This week, we talk with Elena Tsalanidis and Justin Hansky, co-founders of Deeligence, a revolutionary due diligence workflow tool. Hailing from Australia, this dynamic duo delves into the challenges of traditional due diligence processes and how their AI-powered platform aims to streamline and optimize legal workflows for greater efficiency and accuracy.
Elena Tsalanidis and Justin Hansky share their personal journeys that led to the creation of Deeligence. From Elena’s background in human rights litigation and her experience working at Buckingham Palace, to Justin’s tenure as an M&A lawyer, their combined expertise and insights have laid the foundation for an innovative solution in legal tech. Their unique approach to addressing inefficiencies in due diligence is rooted in their deep understanding of both the practice and business of law.
The hosts and guests explore the skepticism surrounding generative AI in the legal field, including transparency and the accuracy of outputs. Elena and Justin emphasize that Deeligence prioritizes clarity and user trust by integrating human oversight into the process. They outline how their platform simplifies document review, reduces the need for exhaustive scoping, and enables legal professionals to identify key contract provisions quickly and confidently.
Implementing new technologies in law firms often encounters resistance due to entrenched practices and security concerns. The Deeligence team discusses their strategies for encouraging adoption, from ensuring ease of use to providing verifiable results. They also highlight the importance of fostering internal champions who recognize the value of modern tools in enhancing legal service delivery and client satisfaction.
Deeligence challenges the traditional billable hour model by enhancing the efficiency of tasks like due diligence. The platform allows firms to offer fixed-fee models without compromising the quality of their work, enabling them to surface critical issues across all documents instead of relying on selective reviews. This shift promotes more comprehensive client outcomes and cost predictability, marking a significant transformation in how legal services are delivered.
Looking ahead, Elena and Justin discuss their aspirations for Deeligence, including expanding into international markets like the US and UK. They express their commitment to staying at the forefront of legal tech innovation, continually improving their platform to meet evolving industry needs. Their insights underscore a broader trend of specialized, user-focused AI solutions redefining the legal landscape.
Listeners are invited to connect with Elena and Justin to learn more about Deeligenceand its impact on legal workflows. This episode provides a compelling look into how technology and a fresh perspective can address long-standing challenges in the legal profession.
Listen on mobile platforms: Apple Podcasts | Spotify | YouTube
Twitter: @gebauerm, or @glambert
Email: geekinreviewpodcast@gmail.com
Music: Jerry David DeCicca
TRANSCRIPT
Marlene Gebauer (00:07)
Welcome to the Geek in Review, the podcast focused on innovative and creative ideas in the legal industry. I’m Marlene Gabauer.
Greg Lambert (00:14)
and I’m Greg Lambert.
Marlene Gebauer (00:16)
So Greg, today we have two new guests from Down Under. Elena Saladitas and Justin Hansky, co-founders of Deeligence a due diligence workflow tool. I met, Elena through, one of our other Aussie guests, Amber O’Meara from Minter Ellison. And I have to say, I am, I am so happy I did. She’s, she’s a lawyer. She’s a new mom. She’s a startup founder and you know, not surprisingly her superpower is hustle. So Elena, welcome to the Geek in Review.
Elena Tsalanidis (00:20)
great sense.
Thanks so much for having us.
Greg Lambert (00:48)
And joining Elena is also the co-founder of Deeligence and I think also Husband as well, is that right? So we’ve had like two love and legal techs in a row here. So Justin Hansky is joining us as well. Justin, welcome to The Geek in Review.
Justin Hansky (01:00)
That’s right.
Marlene Gebauer (01:04)
We’re in a row, it’s like, not intentionally, so that’s pretty cool.
Justin Hansky (01:13)
Thank you, happy to be here.
Greg Lambert (01:15)
All right, before we jump in, I wanted to talk a little bit about something I saw this afternoon, and it was prompted by a post on LinkedIn from one of our other Love and Legal Tech guests, which is Nikki Shaver. And we’re talking about kind of the, well, she was using Harvey as the example that there was a lot of…
Negativity and the industry about it because of some of their business models some I think people are thinking they’re a little too secretive and she was kind of like wondering, know, what what’s going on why there’s Why there’s this kind of you know Bitterness I guess in a way toward them and it was funny because yesterday yesterday Marlene I sent you a text because I had read something I’m like man. There is a lot of
Marlene Gebauer (02:05)
Suspicion, yeah.
Greg Lambert (02:12)
negativity and gotcha kind of feeling going around the industry at the moment. So I thought we’d ask Justin and Elena to join us in on the conversation here. So I had thought that almost since the Stanford report came out, there seems to be like the lid has come off, the seal has been broken on.
pointing out things that are wrong, especially in the GEN-AI legal products, which I’m all for, but I also like to see that there’s a of a healthy conversation that’s going on. so Marlene, I guess to start with you, are you feeling kind of the same thing here or is it just me?
Marlene Gebauer (03:02)
No, I think, I think you’re right. I mean, I think there were two, reports this week about like professors that were working with, the Lexis tool and, know, we’re, unhappy with the results and, you know, made that, that sort of very public, you know, in addition to, Nikki’s, you know, post about, about Harvey. And, I think it kind of stems from.
It stems from people not knowing, like sort of this lack of transparency, like they want to understand why these things work the way they do and not getting the answers that they want. And I also think the sort of expectation, the expectations might not be quite aligned with sort of where the tools are, that they’re sort of expecting things to be more.
leaning towards perfection than perhaps they are. And I mean, know at least in one of those articles, Lexis responded that the actual capability wasn’t even available for the work that was being done.
Greg Lambert (04:14)
Now know, Elena, before we jumped on, you had a good counter to this. So do you want to talk about it?
Elena Tsalanidis (04:22)
Yeah.
I mean, as we were talking about it before, I was thinking about how lawyers are engaged because they need to deliver as perfect as possible legal advice. And so as a reforming perfectionist myself, I can really understand the need to know how effective a tool is before wanting to use it as part of, you know, your legal work arsenal. But I think if we look at these tools as in some instances still being very much
an experimentation phase versus giving legal advice. A tool like ours does give legal advice, but of course there’s a human in the loop. But for a more generic tool, they are a space for lawyers to try and learn and grow, not necessarily to be perfect right out of the box.
Greg Lambert (05:14)
Justin, what’s your thoughts on this?
Justin Hansky (05:17)
Yeah. And I think, you know, the tools we’re talking about like Lexis AI and Harvey are relatively general purpose AI tools and to really get the most out of those.
I mean, the same way you would with, know, ChachiPT or Claude, you really need to know how to prompt well. And something I’ve noticed with a lot of these gotcha cases is the prompts have been incredibly simple, often contain like legal concepts that don’t have the same meaning in ordinary language. And so to me, it’s not surprising that you’re getting poor results by putting those sorts of things in. And so I sort of…
shrug my shoulders a little bit. They are probabilistic tools and they should always be checked by lawyers. There’s definitely lot of room for improvement but I think that will come over time.
Greg Lambert (06:02)
Yeah, there’s one other thing and I think probably Marlene has a different stance on this than I do. And that is the you know, there’s this expectation of transparency, which if you’re a member of a nonprofit association, maybe you expect a transparency from the, you know, the Board of Governors of that. But these are commercial products. And it feels like there’s this expectation of
Marlene Gebauer (06:08)
you
Greg Lambert (06:31)
Well, I should be able to understand everything that goes in and comes out in your entire process and how you’ve come up with this. And quite frankly, think even OpenAI doesn’t realize or understand how exactly their product comes back with the answers. So I think there’s an expectation of transparency that may not be even possible.
even if they wanted to, but in the same time, you’re also, this is commercial outfits, not something that you’re building in-house or you’re working with. So are my expectations on transparency too limited?
Marlene Gebauer (07:12)
I’m going to let our guests, mean, who actually have a product, like I want to hear what they have to say about that.
Justin Hansky (07:22)
Yeah, so I think we can give lawyers…
Part of what we do is AI powered contract review where we summarize key provisions and concepts that exist within a contract so that a lawyer can then review them. And because of the way we’ve built our system specifically for this one task, we’re able to surface for the lawyer the sources that were used in order to create that summary. So they can very easily sort of go back and reference them and check them. What…
can’t do is in that very final stage when you send a prompt across to one of these foundational models, tell you why it came back with the exact words that it does. Like that’s fundamentally unknowable today. And I suspect that’s probably where that transparency piece is coming in. And there’s teams of people in lots of different companies at these huge organizations who are trying to back solve for understanding why these models do what they do. And I think we will get there, but it’s still very early days to give people that public sector
around transparency.
Greg Lambert (08:26)
Well, and I’m not letting the vendors off the hook because they’ve, and I think I wrote about this back in June, they’ve also set expectations, I think, maybe too high. They also have been very creative in their marketing and in trying to explain away some of the things that it can and can’t do and being a little tricky on the wording. So I’m not saying there’s no fault.
I’m just saying there’s a lot of room for a conversation and I think people shouldn’t be afraid to have that conversation but also to, you know, in order to have a conversation it has to be two ways. So we’ll see how things adjust on that. So have we beat that subject to death, Marlene? You wanna get into something a little more fun? Well, cool,
Marlene Gebauer (09:18)
Yeah, I think we stop now.
Elena Tsalanidis (09:18)
Thanks
Marlene Gebauer (09:23)
Like the guys on Hard Fork, it’s like, stop.
Greg Lambert (09:25)
Stop, yeah, stop generating. So, Elena, before we actually jump in to the product itself, I was doing a little due diligence myself and I watched a video that you, interview that you did, and the thing that stood out to me was you talked about that.
Elena Tsalanidis (09:27)
Such a good thing, Tom.
Thank
Greg Lambert (09:45)
you kind of worked your way into Buckingham Palace and worked for the private secretary to the Queen and even got to see the Corgis go by. So before we talk business, we have to know what it was like to work in Buckingham Palace.
Elena Tsalanidis (10:04)
sure, Greg. It was truly a once in a lifetime experience. I feel so fortunate. I had wanted to get some non-legal work experience in my penultimate year of university, law school, and I was out for lunch talking to someone about how I wanted to get a role in London maybe for a couple of months over my university holidays. And my conversation was overheard by a woman who said, my daughter works in London.
to the Royal Family and if you know me you know that my superpower is hustle. I think I would firmly put myself in the category of what Stephen Bartlett calls a world bender so you can’t say no to me. I am very very determined so I ended up getting in touch with her daughter. Her daughter was not accepting any interns. I managed to convince her that it would be mutually beneficial and I’d be able to help out in the lead up to the Diamond Jubilee. I’m thinking that the offices would just be based in London.
and when it was all confirmed I was sent a security and information pack and had to do a police check and a map showing where I would enter the palace gates to attend work and I looked I think I said to my parents I think I’m working in the palace so it was amazing I got to go to events with the Queen I worked with the press office I attended a Shakespeare event at the palace with Eddie Redmayne and Helena Bonham Carter
factors that I really love as well as also just seeing the importance of service. The Queen I didn’t realize is incredibly or was incredibly hard working. Her days were planned with military precision and the amount of work she would do to give back to the community and recognize folks in the community is something that I developed quite a fond appreciation of. So it was wonderful.
Greg Lambert (12:01)
sounds sounds wonderful so
Elena Tsalanidis (12:01)
And did you know she used to, maybe fun fact, she used to always have afternoon tea at 3.30 every day. So every day in her calendar, was afternoon tea. And in the mornings, she would read updates from the realms, from the Commonwealth. And on one of the days I prepared her entire red box that you see on the crown, that box of documents to brief her so that she knows what’s happening wherever she goes and she can have intelligent conversations with world leaders.
Marlene Gebauer (12:08)
you
Greg Lambert (12:28)
Well, that does sound like a once-in-a-lifetime experience. Everything’s downhill from there, huh?
Marlene Gebauer (12:32)
I know. And it’s like my connections on six degrees of separation have gone up exponentially now. So thank you. Thank you. excuse me.
Elena Tsalanidis (12:32)
They’re really fun. Yeah, I mean, it’s hard to talk, yeah, one thing for the other.
Greg Lambert (12:42)
Yeah.
Marlene Gebauer (12:51)
So we’ll shift gears a little bit, Elena. You your journey from human rights litigation to co-founding Deeligence is really intriguing. What inspired you to make this shift and how have your legal experiences influenced the development of Deeligence to AI-driven due diligence platform?
Elena Tsalanidis (13:11)
Yeah, so…
I think that I’ve always been very obsessed with ensuring processes and operations are as harmonious as possible. And so I was always wanting to a law degree and become a lawyer, but I can see this line through my career about optimization and building expert processes. that’s all me practice as a lawyer briefly, always trying to improve the way work was done, know, building precedent banks and things to assist.
team to make sure that that task was always quicker, simpler and easier for the person doing it after me. And I found that while I loved the law and was incredibly intellectually stimulated by the very clever people that I worked with, I was more interested in how people could do their work better. And so that caused me to jump onto the side of startups and I worked for company in the UK that helped in-house teams.
optimised the way that they reviewed contracts and absolutely fell in love with the space. I think what’s so inspiring is
working with the smartest of smart folks with our customers and helping them have a new fresh lens on the way they do a process and improving it. So that was really the nexus of my love of legal tech and how tech can empower folks. And then Justin and I put our heads together, I think coming up to two years now on this specific problem. And that’s what I’ve been working on ever since.
Greg Lambert (14:43)
So, Justin, let’s bring you into the conversation here. Since you didn’t work for the Queen, I guess we can just talk about diligence. So, I know that the product diligence aims to streamline traditional tedious processes of due diligence. And I was talking with one of my attorneys today and due diligence is one of the things, even when you’re billing on the hourly scale, it drives you crazy.
Marlene Gebauer (14:49)
Hahaha.
Greg Lambert (15:11)
Nobody wants to do it, no one likes the process. So do you mind talking and elaborating a little bit on some of the inefficiencies that your platform looks to address and both how it enhances the process but also the accuracy and the efficiency for the legal professionals using it?
Justin Hansky (15:36)
Yeah, so I think it probably helps a little bit to talk about my background here too, because I was an &A lawyer for four and a half years at a firm out here in Australia called Armour Block Leibler. So I did more than my fair share of due diligence during that time. And I have to agree with the lawyer you’re speaking with today, it was definitely the most miserable thing I used to do in my in my day to day.
I used to sit on both sides, as a more junior lawyer reviewing just huge quantities of documents end to end. And you’d sit there at one in the morning at your desk and you’d think, wonder why we’re not doing this in a different way. And then also from…
as I became more senior, the team management side, because what you have in due diligence is you have a group of people from different practice groups within the firm who come together for a single project. They don’t work together very often. There’s often 10 or 12 or more of them. And then they work together intensely for three weeks and then they all disappear never to work together again. And so you have, in addition to the reviewing of the documents, you also have a coordination problem. And so that was something that I always struggled with.
way I used to project manage my teams was out of an Excel spreadsheet that you’d get out of the data room, which is called an index, which is basically a list of everything that’s in there. And the problem with that is that’s completely static. So it’s completely up to date on day one, but people add new documents, things move around and all of a sudden that’s completely out of date. And I’m sitting there with a ruler trying to compare the two spreadsheets I’ve got in front of me to work out what’s new, what’s changed, what do I need to do next?
And it sort of then had my eyes opened after I moved to the UK. did an MBA over there and then went into legal tech at Brighter. So I led our law firm custom success team there, essentially building the way we run, you know.
We run things with customers who’ve bought our software. And so part of my job was sitting down every day with lawyers from all different teams and saying, well, what’s the worst thing in your practice? How do we automate it? How do we improve those processes? And so there I started to get this process lens, which I think you’re starting to hear something a little bit familiar. And now having heard the same thing from Elena and realized this is something that could be done better. Cause I’d sit down with &A lawyers as well and they’d say due diligence is still terrible. No one’s fixed it properly with technology.
technology, can we build something using brighter to do this? And my answer was parts of it. But the thing with no code platforms like brighter is they’re really good at sort of low and medium complexity use cases. Once things get really complex, it doesn’t really make sense for any individual firm to build something themselves. And so that’s the point at which we sort of said, okay,
we’re seeing enough demand in here in the market. There’s so much pain out there. Let’s build a solution that solves this specific problem super well with a dedicated workflow platform. Give people the monday.com, the Asana, that law firms don’t have when they’re stuck in Word, Excel and Outlook. And then also give them AI powered contract review to really sort of speed it up for everyone else.
Greg Lambert (18:47)
So who came up with the idea to tackle diligence?
Justin Hansky (18:54)
It’s so.
Elena Tsalanidis (18:55)
I think Justin had encountered the problem and what we did was we did hundreds of customer interviews to validate if this existed across different levels of seniority in a DD process and then we kind of built the solution together. So Justin had lived and breathed it. I’d done DD too but not as much as Justin, unfortunately for me.
Marlene Gebauer (19:15)
You
So I want to shift into sort of processes. Integrating AI into legal processes can be met with resistance, both because it’s a different process than what people are used to. They’re uncertain of how to use the tool. There might be security issues. So how has has Diligence approached this challenge of
encouraging law firms to adopt these types of AI driven solutions and what sort of strategies have proven effective over time.
Elena Tsalanidis (19:52)
Yeah, lawyers fundamentally don’t care whether…
the solution you’re providing them with is AI or workflow. They want to know what it is doing for them. They are busy people. And so for us, a really key concept that we’re rather obsessive about is ensuring that using diligence is just dead easy. So they don’t have to think about what they’re doing. We just deliver time savings from the get-go. And so what we’ve done is to ensure that this experience is as seamless as possible.
taken a view on what good AI powered contract review looks like. And so for lawyers, the two most time consuming parts of reviewing a material contract is often finding the right thing and then summarizing it. And so we, with our secret sauce, are letting it know what a good summary looks like. What are the things that we want the lawyer to be seeing on screen? And we, and we present that to them so they can see where the lawyer has come, where the
AI has drawn that summary from so it’s essentially footnoted and they can move on with their day. So we’re delivering this work 75 % faster and I guess your point around adoption Marlene like that’s that’s tricky there’s no doubt about it.
We know that this happens incrementally. And so when an individual does something differently for the first time, we have to work with them hand in hand. And I guess what’s unique about us as founders is we’ve sat on both sides of the fence. We’ve done this in private practice. And then we’ve worked at different legal techs, implementing technology with lawyers. So we’ve really been at the cold face of tech adoption with lawyers for many years now. And so we understand viscerally their pain.
And I guess another thing we think about is the communications piece around all this. So racking up small wins, getting some success under the belt, building our coalition of supporters in a firm. I can tell people and make promises about how good diligence is, but they really need to see it and experience it on a live due diligence. And then once they do, we hear things like you’ve made my life a million times better. So that’s really rewarding.
Marlene Gebauer (22:14)
And I feel like sometimes it’s like a domino effect to like, mean, if you have the right person using it and has success and then just basically starts telling everybody else, then it starts to spread.
Elena Tsalanidis (22:27)
Totally, and I don’t blame lawyers for having the reputation of being change resistant. We know that they’ve got to billables. We know they’ve got targets. Their time is quite literally money.
Marlene Gebauer (22:38)
to be right.
Elena Tsalanidis (22:39)
really, you’ve got to be right and precise and all the things that make them wonderful at their job. But what I find that they sometimes are less strong at, because why would they, is sitting back, reviewing the process, thinking about how we can do this better for next time. They frankly don’t have the space and capacity and they’re not really rewarded for it. How do you build for building a better process or a better template that your team member can use next time and save time, effort, energy, and increase lawyer satisfaction? You often can’t.
Greg Lambert (22:39)
You
Elena Tsalanidis (23:09)
So that’s where folks like us come in, go deep on the problem. We have a way to solve this issue and then we work with these lawyers hand in hand.
Greg Lambert (23:19)
Yeah, I was gonna say, what’s the magic formula? Because they are, like you said, they’re not being paid to troubleshoot a process. So how do you ease that information out of them without really interrupting their day to day? Is there something that you find works well with lawyers?
Elena Tsalanidis (23:45)
find what works well is…
locating those folks that just get it. So there are some lawyers who you speak to, sometimes they’re their partners and they say, I know if my team does this more efficiently, they’re going to be happier. They can focus on other work. This work specifically in due diligence is often loss leading anyway. So they’re thinking to themselves, my team can be quicker, happier. They really get it. So finding those people are the ones that stand next to us and help us make that case in turn.
I find that that’s a really successful way of navigating a firm. There are going to be folks, sometimes partners, who just may never see the benefit or may not be as open. And so we try and find the ones that don’t fall into that bucket.
Greg Lambert (24:32)
That’s not as easy as you make it sound.
Elena Tsalanidis (24:34)
It’s probably the hardest part of the job to be frank. One part is building an amazing solution. There is a lot of moving pieces to build a tech product. And the other part is adoption because folks are busy and we get that. We’ve been in their shoes.
Marlene Gebauer (24:36)
A lot of patience. Yes.
Greg Lambert (24:50)
kudos for being able to read the room, because that is a valued skill, being able to identify who you need to be engaging with. Justin, let me turn to you, because we can’t talk AI without flipping it over and talk security. So when we talk about due diligence documents, the documents that you process through there, some of these can be…
highly secured, highly confidential proprietary documents. And when you talk about moving information through an AI powered platform, you’ve got surveys to fill out from all the security folks. So how have you gone about looking at the security concerns and addressing that so that you can maintain a
trust in the clients that are using the product.
Justin Hansky (25:47)
Yeah, so I mean, the way we think about it is sort of, there’s I guess two issues. There’s a security and trust issue and then there’s guess like a data sovereignty issue and I’ll sort of talk about the security and trust first. So.
In terms of the AI services that we use, we are only using those that are made available through either AWS or through Azure. And so these are large organizations who are built on this foundation of security and knowing that the data that goes in is not going anywhere else and being used. know, these, work with government and military and, you know, these are, these are the kinds of people who are engaging with. We don’t go direct to any of the vendors because they frankly don’t have that track record.
Our customers are comfortable with this. They’re used to working with these cloud.
system providers and so they know that if we’re using the same things that they’re using internally, they’re comfortable with that. So that’s been our approach from that side of things. And the second is on the data sovereignty side, everyone’s data is segregated. know, firm A’s data is never going to be used to improve the model for firm B. Everyone sort of retains their own data and their own, you know, it’s completely segregated and it’s
a slight limitation, but also because we’re based in Australia, we don’t necessarily get the latest and greatest models as soon as they’re produced by the big vendors in the way that you can have them in the US and that we can…
spin them up and use them in the US. And so sometimes there is a little bit of a delay in terms of getting that state of the art into the next iteration of our system. But that’s the reality is that people do not want their data going to the US or traversing the countries where they’re not comfortable with the privacy regulations. They want it staying on shore. And that’s the sort of data landscape we’re living in now.
Greg Lambert (27:46)
Crazy, the US doesn’t want their information outside the US. We like our information local.
Justin Hansky (27:50)
Yeah, you just want what you know, Yeah.
Marlene Gebauer (27:53)
Yeah, and I’m curious if you’ve sort of come across and this sort of goes back to adoption too. If you’ve come across that there are sort of security constraints within firms that make it a little more challenging to use tools like like diligence on, you know, on content that, you know, could be, you know, perceived as confidential.
And, you know, is, that had an impact at all, or have you seen any really unique solutions around that?
Justin Hansky (28:28)
Yeah, we haven’t really seen that so far. I think there’s generally quite a lot of confidence because we have to go through very intense information security processes in order to get used on a live deal. And the firms build up confidence in the way we’re doing things through that process.
The one thing that I’d say about Australia that’s a little unusual compared to say the US or the UK is where there are particularly sensitive documents in an &A context.
our customers may not always be able to download them at all. And if you can’t get documents, you can’t use AI on them. that’s sort of the approach we’re sometimes seeing from sellers in an &A context who want to keep it sort of especially locked down. They know they’ve got industry competitors, et cetera, who are going to be in the bidding process. But I would say that’s an outlier globally. It’s just culturally, for some reason, it’s developed that way in this market.
Marlene Gebauer (29:27)
So, Elena, you touched on this a little bit before about sort of billing time and such. So I know by reducing time that lawyers spend on &A and due diligence, how do you envision diligence and tools like that influencing the traditional billable hour model?
And the overall dynamics of legal service delivery. And you should know that this is like a real topic of interest for us. You know, it’s in the billable hour. We like to focus on this quite a bit. you know, our sort of have a close eye on how AI is impacting that.
Elena Tsalanidis (30:16)
It’s a topic that we also love talking about. There’s some really interesting market forces at play when we think about the billable hour specifically in the legal due diligence context. So what we’re hearing from the firms that we’re working with and hundreds of conversations is it’s already dying in relation to due diligence. Most firms are
not able to just turn the clock on, you know, like 10 years ago and say this due diligence exercise is going to cost a million dollars. That used to be something that could happen. Clients are just getting a lot more savvy about how they procure legal advice. And so to ensure that fees are not reaching a certain figure and a clock isn’t turned on, many law firms are saying to clients, okay, we’ll do this with a soft cap or fees won’t exceed X amount. And what invariably happens is
the fees always exceed that amount. And so there’s a massive impetus in ensuring that if you’re telling a client your fees won’t be over $300,000 that they don’t go over because you don’t want to have an awkward conversation with the client. You probably want to win their legal work moving forward, right? So.
In this space, think technology is just going to hasten the demise of the billable hour. This scoping down of due diligence is the way that many partners are managing it. So they’ll say, okay, if you only want this to cost $300,000, we are only going to review 10 to 20 contracts. We’ll pick the ones that have the highest contract value or that seem like they’re the most important and everything else will deem not material and we’re not even going to look at it.
This approach is problematic because it ignores the fact that there’s potentially a $10 contract sitting in that pile that doesn’t make the cut, that has some really important terms or transferring away critical IP. And just because it’s low, low value, it doesn’t mean that it’s not a risk to the business. so AI and a tool like ours, we’re really changing the game because now instead of scoping down, you can say to a client, we can surface.
all issues across every document rather than that hope and pray approach. So it’s a real paradigm shift with the way the work’s happening but to answer your question in this space I think it’s inevitable that the billable hour is not going to be suitable adequate in the years to follow.
Greg Lambert (32:50)
So you’re saying hope and praying is not a legal strategy? I’m not sure I understand.
Elena Tsalanidis (32:54)
I think that’s right. I mean, with my operations hat on, think hope and praise not a good strategy. It’s like, be organized, think about the consequences. Where’s this going? Let’s do some research. So probably not my general approach in any event outside of the billable hour context.
Greg Lambert (33:09)
All right, well, let me talk a little bit more about your history and how it’s, I think, is shaping your development there at Diligence. that is, Elena, you have a background as a human rights litigation. You’re now in a legal tech startup that’s dealing with AI. So what do you…
How do you approach the ethics with your history and working in a startup industry? And is there a role that you think ethics plays in the way that legal innovation should be moving forward?
Elena Tsalanidis (33:52)
That’s a really interesting question. So what happens to lawyers as this tech gets better? What is the sort of roles that they will have? Does this industry contract? As technology improves, it will reduce the need for junior lawyers, which also reduces the number of people in the workforce. And that’s something that we really have to wrestle with. I would say that that’s a universal problem with AI. For now,
We’re not at the point where junior lawyers jobs is being thrown out. Their role is just adapting. And so, you know, I think the most common use case people are using some of these more generic AI tools is to make a file note, to take notes at a meeting. Junior lawyers, I mean, I remember doing that as a junior lawyer. There’s probably some value in that exercise, but maybe the fact that AI is taking that off the plate of a junior lawyer, their role needs to be thinking about that meeting more strategically, asking the
important questions. So I don’t think lawyers are being replaced. I think their role is adapting. And I guess with this march of progress, we spoke about how this is prevalent across many industries, but we know that, for example, like car manufacturing, that’s something that used to be done by hand, now more and more done by robots like it.
It’s just the way that things are unfolding. But I guess on a more positive note, I think there’s an ability to future proof your role as a lawyer. If you start to dive deep into these new tech tools and create huge amounts of value in the way you work. So you’ll be able to leverage what you do, do it more effectively and be at the cutting edge. So I would encourage folks to ensure that they’re becoming super literate in this space to enhance their own capabilities with AI.
Marlene Gebauer (35:41)
So I think we’re at the crystal ball question that we say to all of our guests. Looking ahead, what are your strategic goals for diligence and how do you plan to further innovate and expand the platform to meet evolving needs in the legal industry for the next couple years?
Justin Hansky (36:01)
Yes, I mean…
From our perspective, we’re already working with really great innovative firms, people like Landren Rogers, Horland Wilcox, other global firms. And for us, the next sort of stop is expanding internationally. We are with global ambitions from the start, as I think you have to as a legal tech. And so moving into those new markets and sort of taking on the US and the UK, where we have a lot of deep connections from having worked over there, is really a key goal for us over the next
12 months. And the area we’re working in is just right to disruption at the moment. So we’re just getting started. As the tech matures, as the cost of compute comes down, we’ll be able to do things with large document sets that are unthinkable today from a concept perspective and a cost perspective as well. And we’ll be leading that charge as the technology matures. I guess.
The great thing about a crystal ball question is it’s super easy to be wrong because predicting the future is basically impossible as we’ve learned. But I think we’re in sort of the first stage at the moment where the supremacy of that general purpose model that can sort of do everything is going to be eroded by individuals who do an amazing job for users in their specific niches.
Focus really matters and so companies like Diligence in our space, like those who specialize in e-discovery, I think will always win out over the we can do everything players. And I think there still will be a place for these general purpose LLM type tools. But I think what we’re going to see is a massive verticalization within law firms. I think that’s probably what I think is going to happen in the next 12 to 24 months.
Elena Tsalanidis (37:48)
Yeah, and so I think for folks, know, your audience listening will be in the US next year. And so we’d love folks to reach out, have a chat to us, understand their problems even more deeply. And so you can do that either on LinkedIn or team at diligence.com. So D E E L I G E N C E or where diligence.com. So that’d be the space to get in contact.
Greg Lambert (38:13)
Excellent. Now I don’t have to ask you how to reach out to you. Yeah, that’s it. Tell your own story on this. your own future. Elena Salinitas. I’ve got it written out here. So let me… We even practice.
Marlene Gebauer (38:15)
Beat you to it, see?
That’s right.
Justin Hansky (38:25)
something.
Marlene Gebauer (38:32)
We are, we’re just so bad.
Elena Tsalanidis (38:35)
Thank you.
Marlene Gebauer (38:37)
We even practiced. It’s like, this is awful.
Elena Tsalanidis (38:38)
I’m just dominated.
Justin Hansky (38:40)
we get practiced.
Greg Lambert (38:43)
So Alina Salinitas and Justin Hansky, thank you for taking the time. And I know the time difference and it’s actually tomorrow there in Australia. So my kids were asking me for you to tell me what the basketball scores are and I said, it doesn’t really work that way. So thank you both for coming in and talking with us today. This has been great.
Justin Hansky (39:04)
I can.
Elena Tsalanidis (39:08)
Thanks so much, what a pleasure.
Justin Hansky (39:10)
Thanks, Beth.
Marlene Gebauer (39:12)
And of course, thanks to all of you, our listeners, for taking the time to listen to the Geek in Review podcast. If you enjoyed the show, share it with a colleague. We’d love to hear from you, so reach out to us on LinkedIn.
Greg Lambert (39:23)
All right, and you guys gave us the information, but we’ll make sure that we put that on the show notes on how to reach out and learn more about diligence.
Marlene Gebauer (39:31)
And as always, the music you hear is from Jerry David DeCicca Thank you, Jerry.
Greg Lambert (39:36)
Thanks, Jerry. All right, talk to you later, Marlene. Bye.
Marlene Gebauer (39:38)
Okay, bye.