the problem around the task aspect made it seem easier, and therefore more attractive, to solve. But it was the wrong problem to solve. The real problem was never about checking ACNs/ABNs. It was about managing time and workflows so that people aren’t put in these sorts of unreasonable positions in the first place – in other words, better project management. 

When I found my prototype didn’t resonate (because it was solving the wrong problem), the natural reaction was to try and salvage the situation by seeing what other problems my prototype could solve (i.e. maybe it could help save time). This was unsuccessful. And indeed, trying to pivot an existing solution into a new problem always needs to be treated with a high degree of caution, as it’s essentially putting the solution before the problem.

You might be wondering then, did I go on to try and tackle that more fundamental issue of project management?

Yes, I did. But that’s a story for another time. If you’re interested in learning how that went or other legaltech trainwrecks, please follow me on LinkedIn.

Follow the link and enjoy reading the LegalTech Trainwrecks #1 (No Confetti) article too.

*In Australia, it’s a requirement and good practice to include the government-issued 9-digit ‘Australian Company Number’ (ACN) or 11-digit ‘Australian Business Number’ (ABN) immediately after the relevant company name in certain types of documents, which translates to basically all documents a law firm might prepare (contracts, court filings etc). Unsurprisingly, junior staff are usually given the task of checking ACNs/ABNs against the government register to ensure they’re correct. This is tolerable if you’re just checking one or two. It’s horrible if you have a corporate group with 100 subsidiaries.

 
Daniel Yim writes and teaches on legal technology and transformation. He is the founder of technology start-ups Sideline and Bumpd, and previously worked worked at Gilbert + Tobin and Axiom.